Get Ready for the Rise of Walled Gardens

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The long-running debate on the value of closed platforms where a company maintains control over applications and content became even more relevant this year as walled gardens expanded across the Internet.

Walled gardens are good for business. Walled gardens are bad for business. The long-running debate on the value of closed platforms where a company maintains control over applications and content became even more relevant this year as walled gardens expanded across the Internet. AOL introduced one of the earliest examples of a walled garden. For many people, accessing "the Net" in the 1990s meant dialing into AOL's modem banks. By 2015 though, AOL was a shadow of its former self when Verizon acquired the company for $4.4 billion. Since then, other companies like Google, Apple, and Facebook have built bigger walled gardens that continue to grow.

Earlier this year, Facebook unveiled Instant Articles. Instead of linking to an article, Instant Articles are published directly on Facebook's News Feed and load ten times faster than mobile web articles, the company claims. Google announced that by the end of 2015, advertisers will only be able to buy YouTube ads either directly through Google's sales force or through DoubleClick Bid Manager and Google AdWords. Also this year, Apple included an app in its latest iOS update for reading news on iPhones. And Snapchat recently relaunched its proprietary publishing platform, Discover.

Publishers are increasingly dependent on platforms with huge audiences like Facebook and Google for directing attention to their sites. Additionally, the rise of ad blockers on the mobile web could send more advertisers to third-party apps and other closed platforms where the ad blockers don't work.

But companies naturally want users to remain on its properties as long as possible and so it's not a surprise that Facebook, Apple, and Google aren't content to remain middlemen. That could be a problem for publishers and advertisers as tech companies' walled gardens include more features.

For advertisers, it raises questions about whether a closed platform's ad tech products can be trusted to function objectively, or if they're funneling ad spend through the platform's media networks. For publishers, the question is how much influence does the platform exert in determining which content reaches audiences? Or will companies find a way to bypass these walled gardens? Next year could be a very interesting year.

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EXPERT OPINION