How First-Party Data Is Shaping Our Walled Garden Future

A dark path leading to the gate of a bright walled garden.

With third-party cookies on the way out, marketers are being told one thing – focus on building customer relationships and collecting first-party data.

Indeed, first-party data provides a way for advertisers to reach their intended audience in a way that is privacy-compliant and still effective.

But given the challenges of collecting and successfully implementing first-party data, many marketers are still turning to walled gardens – namely Google and Facebook – as an easy way to launch and measure campaigns.

It is for this reason there is a belief that walled gardens will ‘get higher’, particularly next year when third-party cookies are officially deprecated.

Such an approach could ultimately see both Google and Facebook increase their market share, which currently sits at around 73 per cent in Australia, according to the ACCC.

“There is a risk that the walled gardens will grow,” Verizon Media head of data ANZ Dan Richardson.

“The way that people have invested traditionally is that they have taken solace or ease in use of a walled garden, a Google or a Facebook.”

Adding to this is the fact 53 per cent of data decision-makers are not yet actually using their first-party data for their own advertising, according to the IAB.

This leaves the industry with a choice around the role walled gardens will play moving forward.

“It’s just a matter of whether you want to take a lean-in or lean-back approach [to walled gardens] as a publisher or brand,” Richardson said.

“If you take a lean-back approach you can use what’s available within those gardens, but there will be a more limited number of choices.

“If you’re leaning in, that means that means you’ll want to be looking at alternative identity solutions, such as industry IDs and contextual targeting.”

The Unified ID 2.0 has so far emerged as a leading industry ID, while the IAB is also looking at solutions through its Project REARC.

More walled gardens coming?

With so much emphasis being placed on first-party data, it was suggested recently by Aqilliz CEO Gowthaman Ragothaman that the “open web as we see it will gradually subsume into a bunch of walled gardens”.

Walled gardens are rich in first-party data by definition, meaning it is not unreasonable to assume that more could start to pop up in light of the end of third-party cookies.

But according to Richardson, businesses like Verizon Media – which have some of the hallmarks of a walled garden in the form of a DSP and SSP – are differentiating themselves from walled gardens with flexibility.

“If you’re not Google or Facebook, you need to be a little bit more flexible,” said Richardson.

“Whether you’re a publisher, or whether you’re a tech company, you’ll be growing your first-party data and really focusing on having that logged in user ID and developing contextual – but you’ll also be flexible.”

Richardson pointed out that Verizon Media’s Connect ID integrates with industry IDs to allow a level of interoperability not always found with walled gardens.

“I don’t think you’ll see a rise of other walled gardens, but I think we need to work hard to avoid increased fragmentation of media buying,” he said.

He suggested investing in identity solutions that can interoperate as a way to future-proof operations moving forward.

Cutting through the industry ID noise

With so many ‘cookieless’ ID solutions being made available at the moment, marketers seemingly face a tough decision in selecting the right one.

For Richardson, it’s all about choosing something that is scalable.

“You need to make sure there’s a scalable identity solution, which interoperates which is a common currency,” he said.

“I think there’s a less is more approach when it comes to industry-based IDs. You don’t want too many of the,, you want a few good ones that are quite scalable to give you the most addressable audience.”

Richardson also described Google’s recently announced Federated Learning of Cohorts (FLoCs) – which will help advertisers target audiences in groups based on shared interests – as “really scalable”.

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first party data FLoCs Verizon Media Walled gardens