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The Rise of the Data Clean Room

  • Jules McGinlay
  • 4 min read

Data collaboration may well be the key concept for marketers in 2023. As data protection laws proliferate and big tech’s attitude to privacy changes with cookie depreciation well underway, marketers face an ever-evolving challenge in managing data, targeting audiences, activating media and measuring effectiveness. The industry has responded by offering brands a new solution to combine their own first-party data with that of partners; safely, securely and always privacy-first. Rise up, the data clean room. 

The problem is that sharing first-party data also contravenes privacy regulation, and runs against consumer attitudes. That’s why data clean rooms are growing in importance – they offer organisations a way to share, combine and leverage data sets without anyone having access to any other customer PII. For example, CPG companies tend not to have much first-party data; it’s hard to build a long-term opt-in relationship with your customers if you make toothpaste or toilet paper. But by working with a retailer who sells your products, you can use their data to improve your understanding of those customers, the precision of your ad targeting, and your ability to measure its results.

At this point, you could be forgiven for asking where this room is, and what makes it clean. In fact, the term originally comes from R&D and manufacturing, particularly of semi-conductors and pharmaceuticals. There, the idea is to strictly control the working environment in order to reduce potential contaminants to an absolute minimum. The world of data management has taken on the controlled environment part of this concept – all data going into a clean room is encrypted and access to the clean room is strictly limited (for a more detailed explanation, read our Data Clean Rooms: Everything You Need To Know article here).

Three things to think about when you think about clean rooms

So what should advertisers look for when selecting a data clean room? Three major factors are consumer privacy protection, independent measurement and activation, and flexible identity management. 

We’ve touched on the legal importance of safeguarding your customers’ personal information. As marketing becomes ever more dependent on trust between brand and customer, data clean rooms are a way to ensure that trust is maintained, while still giving marketers the power to carry out the analysis and develop the insights they need.

At the same time, your aim as a marketer is to maximise the effectiveness of your marketing spend. That means being certain that the way your data is activated, and your results measured, is totally unbiased and transparent.

Finally, flexible identity management matters because this is not about managing a single partnership, it’s about building an ecosystem. You want to be able to share your data across your organisation as well as outside it. And you want to be able to work with multiple partners across a number of clean rooms, some exclusive and some multi-party. Flexible identity management means you can tailor your solution to match your needs, rather than your supplier’s requirements.

It’s the need to meet all three of these requirements that’s driving the rise of independent data clean rooms (such as LiveRamp’s Safe Haven). Witness Amazon Web Services’ launch of AWS Clean Rooms (in which LiveRamp is a partner) at the end of 2022.

An ecosystem of trust

The fundamental role of a data clean room is to help you hit your marketing goals while meeting the standards consumers expect regarding the way their data is handled, and complying with data protection laws. However, independent solutions, such as LiveRamp’s Safe Haven, also address two other critical factors that are fundamental to a clean room.

One of the attractions of programmatic trading was that it removed all the concerns about transparency and agency commissions inherent in the previous way of buying media. Similarly, an independent clean room removes any concerns around activation and reporting – however unfounded – that might arise from using a clean room operated by a media owner. It also means you can work with as many media partners as you need to in order to build the multi-channel, multi-platform campaigns that modern marketing requires.

Marketing used to inhabit a world of which tracked consumers while assuming they were buying into advertising’s implicit value exchange. It’s now pivoting to one where the value exchange has to be made explicit in order to persuade consumers to share their PII, and where building trust with those consumers is paramount.

As part of that, it’s also vital that marketers can trust anyone who offers them products or services to help extract value from that customer data. Choosing an independent data clean room is part of building that ecosystem of trust.