Why the open internet is crucial to our everyday lives

Envision your day. Do you start it by reading the latest news online over a cup of coffee? Do you turn on a podcast while commuting to work? Are you streaming the latest series or watching your favorite sports team play?

Many of our daily rituals are powered by the open internet. Zoom in, and you can see how streaming content, journalism, and retail sites stay up and running in large part thanks to advertising revenue and the open flow of data showing how content and advertising perform. And that’s why the David and Goliath battle between the open internet and walled gardens is taking center stage.

As Willie Jackson, executive VP of data strategy at media agency Starcom, puts it: The open internet works to shield the media ecosystem from monopolistic power.

“It shifts the conversation to being a collaboration as opposed to a directive,” Jackson tells The Current. “If you go into a walled garden, you have a very limited say in how you steward your [ad] dollars. It’s a fairly self-contained ecosystem, and they set the rules of engagement. The open web creates an opportunity to identify where you want to be and how you want to show up in those environments.”

Jackson, who was named to Ad Age’s 40 Under 40 list, believes the COVID-19 pandemic spurred brands to reflect on the power dynamic they face with walled gardens and consider where consumers in the U.S. are actually spending time online. In 2020, the average American spent 66 percent of their time on the open internet, according to consumer data company Statista. However, 60 percent of ad spend still went to walled gardens that year. Jackson suggests more brands will examine this as they seek more oversight into their campaigns.

“Brands feel like they should have more control than they’ve ever had before,” Jackson says. “For a period of time, people [accepted] this is just how it works when you work with Google or with Amazon. And I think people are holding those platforms’ feet to the fire and saying, ‘If you can’t get [the insights I need] to me, I have a viable alternative now.’”

One aspect of this is the proliferation of alternative identity solutions that unlock first-party data while protecting privacy, which challenges the deterministic log-in data that long gave walled gardens an upper hand in advertising. Leveraging first-party data is only becoming more important with the expected end of third-party cookies on the horizon and as environments that are not dependent on cookies — like streaming TV, mobile, and audio — continue to rapidly grow.

Powering streaming
The open internet has also allowed upstart brands like Tastemade to enter the streaming space. Consumers can nourish their content cravings through the lifestyle, food, and travel brand’s multiple free ad-supported television (FAST) channels and video on demand (VOD) programs.

“Previously, the capital investment to be able to start a linear channel meant that there were just not that many people who could do it,” Evan Bregman, Tastemade’s general manager of streaming, tells The Current. “In a land of infinity, there’s a lot of opportunity to take advantage of a long tail of viewership that is really big and create a more personalized offering, because there are consumers out there who want lots of different things. We can provide a lot to them.”

An open flow of data is the lifeblood to how Tastemade operates, influencing the content it produces and even how its shows are edited.

“At the end of the day, we as providers of content will only do better if we know a lot about how our content is performing and how our businesses are performing,” Bregman says. “The same thing then goes on the ad side. The value of the overall marketplace grows as people are able to understand performance and understand targeting with more granularity and more specificity.”

Funding journalism
While the Tastemades of the world have risen, journalism establishments have been hit especially hard after losing billions in revenue to walled gardens since the dawn of online news. There is hope for the media industry though, with publishers leveraging their first-party data and using Unified ID 2.0 (UID2) to increase their revenue. An executive at PubMatic, which works closely with publishers to increase their ad revenue, says transparency is a core tenet for publishers to succeed.

“The publisher and consumer relationship is a key part of the value equation for all sides of the digital media ecosystem,” Jeff Hirsch, chief commercial officer for PubMatic, tells The Current. “We see that publishers are already bringing powerful engagement and insight to advertisers based on that first-party relationship.”

While PubMatic largely supports publishers, Brands4News is making its own impact by working alongside advertisers. Ebiquity executive Ruben Schreurs launched Brands4News this year as an open-source resource completely self-funded by Schreurs and a handful of other people. The upstart brand supports advertisers by giving them free templates to see how their ads will look on a news site.

“There is high effectiveness to be gained for advertisers in high-quality context if the right, considerate approach is taken to investing in this media,” Schreurs tells The Current. “So it’s not a zero-sum game, where they have to decide, ‘Well, if we invest 10 percent of our money on quality journalism, that money is down the drain and has no returns for us.’

Advancing retail media
Retail media networks also connect advertisers with much-valued first-party data, which has revolutionized the open internet. Within the retail media space, Dollar General stands out because of the unique audience it attracts. Around 75 percent of the company’s stores are in rural markets, representing about 30 percent of the country. With over 90 million unique customer profiles, CMO Chad Fox says the Dollar General Media Network “is the easy button for delivery to an incremental 30 percent of the country.”

Fox believes in unlocking the power of customer profiles through anonymized, collaborative sharing in a privacy-centric environment, yielding more personalized experiences.

“It’s a beneficial outcome versus a motivator for platform selection in the media mix,” Fox tells The Current. “The driver is clearly reach and relevance. But being able to reach customers where they are — retail, journalism, entertainment, music, et cetera — is an ecosystem sustained through ad dollars. It’s a virtuous cycle fueled by the coexistence of consumers, publishers, and advertisers — all three variables are required to solve for the outcome.”