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OPINION The world of retail media walled gardens – and the gravity theory of data trades

Walled gardens can be a good thing or a bad thing, depending on your perspective – but one thing is clear, retail media relies on retailer walled gardens of data. However, as retail media takes off, these walled gardens are starting to form their own complex ecosystem, writes Colin Lewis.

A walled garden in the context of digital advertising is an ecosystem where the operator controls the applications and content. Walled gardens have a couple of distinct features:

  • Walled gardens control the data collected within their environment. This means they have exclusive access to user data, which they can use to target advertisements more effectively, for example, Facebook, Google and Amazon:
  • Advertisers must go through the platform’s advertising system to reach users within a walled garden.
  • Walled gardens often have limited interoperability with other platforms. This means that data, content, and services within the walled garden are not easily shared or accessed outside of it.

Retail Media Networks use their vast troves of shopper purchase data within their ecosystem to offer targeted advertising opportunities to sellers and brands on their platform. This creates a walled garden that is now creating its own ecosystem.

This is the Quo Vadis Space Scape that breaks the Retail Media ecosystem players down into five key areas. Quo Vadis is a newsletter focussed on programmatic advertising. It calls this visual the Gravity Theory of Walled Garden Data Trades.

As Roger Dunn, Global Retail Media Lead for Diageo points out “It’s actually a model to help theorise why hundreds of walled gardens will trade data with each other through clean rooms, based on two underlying economic principles.

What’s in the model?

  • Publishers (Supply): Publishers operate websites and sell advertisements to their audiences. They previously depended on third-party cookies but now secure their data like traditional walled gardens. This group includes major social media platforms like Meta and TikTok, as well as high-traffic sites such as Yahoo and The New York Times.
  • Streaming and Connected TV (Supply): A few years ago, only a few streaming apps like Netflix, Hulu, and Amazon Video dominated. Today, there are hundreds of players. These platforms all function as walled gardens. Notably, 70% of consumer time on CTV is spent with the top 10 players.
  • Retail Media (Supply): This sector includes top retail media players and tech providers such as Criteo, CitrusAd, The Trade Desk, Zitcha, and Flywheel. A few years back, most of these ventures didn’t exist, but now there are hundreds, all creating their own walled gardens.
  • Advertisers (Demand): This group is derived from Semrush’s Top 100 search spenders and Interbrand’s top brands list. With the decline of third-party cookies and audience signals, advertisers started building direct first-party relationships with consumers, often capturing email addresses or phone numbers with opt-in consent, which are then hashed into usable identifiers. For instance, Procter & Gamble has amassed over 1 billion IDs for precise targeting. This level of data collection was non-existent five years ago.
  • Market Makers: Positioned at the centre, these players facilitate data trading among the other groups. They are driving the creation of a data trading market, influenced by external pressures and the need to capture increasing marginal utility. Examples include InfoSum, Amazon Marketing Cloud, Decentriq, and LiveRamp

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