In today’s media landscape, closed ecosystems are not only thriving—they’re proliferating. Following in the footsteps of the walled gardens of Facebook, Google and Amazon, the power players in the emerging Converged TV (CTV) space—Comcast NBCUniversal, AT&T-Time Warner, ViacomCBS and others—are organizing themselves into their own ecosystems, built to deliver on the strength of their first-party data, premium inventory, privacy-controlled infrastructures and advanced personalization capabilities.
The trend is accelerating. As brands rapidly navigate the disruptions COVID-19 has caused to the media landscape, they have sought refuge in the platforms that provide reliable measurement and premium supply. The flight to closed ecosystems, already well under way, is reaching a terminal stage.
Operating in this reality comes with new challenges: namely, the challenge of delivering a consistent message across these fragmented environments. Brands need to match the relevancy and personalization that consumers have come to expect in an era where algorithms curate highly individualized media experiences in every content modality, beginning with social but now extending to audio and video. Doing that requires the facility to operate between these closed ecosystems with fluency and ease. Interoperability among the enclosures is emerging as a key imperative, challenge and opportunity within the marketplace.
In the coming years, the ability to coherently activate and measure campaigns between multiple closed ecosystems will come to represent a new marketplace disruptor in its own right. The brands that solve this problem will not only have the edge in reaching their audience efficiently, but also in their ability to listen and react to what that audience wants. Such insight will inform everything from brand to product strategy.
Interoperability is becoming a new organizing principle for both marketers and ad-driven tech platforms alike—in essence, creating a new currency for media. To maintain good standing with brands, the big walled gardens will be pressed to expand their accessibility to grow and diversify the number of advertisers on their platforms. At the same time, the core strength of these closed ecosystems will come from protecting the many advantages offered by their garden walls. Meanwhile, from an advertising standpoint, brands must prepare themselves for a future in which all major avenues for consumer attention are walled gardens, and the ability to operate seamlessly between them will be the next great competitive advantage.
The Platform Play: Democratization of Ad Dollars
As vertically integrated media conglomerates refine their next-generation offerings and frame up the confines of their closed ecosystems, they’re going to witness many of the benefits already seen by the walled gardens of Google, Facebook and Amazon. After all, these platforms democratized addressable advertising by creating environments in which personalization, business results and privacy can coexist—and they did it with easy self-serve tools.
The walled gardens’ approach to the digital ecosystem brought thousands of new mom-and-pop advertisers into the digital advertising fold, where they were at last able to compete for impressions against large brands. All incumbent closed ecosystems and new entrants—Comcast NBCUniversal, AT&T-Time Warner and ViacomCBS, not to mention players like Disney, Fox and others—have a vested interest in doing the same in the emerging category of CTV. If these players are successful in expanding the advertiser pie, today’s Fortune 1000 brands will suddenly find themselves competing against legions of mom-and-pops in the realm of TV—a kind of competition they haven’t faced within that medium before. That’s good for the platforms. But it presents a considerable challenge for the incumbent brands.
Interoperability as a Competitive Differentiator
As the CTV platform leaders of tomorrow firm up their value propositions in the marketplace, they’ll be constantly challenged to provide greater audience insights to the brands they serve. But by no means should we expect to see a benevolent outpouring of easily portable audience data from these platforms.
As such, today’s brands can’t sit around and wait for the ecosystem of walled gardens, specifically within the emerging CTV landscape, to become interoperable all on their own. Rather, the proliferation of closed ecosystems means that, in the near term, only brands that do the hard work to rationalize and standardize their audiences and attribution models among closed ecosystems will have the advantage.
In the coming years, the ability to activate and optimize audiences across platforms will become the new currency of the digital ecosystem, as well as a new source of disruption. As the pool of advertisers within CTV expands, strength of data—rather than budget—will become the new economy of scale in the competitive landscape. In this regard, incumbent brands do maintain an edge due to their volume of consumer touchpoints. But if they fail to activate their data in a way that enables addressable, one-to-one conversations with customers, they’ll find themselves vulnerable to disruption by much smaller competitors that have put such understanding and communication at their core.
Ultimately, the advantage of an interoperable data strategy doesn’t stop at media spending. The brands that take on interoperability as an internal imperative will also be opening the door to new insights into not only communications but also product strategy. The same data sophistication that allows a brand to advertise across platforms will be the data that uncovers the next big consumer trend.
Over the past 10 years, many industries have been disrupted because incumbent brands failed to understand and embrace the value of first-party within the social ecosystem, giving rise to the new class of DTC disruptors. Now, as we witness a massive sea change in which TV will take on many attributes of the digital landscape, we stand on the precipice of another wave of disruption—one in which data portability and interoperability will emerge as key competitive advantages. Today’s incumbent brands cannot afford to be caught flat-footed again, and that means they can’t afford to postpone the hard work it takes to become interoperable today.