webinar: limitations of walled gardens

WEBINAR - NOVEMBER 30, 2016

BEYOND THE WALLED GARDENKatana 4INFO

KATANA WEBINAR SPEAKERS

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CHUCK MOXLEYANDREAS ROELLKATANA | EXECUTIVE CHAIRMAN - PRESENTER 4INFO | CHIEF MARKETING OFFICER - PRESENTER

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What is a walled garden?

A ‘walled garden’ refers to a major media publisher that controls the user’s access to web content and services, making it difficult to use data outside their walled environment with the goal of generaMon increased profits through limiMng vendor collaboraMon.

By virtue of their size and ubiquity, select walled gardens have become many adverMser’s one-stop-shop for adverMsing data, media buying and consumer data.

Walled Gardens - Katana/4INFO - November 2016

Facebook and Google are the powerhouse ‘walled gardens’ of the digital adverJsing space.

In Q1 2016, 85 cents of every new dollar spent on digital media went to Google and Facebook.

Walled Gardens - Katana/4INFO - November 2016

(Source: Internet Retailer)

Google & Facebook Google & Facebook are growing faster than the rest of the market.

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0%

10%

20%

30%

40%

50%

60%

70%

YOY Growth

Google Facebook Others

Source: 4INFO

Google and Facebook

In 2015, 50% of mobile ad spend in the US was with Google and Facebook. $54 billion of the $77 billion spent on mobile in the US was distributed between two companies.

Marketers are struggling to find a balance between: • the need to scale personalized adverMsing • and their desire to have more control of data across channels

This duopoloy has grown nearly 80% YOY. Source: Venture Beat

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Publishers have been self-reporJng metrics based on what is performing best in their environments with liZle to no independent data reinforcement.

The growth of walled gardens has resulted in:

• Limited impression-level sets • Lack of transparency • Restricted understanding of customer behaviors across channels

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The Problem of Walled Gardens

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Source: clickz.com

Digital will represent 37% of US total media ad spend, accounMng for $72 billion of the $195 billion.

OperaMng with and within these walled gardens is inevitable for adverMsers, so marketers have to strategically diversify themselves outside the walled gardens.

Walled Gardens - Katana/4INFO - November 2016

US Digital Ad Spend will Surpass TV this Year

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The Challenges of Walled Gardens

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1. Losing sight of valuable data

2. Managing across closed pla^orms

3. Pla^orms o_en conduct own campaign measurement

4. Forge`ng the outsiders

5. Increasing fear about lack of control

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Challenges of Walled Gardens

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• Zero transparency with what’s done with your data, creaMng a virtual walled garden

• Risk of having this private data fall into someone else’s campaign (chances are that walled garden is working with a compeMtor)

• Walled off from the process and you only see what data comes in/out

Source: 4INFO

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Challenge #1: Losing Sight of Valuable Data

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1. Risk of releasing unique data and informaMon to a larger company with different goals of yours 2. May require giving your agency access to your data 3. Walled gardens also work with your compeMtors 4. Requires addiMonal work for each ad plalorm you work with 5. Your customer data is iteraMve and constantly changes.Source: 4INFO

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Problems With Giving a Walled Garden Your Data

5 REASONS

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• User idenMficaMon across different closed plalorms is nearly impossible

• Frequency of targeMng a customer

• Tracking across plalorms • Walled gardens compete with each other,

so they wall off certain informaMon which can lead to poor assumpMons on a buyer’s purchase cycle

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Challenge #2: Managing Across Closed PlaKorms

Source: 4INFO

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•Present skewed results

•Walled gardens will measure in their own system/dashboard, but might only measure type type of performance metrics

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Challenge #3: PlaKorms ONen Conduct Own Measurement

Source: 4INFO

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Source: Google

• There are individuals who don’t use Facebook or Google

• Can’t track non-users with walled gardens, so it’s importance to create a separate strategy specific to this demographic so they aren’t missed

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Challenge #4: ForgePng the Outsiders

Source: 4INFO

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• Rising fear of the walled gardens’ power as they conMnue to dominate the space

• Have power to control pricing, uneven the playing field and squeeze out the smaller players/shut down new ideas

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Challenge #5: Fear About Lack of Control

Source: 4INFO

So, do we want to be in this ecosystem that’s dominated by so few? Yes.

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Being part of the walled garden ecosystem is unavoidable. Don’t allow your brand or company to be controlled by the plalorm you work with.

Supplement your walled garden approach to enable you to take control of your: • Data • Media buying • Results

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Why We Want to be Part of a Walled Garden Ecosystem

How to Approach Walled Garden Strategy

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How to Approach Walled Garden Strategy

Take control of your data strategy Use an independent pla^orm Get full-funnel analyJcsDemand independent campaign measurement

In order to own your customers, you need to own or have their

data, manage how it’s used, and determine how it’s measured. Create separate strategies for

customers, prospects, data and delivery — and don’t forget to

account for mobile!

Building your own markeMng infrastructure can be expensive,

so finding an independent plalorm can prove very beneficial. Independent

plalorms give you access and control, flexibility and

customizaMon doing what walled gardens can’t do.

Asking for independent campaign measurement will ulMmately help

your campaign down the line. You’ll be able to see what’s

working and what isn’t, visibility to unbiased results and access to

important results (even when they are bad).

Get the whole picture of your campaign, tracking your

customer from the beginning to end. The goal is to drive your customer to the end of the

funnel, and full-funnel analyMcs will give you a berer

understanding to make markeMng decisions.

There are benefits with working within the walls, but it’s very important to be aware of the risks that come with it.

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Source: 4INFO

How to Choose Between Similar PlaKorms

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The key is to look at how they link people to devices and then to data, which affects accuracy and reach. Linking mobile devices to people is criMcal for linking data (such as past purchase data) for targeMng and measurement. It’s a first step in the evaluaMon process and a crucial one.

How are people linked to devices?

Key IssueMAIDs

IP

TV-IP Desktop IP

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How to Choose Between Similar PlaKorms

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Accu

racy

Scale/Reach

DETERMINISTIC THE IDEAL

PROBABLISTIC

There are two common ones - probabilis7c and determinis7c.

DeterminisMc delivers higher accuracy, but lower scale. ProbabilisMc gives you greater scale, but lower accuracy. The ideal choice lies in the top right quadrant as you see here. It’s one that borrows the best of both worlds to give you the accuracy of determinisMc matching and larger scale from the probabilisMc model to enable a broader audience reach.

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How to Choose Between Similar PlaKorms

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ProbabilisJc methods can introduce ~30% inaccuracy in your targeJng and measurement.

Plalorms generally only aggregate email address informaMon that Me an individual to a device. However, the data that’s used for targeMng and measurement is usually linked primarily to a home address (such as frequent shopper data, parcel data, census data, credit records, etc.).

That means in order to link devices to data, you have to match e-mail addresses to home addresses and then match to the data. And unfortunately, that match rate can be really low because the average consumer has six different email addresses and they only last three years on average.

RegistraMon data can be limited to email address

Match rates between email and home address is

10-40%

Database

Most 3rd party data and CRM data have access to

home address

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BE DATA DRIVEN.

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BEYOND WALLED GARDENS: WEBINAR TAKEAWAYS

In order to circumvent the challenges of walled gardens, adopt a strategic approach to take control of your digital media buying.

Demand independent campaign measurement to get the full scale of reporMng.

As you evaluate which plalorm to use, look at how a plalorm links people to devices and then data.

Stay in touch!

Contact: letstalk@katanaconnect.com 225 Broadway Suite 430, San Diego, CA 92101