A walled garden, also known as a closed platform or environment, is a software system wherein the carrier or service provider controls applications, content, and media. They restrict convenient access to unapproved applicants or content.
Think of it as a private piece of property, such as a house’s garden, as opposed to a public park. You cannot just enter someone’s garden without permission, whereas you can walk around in a park anytime.
Read More about a “Walled Garden”
Apple is probably one of the most popular users of the walled garden approach for its operating systems (OSs), specifically iOS. How did the concept start?
Origin of Walled Garden
The term “walled garden” was coined by Tele-Communications Inc. founder John Malone. AT&T later acquired his company.
The first users of the concept were pioneer U.S. telecommunications companies. Bell System was an early adopter when it tried to make its hardware exclusive to the phones its customers were using. As a result, the company leased instead of sold the phones to end-users.
The practice spread to Internet service providers (ISPs) that restricted their customers’ access to external services. Comcast and AT&T shipped their hardware that disallowed users from accessing resources they do not own.
Examples of Walled Gardens in Technology
Various companies have used wall gardens in the past, including:
- AOL: Launched the walled garden service model in the 1990s. It offered sponsored content to users, such as sports content from CBS and news from ABC. It became the company’s first effective ad selling method.
- Amazon: Launched its Kindle line of e-readers, which became its fastest-growing product, accounting for more than 10% of the company’s revenue.
- Apple: iOS and its mobile devices restrict users from running unapproved applications from a digital distribution service.
- Barnes & Noble: Its Nook devices removed users’ ability to gain root access in late December 2011. As such, they cannot sideload applications from sources other than the NOOK Store. In May 2013, the vendor opened its ecosystem somewhat, allowing users to install apps from the Google Play Store.
- Kwangmyong: North Korea’s national intranet service does not permit entrance to outsiders without government approval.
- Verizon: Verizon Wireless’s code-division multiple access (CDMA) network and policies disallow non-Verizon-sanctioned devices on its network.
Are Walled Gardens Just Used in Technology?
No, walled gardens are not only applied to platforms and networked environments. The concept is also gaining traction in advertising technology (adtech). In adtech, though, a walled garden is a closed ecosystem under the control of its operator.
A digital marketer is said to have reached the walled garden level when it can force clients to use its entire suite of applications. These solutions can include a digital marketing platform (DMP) for audience targeting, a demand-side platform (DSP) to push ads for selected products, and a dynamic creative optimization (DCO) tool to personalize ads and ad hosting.
What Companies Use Walled Gardens in Advertising?
Two of the most well-known companies using walled gardens in adtech are Google and Facebook, also referred to as “the duopoly.” These two companies are considered leaders in the field because:
- They have lots of consumer data. Google has more than 1.5 billion active monthly Gmail users, while Facebook has 2.38 billion.
- Users access their Google and Facebook accounts via different devices daily, giving the duopoly access to accurate consumer data, including what devices they use. Note that cross-device targeting and attribution is challenging for independent adtech vendors.
- Chrome and Android give Google great control over audiences.
Google and Facebook aim to increase their stronghold in the adtech space with their latest forays:
- Facebook Watch: A video streaming service.
- Facebook Showcase: A program that lets premium video advertisers buy spots on Facebook Watch.
- Facebook Creative Shop: A division that works with brands across its portfolio, including Instagram, Messenger, and Oculus.
- Google Zoo: A creative think tank that assists brands in using YouTube and other Google tech.
Google and Facebook are, however, not the only ones, considering the walled garden approach in adtech. Amazon and Apple are as well, giving birth to the abbreviation “Google, Amazon, Facebook, and Apple (GAFA)” or “Facebook, Amazon, Google, and Apple (FAGA).”
Walled gardens offer both advantages and disadvantages. While they can increase a company’s market share, they can also alienate customers who like variety.