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Why Marketers Are Falling In Love With Data Clean Rooms

  • Graham Tricker
  • 4 min read

If you’re not familiar with chemical or biological research, or with high-quality manufacturing, the notion of a data clean room is pretty baffling. Even if you know how semiconductors are made, the link between that and a virtual space where companies share data can still be hard to comprehend.

In fact, what connects clean rooms of all types is simple; they’re protected environments. Access to the room – physical or virtual – is tightly controlled. In research and manufacturing, this is to keep impurities and contaminants out. In our world of marketing, a data clean room allows businesses to access data without anyone being able to see anyone else’s contribution. That way everyone collaborating with data is able to respect their customers’ privacy and protect their valuable business asset while still enriching their knowledge of those customers to improve their marketing.

Data Clean Rooms are indeed a critical element for any marketer who is looking to pursue a data-driven strategy.

Data collaboration

Clean room technology is what makes data collaboration possible. In turn, collaboration can deliver benefits in three areas:

Insight. By bringing together data from multiple sources, marketers can build a more complete understanding of their customers. That means better segmentation, more accurate predictions and more precise lookalike audiences. This is particularly important right now, as Google’s planned switch-off of third-party cookies approaches.

Activation. Clean rooms allow publishers to match their audiences with an advertisers’ customer data to provide better targeting of campaigns. An example could be a subscription TV provider like Sky matching its subscribers with an auto brands customer data to ensure the right car model is advertised. 

Measurement. Deeper understanding of your customers’ engagement with walled gardens allows more accurate attribution of the customer journey. 

The first data clean rooms allowed the ‘walled gardens’ of online advertising (Google, Facebook etc) to collaborate with their advertisers. The technology meant advertisers could enrich, target and measure the campaigns they ran, without the walled gardens having to release their customer data. This required advertisers to replicate its analysis within each walled garden clean room. However the new generation of clean rooms, such as Habu, uniquely allow advertisers to build analysis in one clean room and deploy it across many walled garden clean rooms such as Google, Meta and Amazon.

Increasingly clean rooms are being deployed to enable peer-to-peer collaboration. The most common example is the partnership between CPG brands and retailers. These brands know very little about who buys their products, so they’re keen to partner with the retailers that do. At the same time, retailers are waking up to the value of this data to their CPG brand partners. It’s a win-win (and also the basis of the current retail media boom). These clean room solutions benefit from industry specific capabilities to better connect with retailer datasets, and provide simple, easy-to-use tools for retail media operators and CPG marketing teams. Examples of this would be LiveRamp’s Safe Haven Platform, which powers the majority of retail media offerings in the UK including Boots and Co-op. 

And it’s not only the retail sector that’s benefiting. Non-competing businesses in any sector should examine the potential benefits of data collaboration. Think an airline and a hotel chain, for example.

What are the features of clean rooms?

Any data clean room must protect the privacy of your data. It should also provide tools for both data scientists and business users i.e. marketers. Beyond that, anyone thinking of investing in a data clean room should also look for:

Identity Infrastructure: A privacy enhanced technology for connecting customer data, ensuring each party has its own unique customer identifiers, allowing customer data to be safely shared between collaborating businesses and media platforms. 

Flexibility and interoperability. For maximum speed and efficiency, your clean room should be usable by all the partners, and be agnostic of each party’s technology stack i.e. be interoperable between Cloud Platforms and data infrastructure. 

Respect for the principle of data minimisation. Only allowing users access to the data they need for the specific task they’re working on as well as the new paradigm of taking the code to the data, rather than data to the code. What this means is businesses can collaborate on data without the data leaving their Cloud or Data Warehouse. 

Pushing marketing in a new direction

The rapid adoption of clean rooms is being driven by two main factors. The first is Google’s withdrawal of support of third-party cookies in Chrome this year. This will spell the end of the technology that has underpinned 25 years of digital marketing. The second is the growing concern among consumers and legislators about data privacy.

The result is that businesses need a new way to build their understanding of their customers. The solution is to combine first-party, second-party and third-party data from a variety of sources. And I’ll be looking at this in more detail in my next post.