The ‘Walled Gardens’ of the Web — and What Comes Next

February 2024

Are the walls coming down? Explaining the ‘Walled Gardens’ of adtech, and the potential replacements

“Oh, give me land, lots of land under starry skies above

Don’t fence me in

Let me ride through the wide open country that I love

Don’t fence me in”

-Bing Crosby

Have you ever noticed that no matter where you go online, you never really leave Google behind? Or Facebook, or Apple? Your profile information hangs out in the corner of your browser, sitting over your shoulder while you surf the web.

Whether you knew it or not, you’ve been inside a “walled garden,” and the whole Internet has been structured that way for years. While there are advantages to this setup that have allowed the model to proliferate, the writing may be on the wall for the walled garden, and everyone from users to publishers should take note.

In this blog, we’re walking through the basics of what a walled garden is, how it works, and what’s coming next.

Contents

What are “Walled Gardens” Online?
Examples of Walled Gardens
Why Do Walled Gardens Exist?
What are the Upsides and Downsides of Walled Gardens?
The Distributed Future

Case Study: find out how Insticator Commenting helped Brit + Co boost their online engagement by 50%.

What are “Walled Gardens” Online?

The early days of the Internet were the Wild West: borderless, unsettled, and frequently unsafe. Users never knew what was just around the bend, which was part of the charm — but also part of what made it difficult to do business. Just like the real Wild West, that frontier got settled by respectable businesses, who promptly began fencing in whole ecosystems for themselves.

Wherever you go online, you’re likely playing inside one of those walled gardens, whether you’re using your Facebook or Google login to sign into an online store, browsing on an Apple device, or opening a new tab in Google Chrome. It’s worth noting, a huge portion of the internet operates on servers owned by Amazon Web Services. In 2022, $7 out of every $10 in online ad spending went to Google, Facebook, or Amazon.

These are the walled gardens of the internet, and when you’re inside their walls, you play by their rules.

Examples of Walled Gardens

We’ve already rattled off some of the biggest names in walled gardens, but there are a few different kinds. Facebook and Google are examples of one kind: users often treat their Facebook page or Google home screen as the “front page” of the internet (with apologies to Reddit, which actually calls itself “the front page of the internet”), only viewing and interacting with materials presented to them through that page. As such, Facebook gets to exercise sweeping power over what is and isn’t allowed to be placed on their site — a company or website that gets blocked on Facebook could be doomed, if that’s where their target audience is, or they haven’t diversified their offerings to other platforms. Similarly, every company on the Web spends time and money on optimizing their pages (including this blog) to show up in a good position in Google’s search results.

Outside the confines of the Web, Apple often engages in a walled-garden ecosystem on the hardware side. By using proprietary connectors and cables, and by making several features only function on Apple hardware, users are encouraged to buy only Apple products, and not mix-and-match from other manufacturers. But they continue that vertical integration on the software side, with their own browser – Safari – and content feeds within their devices.

App stores are often another wall in the garden. Famously, Elon Musk has fought with regulators from countries all over the world over what he can and can’t do with Twitter – but whenever his decisions risk Twitter being removed from Apple’s App Store, he’s backed down. The Apple App Store and Google Play Store are a narrow choke point in the app-to-consumer pipeline, and everyone who wants success needs to follow the guidelines the tech companies have laid out.

Google, Facebook, Amazon, Twitter, TikTok, Pinterest, Snapchat all have one other thing in common as well: the data they collect on their user bases stays within their own ecosystems.

Why Do Walled Gardens Exist?

Walled gardens have been around in some form or another since the earliest days of the internet. In the 90s, companies like America Online, Prodigy, and Compuserve all funneled their users into a very specific experience that may feel somewhat familiar to using Facebook today. But the move to more-aggressively consolidate their data inside their walls and not pass them along to third parties coincided, unsurprisingly, with the EU’s passage of the GDPR in 2018. With stiff fines for mishandling user data, the big companies moved to keep that data protected. In 2024, Google began phasing out support for third-party cookies once and for all, and the whole industry is finally completing a shift that started six years earlier.

