The social media company Snap Inc. is opening its walled garden. Find out how this impacts the world of digital advertising.
The “wall” has come crashing down for Snap.
For the first time, the social technology company Snap Inc. announced it is collaborating with the media measurement company VideoAmp to integrate its full inventory through VideoAmp’s cross-platform planning solution.
This means that advertisers now have broader access to Snapchat’s ad inventory thanks to Snap opening its first-party data to VideoAmp. As a result, Snapchat is the first social platform to allow cross-platform analytics and planning for advanced audiences.
Snap’s strategic move
Along with its first-party data, Snap also plans to integrate its video and augmented reality (AR) inventory into VideoAmp’s identity system. Because of this, advertisers can now strategically allocate their budgets to reach audiences efficiently across connected TV, linear TV, streaming, and digital platforms.
Snap will also be able to run supplemental measurement and planning independently using VideoAmp’s VALID tech engine. With the growing adoption of AR, VideoAmp’s video planning capabilities will provide a valuable solution for advertisers wanting to experiment with new AR formats.
“Previously, Snap integrated anonymized first-party user data individually with some holding company systems for planning on video buys. But this is the first time it has done so with a third-party measurement company on video and the first time with any player on AR. said Alexander Dao, Global Head of Agency Development & Sales Partnerships of Snap Inc.
Breaking down the “walled garden”
Snap has traditionally been a closed platform or a “walled garden” if you will, similar to other social media sites. They kept user IDs within their own ad ecosystems for media planning and measurement. With this news, Snap is moving towards an open approach, allowing for more visibility through VideoAmp.
The integration will use VideoAmp’s cookieless VALID solution, which uses a combination of hashed emails, signed-in users, IP addresses, and device IDs from several companies through clean room technology.
For those who aren’t familiar with the term “walled garden” in regard to ad tech, a walled garden refers to ad platforms where the publisher handles all the buying, serving, tracking, and reporting. Typically, it involves first-party data targeting, self-serve advertiser portals, and auction pricing. It is a closed system where publishers own their ad platform.
Because of this, these closed systems can maintain a large degree of control over their ecosystem, especially with their most precious asset which is their customer data
Some prominent walled gardens in advertising include tech giants such as Google, Amazon, and Meta. These platforms provide access to extensive data, inventory, and centralized audience management. Data on social media and online retailers is constantly updated and accurate. Marketers can easily reach their target audiences through these platforms.
These walled gardens have gained more prominence since the enactment of the General Data Protection Regulation (GDPR) in the European Union. It meant that these tech giants had to be more careful when handling customer data and privacy or else they faced substantial fines and potential litigation.
For advertisers, cross-media measurement has been a challenge for over a decade. Google, Meta, Amazon, and TikTok are taking part in the Aquila cross-media measurement initiative developed by the Association of National Advertisers. The extent to which they will share data with each other is still uncertain. A beta test for the system is planned for next year. However, TV networks have not joined the project yet.
Possible implications on advertising
This strategic partnership between Snap Inc. and VideoAmp could spell good news not just for the everyday advertiser but also for other tech giants who are operating under the “walled garden” paradigm.
The move opens more doors for marketers to integrate AR more easily into their advertising strategies and lets them add the format to broader video plans. This will grant advertisers more autonomy and free reign to play around with AR advertising which would further shape digital out-of-home advertising as we know it.
We could also see a domino effect of the shift from closed-ad ecosystems or walled gardens to a more open ecosystem. Competitors and other social media companies could face the pressure of following suit to Snap’s move. As a result, they could potentially also allow broader access to their inventory and customer data.
The industry has also been seeing a slight shift in walled garden spending. While it’s still going strong with an expected $100+ billion USD inwalled garden programmatic ad spending, eMarketer reports that walled gardens lost a share of the programmatic market for the first time in 2023. We expect this to further decline as more and more companies break away from walled gardens down the line.
With all of these possibilities and implications in advertising, one thing is for certain: tech giants operating in their walled gardens will be watching closely at whether or not Snap’s decision was indeed the right move for them and whether or not, they should follow this trend.
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