Walled Gardens: Pros, Cons, Alternatives

The marketing ecosystem contains many avenues to reach potential consumers. Each platform has its own benefits, as well as its specific limitations and restrictions. For each product or service, a marketer or advertiser would want to choose the platform which can help them best reach their target consumers. Whether that’s within the confines of a walled garden, or on the open web, will ultimately be down to what the advertiser hopes to achieve.

What Are Walled Gardens?

A walled garden is a platform where the technology provider has full control over what gets displayed. The owner of the platform can prohibit specific advertisers or messaging from appearing in the space. They allow advertisers to reach that platform’s users in a way that might make their ad seem trusted, because the user might already be poking around there for entertainment and education.

Who Are the Main Examples of Walled Gardens?

Apple, Amazon, Facebook, Google, LinkedIn, and TikTok are all examples of walled gardens.

Walled Gardens: Pros/Cons

How Do Walled Gardens Impact Marketing Strategies?

Limited Targeting

Walled gardens like Meta, Google, and Amazon offer extremely rich first-party data, enabling advertisers to build highly personalized and precise campaigns, explains Colby Flood, founder of digital marketing agency Brighter Click. “Their algorithms can effectively match ads to user behavior, interests, and purchase intent, which is great for ad targeting,” he says.

That said, unless marketers capture user information (e.g., emails or phone numbers), retargeting across other platforms becomes fragmented and inefficient since, as Flood points out, targeting is limited to the data within the platform. This is where advertising on the open web opens up new opportunities.

Siloed Attribution

These platforms provide detailed performance measurement data within their walls, allowing for fast optimizations — but without the proper third party attribution tools, you may struggle to get a clear image of how you’re performing across platforms. “There has been a decline in third-party cookies and information over the years, and we don’t have the granularity of reporting today that we did in 2019,” says Flood. “Each platform claims credit for conversions, leading to inflated results — for example, Meta claiming 60 sales and Google claiming 50, when only 100 sales actually happened. This skews true blended performance and hinders accurate budget allocation.”

User Privacy and Data Sharing

Walled gardens restrict external access to user data. “This helps protect privacy by avoiding data leaks and misuse,” says Flood. “It benefits enterprise companies looking to keep sensitive customer data from being seen by employees and external vendors that do not need access.”

The downside is that, again, it makes it harder for advertisers to see the wider picture. “This closed nature also prevents advertisers from understanding performance across demographics, devices, or channels, limiting insight into holistic performance,” says Flood.

User Experience

User experience and engagement are improved within walled gardens, because ads feel more native and personalized. “From the media buyer’s perspective, once someone learns the platform, they can quickly navigate it,” says Flood.

That said, there is potential for channel bias and not seeing the full customer experience. “Marketers often gravitate toward the platforms they’re most comfortable with, which can lead to channel bias and a suboptimal customer experience when the full buyer journey isn’t considered,” says Flood. “There is also an issue with marketers not being familiar with the UI of the platform, limiting their ability to access the insights and data needed to perform their jobs.”

Why Are Digital Marketers Reevaluating Their Use of Walled Gardens?

For many marketers, walled gardens — think search and social, for example — are showing diminishing returns. “Marketers must structure campaigns around each platform’s unique setup, which fragments customer journeys and can cause businesses to decide between platform best practices and business needs,” says Flood. “For example, Meta targeting best practice is to consolidate audiences to help reduce CPMs (cost-per-milles), but a business with brick-and-mortar locations may need to run city or zip code-specific campaigns.”

Overconcentration of the budget on a single platform, such as Meta, is the primary cause of brands reevaluating budgets, Flood continues. For example: 65-70% of many direct-to-consumer (DTC) budgets go to Meta, as shown in the Northbeam screenshot below:

“These recurring platform issues with Meta cause uncertainty in forecasting, which is not ideal,” Flood adds.

What Strategies Can Brands Use to Succeed in Walled Gardens?

“Success requires a strong creative strategy,” insists Flood, including a marketing mix with a range of channels, which is essential to keep reaching consumers on different platforms and in different ways. “As media buying becomes automated, creative becomes the new targeting, signaling relevance to algorithms and customers alike.”

Brands should focus on continuous testing of ad creative, using platform-specific formats and messaging, and capturing first-party data (email/SMS) for retargeting, Flood adds.

While walled gardens can offer certain benefits, as with any strategy, it’s important to add more to your marketing mix, and including performance advertising on the open web as part of that mix should practically be a given.

Measuring Campaign Performance Inside Walled Gardens

Flood says that the most accurate way to measure performance is to look outside the platform. He recommends these tactics:

• Blended metrics like Marketing Efficiency Ratio (MER), which divides total revenue by marketing spend.
• Measuring cost-per-acquisition (CPA) and return on ad spend (ROAS) by the breakdowns showing new customers vs. existing customers, to ensure you are not overpaying for repeat purchases, while believing you are acquiring net new customers at a low cost.
• Third-party attribution tools like Triple Whale or Northbeam.
• Post-purchase surveys to map the actual customer journey.

“All of these provide a fuller picture of return on investment (ROI) and prevent over-crediting from in-platform dashboards,” says Flood.

What Alternatives Exist Outside of Walled Gardens?

Open Web

The open internet, or open web, refers to the rest of the internet landscape, such as websites and apps that are not subject to the limitations of walled gardens. Performance advertising platforms such as Realize, for example, offer access to a large network of premium publisher sites across the open web.

Programmatic Advertising

“Through demand-side platforms (DSPs) like The Trade Desk and StackAdapt, brands can place ads across thousands of websites and apps,” says Flood.

Retail Media Networks

With retail media networks, your customer is already looking around with the idea of buying, so it’s up to you to deliver the right message at the right time in the right way. “Walmart Connect, Target Roundel, and others allow advertising to high-intent shoppers using first-party retailer data,” says Flood.

Connected TV (CTV)

“Platforms like Hulu, Roku, and Tubi offer premium video inventory, great for brand awareness,” says Flood. The three main ways marketers can buy ads on CTV are via direct deals with a streaming service provider, through programmatic buying on automated platforms, or by partnering with companies that make CTV devices.

Owned Media

Sometimes the best marketing is still the content you create yourself. “Email, SMS, blogs, and branded apps give full control and long-term value,” says Flood.

Key Takeaways

Walled gardens can be beneficial to advertisers in a variety of ways, such as providing rich first-party data and detailed performance information. However, these details only exist as they relate to the activity within the specific platform. Walled gardens have both pros and cons, and ultimately, they should be part of a larger marketing mix.

Frequently asked questions (FAQs)

What are the latest trends in walled garden advertising?

The biggest trend is the shift toward creative-led performance. “Platforms like Meta are openly saying, ‘Creative is the new targeting,’” says Flood. “As automation handles more of the media buying, creative becomes the primary lever for differentiation.

How do walled gardens relate to the end of third-party cookies?

Walled gardens offer first-party data, which can help make up for the demise of third-party cookies, which were used to track user activity across websites, but raised privacy concerns.

What are the key differences between walled gardens and the open internet?

With the open internet, you have freedom as to what you advertise and how you do it, but you might not have access to the specific audience you’d like to reach. The walled garden is a specific arena where you have to follow certain rules about what you present and how you present it. The platform owner controls user data, unlike an advertiser’s interactions on the open web. The advertiser only communicates with consumers inside the walled garden, as opposed to a potentially wider audience on the internet.