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Do you Fear the Rising Walled Garden of the FAANG Companies?

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The investment world created the FAANG label to refer to the most powerful and innovative technology-driven companies of our era – Facebook, Apple, Amazon, Netflix and Google. These companies are undeniable leaders who are changing the way people get their information, content, entertainment, social connections and products.

 

The FAANG companies have thrived by pursuing a Walled Garden strategy to monetize their audiences through advertising, content subscriptions and data. Their game plan looks like this:

  1. Gain access to consumers via devices and online platforms;
  2. Create and/or deliver quality content individuals want; and
  3. Use data and AI to predict and deliver exactly what consumers want when they want it.

Think of the Walled Garden as a place where customers wander appreciatively, consuming the content and leveraging the utility (ease of acquiring, connecting, or getting things done) within a branded context.

 

Facebook’s Walled Garden has some obvious trust weeds because of public data privacy issues. Apple’s Garden feels safe. Amazon’s Garden is amazingly easy to walk through and pluck. Netflix’s Garden feels fun and focused. Google’s Garden is vast and hard to define. It is so pervasive and data-driven with access to Gmail, voice and mobile tracking that it is becoming scary to many.

 

Recently, legacy telecommunications/cable companies, including AT&T, Verizon and Comcast, have been trying to compete with the FAANG companies by acquiring the missing assets to complete their own Walled Gardens. AT&T and Verizon have legacy distribution businesses providing the mobile, telecom, satellite pipes for consumers and businesses to access information. They have been working hard to also own content assets. But their ultimate goal is to own and monetize a critical relationship with the consumer.

 

Let’s take a closer look at AT&T’s strategy. First, the company purchased Yahoo’s and AOL’s online platforms and content assets for $9 billion. Then, this summer, it reached an $85 billion deal to acquire Time Warner’s content and pipes, and $2 billion for AppNexus to build a publisher supply-side and an agency-client demand-side digital advertising platform. So, AT&T now has:

  1. Access assets with its internet and mobile networks
  2. Content assets with Time Warner; and
  3. Data/AI assets that are leveraging digital search and advertising platforms of AOL, Yahoo, and AppNexus.

 

It seems as though these Walled Gardens are growing taller and taller. But you don’t have to be a mega corporation to execute on the Walled Garden playbook. Every brand has the opportunity to execute an Access-Content-Data/AI strategy to deliver customer satisfaction and grow their businesses. In fact, every business, regardless of size, can execute on this concept leveraging today’s platforms and technology.

Stay tuned for next week’s Insight where we’ll break this down into Access, Content, and Data as we share what every company must learn and apply to compete in a data-driven world.

 

Marketing Agency Blog Post Author of Do you Fear the Rising Walled Garden of the FAANG Companies?

September 12, 2018
Written by Tom Sullivan

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