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Data Clean Rooms: A Complete Guide

  • Vihan Sharma
  • 7 min read

What is a Data Clean Room?

In scientific research or manufacturing, a clean room is a strictly controlled environment that reduces the level of contaminants which can put sensitive work at risk. A data clean room is very similar, and the use of these digital spaces is now growing in popularity owing to the loss of cookies and other device identifiers.

So how do we define a data clean room? Simply put, they are safe and neutral spaces for data collaboration and partnerships to exist without either party (or parties) having access to the other’s customer PII data. A data clean room also provides privacy controls such as encryption, so data can’t be used inappropriately, while providing data scientists with the ability to leverage data to better plan, activate, and measure across the ecosystem.

One of the key benefits is that the data never leaves the data owner’s control, creating a better balance between privacy and utility. While many use cases are between two enterprises, data clean rooms can also be used across the same enterprise for the same reasons. Think of clean rooms as a worthwhile addition to the data governance toolbox.

Why data clean rooms matter in a cookieless world

You might be asking yourself what cookies and other device identifiers have to do with data clean rooms. The answer is that without ways for brands to reach their audiences via these antiquated means, using first- and second-party data collaboration in a safe and privacy-conscious way is less of an option and more of a necessity. Leaning on this method to maintain addressability allows advertisers to find a more sustainable solution that puts consumers first.

Data clean rooms aren’t new. Google and Facebook, for example, have had them for several years and have proven how effective they are at improving advertising performance through data sharing between an advertiser and their platforms. This approach helps advertisers check for inconsistencies to address issues such as frequency capping and audience suppression, preventing over-serving ads to the same people or households. With the proliferation of channels, measurement and attribution become even more critical to the optimisation of advertising spend.

Neutral, third-party data clean rooms

More data clean rooms are emerging. In addition to the ones managed by the platforms, there are also neutral third-party data clean rooms, like LiveRamp’s Safe Haven, that in addition to organising, analysing, and measuring data, can also enable activation across the entire advertising ecosystem to better plan, activate, and measure your marketing spend. Safe Haven brings in LiveRamp’s unparalleled identity solution, hundreds of third-party integrations, and one of the largest networks of activation partners.

Having a safe place for your data scientists to experiment is great, especially if it’s where the data already lives. However, data clean rooms are only as valuable as the value they produce. Science is all about testing and providing proof points. Data science should improve efficiency, power the discovery of new audiences, and increase accurate measurement, and an enhanced, neutral environment is better suited to do so, especially when working across multiple platforms and channels.

Data clean rooms for better business outcomes

Today, data clean rooms can provide a safe and secure environment to unite disparate data sets more easily and uncover more business insights than ever before. While data privacy concerns are a solid reason to use a clean room, there are other benefits that will help your businesses achieve more from your investment in the long term. That is, if you’re choosing the right type of clean room. After all, the ultimate goal is to create value for your business.

To achieve better business outcomes, your data clean room must be rooted in privacy protection, but also provide the tools that deliver results for marketers. An enhanced clean room with embedded people-based identity, measurement, and insight applications that is also connected with leading activation channels can help you build deeper partnerships and network your sphere of influence.

What to look for in an enhanced data clean room

So how can you find a data clean room that not only delivers these outcomes, but also better customer experiences? Here are three things to consider when selecting enhanced data clean room technology:

Must be deterministic

Enhanced privacy capabilities are often the first reason to gravitate toward a data clean room. Privacy enhancing technologies (PETs) enable companies to analyse data without it having to be exposed. However, the key to success for data clean rooms is to provide privacy enhancing technologies which are modular so customers can leverage the required level of privacy thresholds when collaborating with their partners. In addition, having a deterministic approach to identity and matching is also key to ensuring better collaboration. Without deterministic IDs and matching, the outcomes of collaboration can lead to inaccurate outcomes.

In probabilistic matching, a profile of a person and their neighbour may be close enough that both receive the same advertisements. However, deterministic matching within an enhanced clean room environment can provide more exact targeting. Brands can see minute differences between the person and their neighbour, enabling one to be suppressed from targeting. This not only saves the brand time and money, but also provides a better customer experience.

An enhanced data clean room with deterministic matching, powered by people-based identity, also ensures you are able to accurately measure the impact of your marketing campaigns.

Leveraging an interoperable identity framework like LiveRamp’s RampID can not only help you measure effectiveness more accurately but also can help drive personalised experiences across omnichannel touch points.

When it comes to measurement, the right enhanced data clean room provides similar capabilities as walled gardens, such as:

  • Matching impression data to transactions to deliver conversion and sales lift reporting
  • Enabling multiple partnerships for multi-touch attribution
  • Incorporating TV partners to better plan omnichannel campaigns

Answers the right questions

Enhanced or not, a data clean room would be moot if it didn’t enable easier data collaboration within the privacy-conscious space. Once the data is accessible, clean rooms should also provide additional capabilities to make collaboration easier and simpler.

At LiveRamp, we believe in helping brands collaborate better by:

  1. Helping build and reconcile their own first-party data sets to support first-party graphs
  2. Ensuring brands are bringing data sets into a unified taxonomy to support easy collaboration
  3. Pre-building queries across data sets to answer key business outcome questions without heavy lift from both parties
  4. Embedding analytics dashboards to ensure granular data can be easily leveraged to create better audiences at scale
  5. Embedding measurement protocols to automatically and continuously measure the effectiveness of collaborative campaigns

Must enhance personalisation

Data is the key to great customer experiences, and an enhanced data clean room helps unlock those experiences.

Let’s use frequent visits to your local coffee shop as an example. By the end of the first or second week of daily visits, you would likely expect a more personalised experience from your regular barista, given they would know your specific preference for coffee. If nothing else, you would hope to be recognised as an individual vs. a random customer. You might even get a pastry on the house as a thank you for being a loyal customer.

Another example would be retailers with transaction data that tells you what customers are buying, how much they are buying, and how often. That retailer could build audiences that are attractive for CPGs who may be first-party data poor. This is a win-win scenario for both parties, since the brand would achieve better targeting, reach the right audiences, and reduce their advertising waste. Meanwhile, the retailer (in this case, acting as a media publisher) could improve yields and deliver better customer experiences.

Data, when leveraged properly in a privacy-safe manner, can do more to enhance the customer experience, ensuring that brands can recognise these preferences and deepen relationships with existing customers for increased brand loyalty and awareness. An enhanced clean room delivers on the ability to create exceptional customer experiences by helping activate these insights across marketing applications.

Enhanced data clean rooms are more than just for retailers

Creating better customer experiences is something every public-facing enterprise needs to consider. For example, when a major European utilities organisation wanted to enhance their customers’ experiences, it turned to an enhanced data clean room solution. Leveraging its first-party data, the company wanted to suppress current customers from its omnichannel campaigns.

By utilising LiveRamp’s data collaboration environment as an enhanced clean room, the company was able to suppress current customers from their latest campaign, saving marketing dollars that could then be reinvested back into media channels to reach a deterministically matched audience for enhanced results. Suppressing audiences is one major benefit and use case for an enhanced data clean room.

No matter which type of data clean room you choose for your data collaboration needs, it’s fundamental to ensure that it will help you deliver the best business outcomes without sacrificing the deep customer relationships you seek to grow and solidify as you develop a better understanding of your customers.

If you want to know more about data clean rooms and LiveRamp’s Safe Haven, reach out to info@liveramp.co.uk.