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Walled Gardens Flourish As Data Privacy Efforts Take Root

By Ryan Brady | August 27, 2021 | 0 Comments

MarketingDigital Marketing Strategy and ExecutionMarketing Technology and Emerging Trends

Marketers can’t rely on user-level identifiers like they used to. Sparked by global privacy legislation (e.g., GDPR, CCPA) and consumers’ growing demand for greater ownership over their digital identities, device makers, web browsers and ad tech giants are making efforts to advance data privacy for internet users. While these advancements empower users, they adversely affect digital advertising efforts. 

In particular, three major developments are upending digital marketing teams’ ability to track and target users across websites, channels and devices:

  • Third-party cookies crumble. Google Chrome—the world’s most popular web browser—plans to phase out the use of third-party cookies in late 2023, following in the footsteps of Safari and Firefox. 
  • Apple restricts the use of device identifiers. As part of its iOS 14.5 update, Apple’s AppTrackingTransparency framework requires third-party app developers to prompt Apple device users to opt in or out of all app-specific targeting or tracking. 
  • First-party cookies have a shorter shelf-life. Apple’s 2.3 update to its Intelligent Tracking Prevention automatically deletes first-party cookies from a user’s Safari web browser after 24 hours. This curtails efforts by some ad tech platforms that rely on first-party cookies as cross-site trackers on Safari in lieu of third-party cookies.

In response to these data privacy disruptions, marketers are placing more of their advertising dollars within “walled gardens” — giant, consumer-facing digital platforms such as Google, Facebook and Amazon. Top brands in Gartner’s Digital IQ: Advertising Benchmarks for 2021 have significantly increased investments in walled garden publishers both to prepare for the changes and test performance on these growing channels.

Together, Google, Facebook and Amazon constitute nearly two-thirds of total U.S. digital ad revenue.

This graphic reveals the nature of walled gardens: customer data that resides within these walls stays there.

In Exchange For Reliability, Marketers Relinquish Control

Walled gardens attract marketers due to their abundance of owned and constantly updated first-party data. Marketers can use proprietary advertising tools found on these platforms to deliver and measure targeted, brand-safe ads to users with reduced risk of privacy compliance violations or other customer data blunders.

However, in exchange for greater safety and reliability, marketers relinquish transparency and control. Brands are completely dependent on how these closed ecosystems measure and interpret advertising performance, making it difficult to understand and compare campaigns outside their walls. While marketers can leverage these platforms’ advanced targeting features to run highly-sophisticated ad campaigns, they can only get an aggregated view of campaign performance as walled gardens preserve the integrity of their users’ privacy. In short: data that resides within these walls stays there.

How are marketers adapting their advertising efforts within the walls of Google, Amazon and Facebook? Our upcoming research report, titled, “Brands Retreat Behind Walled Gardens As Data Privacy Efforts Take Root” will explore the themes and tactics top brands are using to advertise on these platforms. It will also explore how brands are exercising media mix agility and exploring lesser-utilized platforms, such as Amazon-owned Twitch. 

Gartner clients can also read Gartner’s Google to Drop All the Cookies, but Hold the Cards and Apple Upsets the Digital Advertising Cart to maintain a pulse on ongoing data privacy disruptions and learn how to adapt their digital advertising efforts accordingly.

The Gartner Blog Network provides an opportunity for Gartner analysts to test ideas and move research forward. Because the content posted by Gartner analysts on this site does not undergo our standard editorial review, all comments or opinions expressed hereunder are those of the individual contributors and do not represent the views of Gartner, Inc. or its management.

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