“Avoiding billions of dollars in fines” is obviously a big reason these walls have gotten so secure, but there are other compelling incentives for these big businesses to operate the way they have.

What are the Upsides and Downsides of Walled Gardens?

A club with a bouncer and a cover charge is more secure than one that just lets anybody in, and so one advantage to a walled-garden approach is that they tend to be more secure. With a closed setup, the provider is entirely in control of how their data gets encoded and shared, and that protection is worth a lot.

When it comes to the data itself, being in total control of the pipeline means you have a lot of accurate data for your advertisers, as long as they stay inside your ecosystem. This means good ROI while you’re on the inside. Also, Facebook, Google, and Apple are able to track their user accounts across multiple devices, building great first-party data profiles on their users that, again, can be a great boon to advertisers on the inside.

“On the inside,” however, is the key phrase. Another word for a “walled garden,” after all, is “monopoly,” and there are a lot of downsides that come with that. Successes on one walled platform often don’t translate into success on another, and adhering to the specific guidelines of each walled garden often means additional work from your creative team — cropping photos to fit within Instagram’s size specifications, or constructing ad copy around Twitter’s length restrictions, means your ads won’t transfer easily from one platform to another. With so many differences, comparing apples to apples becomes harder, and you’ll often feel like you’re in the dark.

These difficulties persist for users, as well – even as many users find themselves dissatisfied with Facebook or Twitter for various reasons, leaving the platform is often a practical impossibility. Facebook users who try to leave the site often return because it’s the go-to place for setting up party invitations or wishing someone a happy birthday. And Twitter power users often find building a new user base on an alternative platform like Threads or Bluesky to be an uphill battle.

The Distributed Future

In recent years, however, there have been a lot of cracks in the armor of these giants. Twitter’s problems have snowballed since Elon Musk took over the platform. Apple’s strategy for hardware dominance has been shut down by EU initiatives to force them to use the same kind of charging cords as everyone else. And while Facebook is hanging in there, it’s also clear that people are getting frustrated with being tied to these major platforms with little recourse.

That’s why what’s coming next for social media is a more-distributed future. With commenting platforms like Insticator Commenting 2.0, for example, a user’s profile travels with them from site to site, publisher to publisher, without having to adhere to one of the Big Tech company’s guidelines. Individual sites get to decide how to handle things like moderation, blocking, banning, and what topics can and can’t be discussed. Users get to earn badges, points, and other pieces of profile flair that they get to take with them from site to site, and publishers get to collect valuable first-party data that makes compare-and-contrast easy.

It’s not going to happen overnight, but walled gardens are clearly falling out of favor. Alternatives that work better for users, publishers, and advertisers are clearly on the way.

Advertiser Alternatives

While users begin to migrate to a more-distributed way of interacting with one another instead of operating out of gated hubs, alternative methods of online advertising are also beginning to catch some of the spotlight. Supply-side platforms (SSPs), demand-side platforms (DSPs), ad networks, ad servers, ad exchanges, and others are viable ways to get advertiser messages out without going through the major hubs. They’re smaller, but that doesn’t necessarily mean they’re too small to suit your needs or to generate revenue. And they offer the transparency, customization, and ownership that the big players often don’t let you have.

Final Thoughts

The walled garden had a good run, but the future will bring something new - and with it, a lot more opportunities for innovation (and profit) outside the stifling atmosphere of the tech giants. Much like the deprecation of cookies, this shift can bring a lot of chaos, but also new openings for companies looking to the future.

Insticator’s portfolio of solutions are specifically-designed to tackle the changing face of the Web: our content-engagement tools allow for expanded collection of first-party data to tackle the deprecation of cookies, and give your site better metrics for comparison than you can find inside a walled-garden setup. Our Commenting 2.0 platform provides distributed content engagement outside the fence. Finally, with our sister companies specializing in publisher monetization and CTV, we’re ready to tackle the future while earning a solid ROI for our clients. Reach out today if you’d like to talk about weathering the storm.