Walled garden: Definition, purpose, and examples

A walled garden, also known as a closed ecosystem, is a term used in both the marketing and tech worlds and refers to a closed environment that restricts access to systems, networks, and applications.

Walled gardens are commonly used to enhance cybersecurity by isolating users from external threats. For example, a walled garden can take the form of an enclosed platform created by a properly configured firewall and other network devices.

Other applications of walled gardens include increasing user engagement and ad revenue. Closed ecosystems often attract customers but limit them in terms of using other platforms to make them more engaged.

Different platforms use walled gardens for various purposes – from enhancing cybersecurity to increasing user engagement and, of course, ad revenue, a major source of income for platforms and websites that are free to use.

Hardware and software under full control

Wall gardens enhance security by restricting users from downloading malware and accessing external – potentially malicious – content. For example, Apple’s business model is based precisely on the concept of walled gardens. Apple’s hardware and software are tightly controlled, and the company has a strict policy regarding third parties. Such approaches allow the company to pride itself on the security of its systems and devices.

Walled gardens and advertisers

In terms of digital advertising and sales, walled gardens are one of the most popular and lucrative business models. They often provide users with everything they want from their digital experience while limiting them from using external platforms. Social media is probably the most common example of a walled garden on the internet.

Social media networks do everything they can to attract users and make them stay on their platforms. They fight for users’ time and attention, preventing them from leaving the platform and moving on to anything else. Why? Because time spent on the platform equals more viewed ads and more possibilities to purchase promoted products.

That’s why walled gardens often do everything in the app. Let’s say you saw a link to an article on social media and opened it. There’s a good chance the link opened in the app, not your phone’s mobile browser. The company wants you to stay in the app after reading the article. As we said before – engagement equals revenue.

Exclusive content

Some walled gardens exist to create a sense of exclusivity. Game companies do this well: developers create and sell games and consoles, so players can’t buy and play these games using third-party devices. Games and consoles go hand in hand and create a closed environment.

The most common examples of walled gardens include:

• Social media platforms. Social media platforms, such as Facebook, X (formerly Twitter), Instagram, and Pinterest, profit mainly from ad revenue, so they want users to be as engaged as possible. These platforms collect tons of data about users with third-party cookies, trackers, and other techniques. It allows them to target users with even more precise ads.
• Ad systems. Google is a prime example of a walled garden. It owns an advertising platform – Google Ads – that matches users with targeted ads. However, the system is tightly controlled by the company. It also provides aggregated metrics for advertisers, which prevents data leakage but also stops them from exporting information. It’s worth knowing that, in this case, the restriction does not mean safety – Google is notorious for allowing malicious advertising into its system.
• Hardware and software manufacturers (Apple). Apple is the best-known company developing its hardware and software in a closed ecosystem model. Apple devices are designed to be compatible with each other. On the other hand, the California-based company is strict when it comes to third-party software and hardware. It has received a lot of criticism for withholding manuals and parts and generally making it difficult to repair devices.
• Games and consoles. Nintendo produces video games and consoles that work closely together. Although some non-Nintendo games can be played on Switch, Switch games cannot be easily emulated on other consoles. Most Nintendo Switch games are not released on other platforms. The same applies to other platforms and marketplaces, such as PlayStation and Xbox.
• Collaboration platforms. MS Teams and Slack are closed systems incompatible with other messaging and collaboration platforms.
• Publishing companies. Many news sites attract users with free articles and encourage them to purchase paid subscriptions to access exclusive content.

The term “walled garden” was coined by John Malone, founder of Telecommunications Inc. (later purchased by AT&T). The early American telecommunication industry held the first examples of walled gardens. Operators maintained significant control over their services and networks. Bell System, for example, manufactured its hardware to use with its network. The hardware was not purchased by the users but leased.

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  Increased security. With closed and controlled systems, manufacturers can maintain control. Companies like Apple can ensure their customers’ data security by limiting third-parties’ access to it.
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  With closed and controlled systems, manufacturers can maintain control. Companies like Apple can ensure their customers’ data security by limiting third-parties’ access to it.
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  Companies like Apple can ensure their customers’ data security by limiting third-parties’ access to it.
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  Monetization opportunities. By pulling users into a controlled environment, companies profit more easily from advertising revenue, promoted product sales, and paid subscriptions.
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  Cross-platform tracking. Google, Facebook, and other advertising giants profit from users using multiple platforms to access the same websites. With their walled gardens, they track users across devices and hit them with targeted campaigns.
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  Controlled user experience. Wall gardens decide what user experience they want to provide. Their closed systems allow for significant control because customers only see what the wall gardens enable them to see.

Not everyone likes the concept of a walled garden, with some even describing it as predatory toward customers. Terms such as “walled desert” and “walled prison” are also used to describe these closed ecosystems. Here are the reasons:

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  Loss of competitive traffic. Users attracted to walled gardens are likely to stay and reduce their engagement on competing platforms. Smaller sites that base their income on monthly ad revenue may struggle to stay afloat, while the most prominent names attract all the users.
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  Privacy concerns. Not all walled gardens are like Apple and its ecosystem. Some (most) do not protect user data and even actively sell it to third parties. The most well-known example is social media platforms.
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  Monopolistic practices. Walled garden companies operate in a way that makes it increasingly difficult to leave them. Apple devices, for instance, are known for their excellent cross-compatibility but aren’t as good with other systems. That’s why most Apple customers end up owning multiple products of the same brand. Apple even encourages entire friend groups and families to invest in its mobile devices because many collaboration and communication applications are unavailable on other systems or are limited.

Anyone can create a walled garden system, just as they can create their own website or app. However, it is important to know that walled gardens are complex, layered systems. Creating a successful walled garden requires budget and expertise. There’s a reason why the most well-known walled gardens come from giant companies such as Meta and Google. A major tech company like that simply has the resources to design and maintain its enclosed environments.