AdvertisersAgenciesFinanceMediaNewsPoliticsResearchTechnology

Chris Hogg: still not spending on the open internet? Enjoy your race to the bottom

The utopian vision of the open internet as a realm for free speech and community-driven expression is under threat, and with it an irreplicable environment for brand engagement, where marketers can forge their own opportunities for customer engagement. The open internet needs reliable revenue streams to fund its limitlessly diverse array of content, but walled gardens continue to eat up a disproportionate share of advertising spend.

Brands need to understand what’s at stake if the open internet dries up, and the potential rich opportunities found by investing in it. At a time when big tech platforms are increasingly detached from public interests, how can brands do their part to support the open internet, and uncover unique, data-driven consumer insights in the process?

What’s at stake if we lose the open internet?

The open internet is more than a technological framework, it’s a cornerstone of society as we’ve come to know it. It grants limitless access to information, empowering individuals globally with knowledge and resources crucial for education, research, and personal growth.

By dissolving geographical boundaries, the open internet fosters communication and collaboration on a global scale, hosting a mixing of minds that is fertile ground for innovation, where groundbreaking technologies and era-defining cultural movements are born. It upholds freedom of expression and strengthens social connectivity, allowing people to maintain relationships and build communities online; precious spaces where individuals can voice their opinions and engage in discourse without fear of censorship.

Walled gardens present a different vision. These closed ecosystems restrict access to content and services, limiting users’ exposure to diverse perspectives and stifling innovation by constraining developers’ ability to create interoperable applications. The monopolistic tendencies of walled gardens allow a few players to exert significant control over available content and services, often leading to anti-competitive behaviour that harms consumers by reducing choice and innovation.

The open internet is fertile ground for brand growth

For brands, the open internet offers unparalleled advantages. Nowhere else can new markets for businesses be discovered or created so easily, connecting companies to a global customer base with operational efficiency that would have seemed like magic just decades ago. These customers can be engaged across a variety of complementary and competing online channels, such as social media, websites, search engines, and digital advertising networks.

Brands have more direct ownership of their reputation, as they can monitor and respond to customer feedback and discussions, building trust and credibility with a human touch. By engaging directly with their target audience in real-time, brands can establish meaningful relationships and gather valuable feedback through review pages, blogs, and forums.

Whereas the fragmentation caused by walled gardens hinders communication and collaboration across different platforms, the open internet encourages innovation and collaboration among brands, developers, and third-party service providers. It also offers unique first-party data from various online touchpoints, helping brands understand the consumer preferences and trends that define effective marketing strategies.

Walled gardens’ gain is the open internet’s loss

The open internet remains ‘free’ thanks to its diversity of revenue models. Advertising plays a significant role — with websites offering free access to content in exchange for displaying ads — while subscription models have proven to be a steady revenue stream, sustaining platforms and supporting content creation.

Concentrating all advertising spend within walled gardens poses severe risks as 66% of global ad spend is anticipated to be concentrated there. Diversity of content is at the mercy of big tech gatekeepers that prioritise content aligned with their commercial interests, leading to a homogenised online experience. Reduced competition allows these platforms to dominate the advertising market — limiting options for advertisers and publishers — while the unequal balance of power in data exchanges between platforms and advertisers hampers effective campaign optimisation.

It’s even worse for publishers. Increased dependence on walled gardens makes publishers vulnerable to algorithm changes, policies, or revenue-sharing terms, potentially compromising their independence and sustainability. This is amplified by how walled gardens will restrict access using innovation in AI, cutting publishers off from consumers even more.

Big tech is detached from both brand and public interests

Brands that are dependent on walled gardens are shooting themselves in the foot as two-thirds of attention is spent outside walled gardens. Limited reach, reduced options for ad placement, and heightened competition within these ecosystems inflate advertising costs and reduce return on investment. Years of audience growth can be undone overnight through changes in algorithms or pricing models imposed by walled gardens, who hold access to user data as ransom against brands that might seek alternatives.

Not only do walled gardens stand at the epicentre of privacy concerns, but they are also responsible for information filter bubbles that cause social isolation and content feedback loops that can spiral towards extremism.

On the open internet, brands and publishers can set the terms

The ace that walled gardens have always had up their sleeve is their vast quantity of audience data, but don’t be tricked into thinking it’s the only valuable data out there. If brands and publishers on the open web embrace a collaborative approach to their owned data assets, they can uncover rich consumer insights without surrendering their independence.

A joint effort towards greater interoperability — achieved through collaboration on standards and protocols — can establish pipelines to share permissioned data on terms that are beneficial to both parties, rather than hoarded by one side to be sold back to the other. Brands that engage in equal collaboration can ensure they uphold data privacy and security through robust protection measures over which they have full oversight.

We know the direction that big tech is going, and it isn’t in anyone’s interest but their own. On the open internet, however, brands have an opportunity to carve their own path, and support a rich, diverse, and innovative ecosystem on the way.

By embracing the open internet, advertisers can drive growth and success rather than get stuck in a race to the bottom against other brands trapped within walled gardens.

Chris Hogg is chief revenue officer, Lotame.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button