Chris Hogg: Still not spending money on the open internet? Enjoy your race to the bottom

The utopian vision of the open internet as a place of free speech and community-driven expression is under threat—and with it an inimitable environment for brand engagement, where marketers can create their own customer loyalty opportunities. The open internet needs reliable revenue streams to fund its limitless variety of content, but closed networks continue to consume a disproportionate share of advertising spend.

Brands need to understand what is at stake when the open internet dries up and the potential opportunities that can be created by investing in it. At a time when major technology platforms are becoming increasingly disconnected from public interests, the question is how brands can do their part to support the open internet while gaining unique, data-driven consumer insights.

What is at stake if we lose the open Internet?

The open Internet is more than a technological framework, it is a cornerstone of society as we know it. It grants unlimited access to information and gives people around the world knowledge and resources vital for education, research and personal growth.

By breaking down geographic boundaries, the open Internet promotes communication and collaboration on a global scale. It allows a mixing of opinions that creates fertile ground for innovation, where breakthrough technologies and era-defining cultural movements emerge. It preserves freedom of expression and strengthens social connectivity, allowing people to cultivate relationships and form communities online. They are valuable spaces where individuals can express their opinions and participate in discourse without fear of censorship.

Walled gardens offer a different vision. These closed ecosystems restrict access to content and services, limit users’ ability to learn about different perspectives, and stifle innovation by limiting developers’ ability to create interoperable applications. The monopolistic tendencies of walled gardens allow a few players to exert significant control over available content and services, often leading to anti-competitive behavior that harms consumers by limiting choice and innovation.

The open Internet is fertile ground for brand growth

For brands, the open internet offers unprecedented benefits. Nowhere else can new markets be discovered or created so easily for businesses. Companies can connect to a global customer base with an operational efficiency that would have seemed like magic decades ago. These customers can be reached through a variety of complementary and competing online channels, including social media, websites, search engines and digital advertising networks.

Brands have more direct control over their reputation as they can monitor and respond to customer feedback and discussions, building trust and credibility with a human touch. By interacting directly with their audience in real time, brands can build meaningful relationships and collect valuable feedback through review sites, blogs and forums.

While the fragmentation caused by walled gardens hinders communication and collaboration between different platforms, the open internet encourages innovation and collaboration between brands, developers and third parties. It also provides unique first-party data from various online touchpoints and helps brands understand consumer preferences and trends that drive effective marketing strategies.

The gain of walled gardens is the loss of the open Internet

The open internet remains “free” thanks to its variety of revenue models. Advertising plays an important role – websites offer free access to content in exchange for displaying ads – while subscription models have proven to be a steady source of revenue that keeps platforms alive and supports content creation.

The concentration of all advertising spend in closed systems poses significant risks, as 66% of global advertising spend is expected to be concentrated there. The diversity of content is at the mercy of the gatekeepers of the big tech companies, who prioritize content that suits their commercial interests, resulting in a homogenous online experience. Reduced competition allows these platforms to dominate the advertising market – limiting options for advertisers and publishers – while the unequal power balance in data sharing between platforms and advertisers hinders effective campaign optimization.

For publishers, it is even worse. The increasing reliance on walled gardens leaves publishers vulnerable to algorithm changes, policies or revenue-sharing terms, potentially jeopardising their independence and sustainability. This is compounded by the fact that walled gardens limit access through innovations in artificial intelligence, further cutting publishers off from consumers.

The big technology companies are disconnected from their brand and public interests

Brands that rely on walled gardens are shooting themselves in the foot, as two-thirds of attention is spent outside of walled gardens. Limited reach, reduced ad placement opportunities, and increased competition within these ecosystems drive up advertising costs and reduce return on investment. Years of audience growth can be wiped out overnight by changes in algorithms or pricing models imposed by walled gardens that hold access to user data ransom for brands that may seek alternatives.

Not only are walled gardens at the heart of privacy concerns, they are also responsible for information filter bubbles that lead to social isolation and content feedback loops that can drift toward extremism.

In the open Internet, brands and publishers can set the conditions

The ace that walled gardens have always had up their sleeve is their vast amount of audience data, but don’t think that’s the only valuable data out there. If brands and publishers take a collaborative approach to their own data assets on the open web, they can gain valuable consumer insights without giving up their independence.

A joint effort toward greater interoperability – achieved through collaboration on standards and protocols – can create pipelines to share authorized data on terms that are mutually beneficial, rather than hoarding it from one side and selling it back to the other. Brands that engage in equal collaboration can ensure they maintain data privacy and security through robust protections over which they have full control.

We know the direction the big tech companies are heading in, and it’s in no one’s interest but their own. But on the open internet, brands have the opportunity to forge their own path while supporting a rich, diverse and innovative ecosystem.

By leveraging the open internet, advertisers can drive growth and success rather than falling into a race to the bottom with other brands trapped in their own closed systems.

Chris Hogg is Chief Revenue Officer at Lotame.