Walled gardens

Walled gardens, in advertising, are the large companies that sell ads only on their own websites and apps, through their own buying tools and with their own data. The three biggest are Google, Meta and Amazon. Google sells ads on its search results and on YouTube. Meta sells ads on Facebook and Instagram. Amazon sells ads on its shopping site and its streaming service. The name compares each company to a garden with a wall around it: advertisers can enter only through the company's own gate. Together, these companies receive most of the money spent on digital ads in India.

Here is how buying an ad inside a walled garden works. The advertiser opens the company's own ad tool, sets a budget and describes the people it wants to reach. The company runs the auction on its own sites. It uses what it knows about its own logged-in users: what they searched for, which posts they liked, and what they bought. Outside bidding software usually cannot take part. The ad appears, and the company itself reports how many people saw it and how many then bought something. The advertiser cannot take the user data away with it. Outside measurement firms, such as ad verification tools, see only what the company chooses to share.

Why do advertisers accept this? The walled gardens reach very large numbers of people. Their users are logged in, so the company knows that the person on the phone and the person on the laptop are the same. As third-party cookies fade, data of this kind matters more. The cost is less control: the advertiser must trust the company's own numbers about the company's own ads. The walled gardens now also offer campaigns in which the advertiser supplies only a goal and a product. This is described in AI advertising platform.

Take, for example, a coaching institute that wants to reach students searching for "JEE crash course". It buys search ads in Google's own tool, and pays only when someone clicks.

Consider a seller of steel water bottles on a shopping marketplace. It pays the marketplace to show its bottle at the top of the search results, chosen by the marketplace's own data on what shoppers buy. Smaller versions of this, run by other retailers, are called a retail media network.

Say a news website wants to sell the space beside its articles. It offers each slot to many buyers at once, through an SSP. This is the open web.

How is a walled garden different from the open web? The open web is everything outside the walls: news sites, apps and streaming services that sell their ad space to many buyers at once. There, the advertiser uses a demand-side platform (DSP), the publisher uses an SSP, and the auction runs on an ad exchange. Different, independent companies do each job, and outside firms can check the results. Inside a walled garden, one company does every job.