Signal’s Prediction for Digital Marketing in 2016: Limitations of Walled Gardens Will Force Advertisers and Publishers to Make Tough Choices

It’s a new year, and it’s time to start acting on your 2016 marketing goals. Signal’s new report, “How Digital Marketing Will Change in 2016 – What Marketers Need to Know Now,” is designed to help you lean into key marketing and technology trends that will enable you to turn your plans into reality. This is the fourth of eight blog posts in a series about Signal’s predictions for the New Year. This installment addresses what marketers need to consider when advertising inside today’s increasingly powerful walled gardens.

As advertisers’ spend on digital ads in the US was expected to total over $27 billion last year, the top three walled gardens (Facebook, Google and Twitter) will have made up over 43% of that spend. That’s because these companies can promise a rich inventory of logged-in user data, allowing advertisers to target and reach consumers across their various devices.

Advertisers are finding campaign success in these walled gardens, but they are feeling the full effect of why they are indeed called that: advertisers put in their data but they do not get it back to build their profile data and create
a true universal view of the customer journey. They offer a very prescriptive model that will deliver results, but it ends with the campaign. Because advertisers don’t get back user-level campaign data, there is no opportunity to gain customer intelligence from those results.

This limitation ultimately creates a dependency on these networks, and advertisers are seeking new ways to break through and build their own customer identities that can be used across all their channels and for a lifetime of targeting, not just one platform or campaign.

Digital publishers, on the other hand, are feeling the pain as well. Their CPMs have declined in the face of industry fragmentation and the spread of programmatic buying, and they lack the technological sophistication of the walled gardens. The good news for publishers is that they are increasing their scale by creating private marketplaces, and can offer advertisers more value by building their stores of authenticated user data.

As both advertisers and publishers have realized the limitations of walled gardens, this is the year they will start thinking about ways to create more value outside of those walls, which may take some cooperative efforts. With an already rich pool of authenticated data, the idea of a collaborative identity network can provide the reach and scale advertisers seek, and the offerings that many publishers lack.

Collaboration can take place between trusted partners such as advertisers and publishers, retailers and co-op advertisers, or loyalty program partners. The cooperative approach allows both parties to reap the benefits of contributing to and using a trusted data and identity network to accelerate targeting of known customers at scale. They can work together and make their own rules for sharing anonymized data in a safe, secure and privacy-compliant environment, while achieving precision targeting and a higher valued ad inventory.

Identity networks are already a reality through data trusts powered by Signal. As a neutral and independent platform, Signal provides complete transparency and allows advertisers and publishers to maintain complete ownership over their first-party data, which is a vital step toward breaking dependencies on walled gardens.

To read more of Signal’s 2016 Digital Marketing Predictions and the action steps you can take toward building a cooperative identification network, download the report: “How Digital Marketing Will Change in 2016 – What Marketers Need to Know Now.”


Originally published January 06, 2016

Warren Billington

Warren is the former Managing Director for Australia, New Zealand, and Southeast Asia.

Subscribe for Updates