What are data clean rooms and how do they relate to cookies and marketing?
Doctor Digital Says
Data clean rooms, kind of sounds like the internet is shouting at a teenage version of itself. As privacy regulations and browsers crack down on third-party cookies, marketers are searching for alternative solutions that will help them better understand audiences. Enter identity-driven data clean rooms, which many marketers believe will serve as a more privacy-focused method for understanding and activating customer data.
Data clean rooms allow businesses to manage data effectively, deidentify it, and share it. Let’s explore what a data clean room is and how it works, the benefits you can experience with a data clean room, and how data clean rooms can be used in marketing.
The concept of a data clean room is intended to be a data-focused equivalent to a physical clean room, with the goal of having a pristine environment where technology can't be contaminated by outside influence. Instead of being concerned with germs, a data clean room is concerned with keeping user data isolated and private.
Rather than the data harvested about you by cookies being specific and trackable like it used to be before the legislation changed, in a data clean room it aggregates and anonymises the data to protect your privacy and then provides the cleaned data to advertisers and marketers to target a specific demographic, and for audience measurement.
Most modern data clean rooms work in software as a service (SaaS) models in the cloud as distributed services, enabling content providers and advertisers to collaborate.
The content provider, which holds first-person user information, uploads data to the data clean room. That data comes from different systems, including ecommerce, logging and customer relationship management systems. The user data is encrypted on its route from the provider to the data clean room, where it's anonymized and aggregated into user and demographic groups.
The transmitted data remains encrypted, making it impossible for anyone in the data clean room to access personal information. The protected data can be used by partners and advertisers for data analytics for audience measurement and engagement.
So how can data clean rooms benefit content providers, marketers and advertisers and in turn help you to access marketing information for your sector? There are a number of key benefits to a data clean room:
- Compliance: Access to more data while complying with regulations. With the security and access controls that data clean rooms provide, media companies and publishers can provide detailed reporting, and advertisers can track attribution more effectively.
- Custom audiences: Data clean rooms can be used to build custom audiences that can be used on advertising platforms such as Facebook for advertising, allowing marketers to fine-tune their ad targeting.
- Advanced analysis: Data clean rooms allow organisations to conduct in-depth analysis on combined data sets to gain insights on customer behavior, segmentation, customer lifetime value, and more.
- Security. With user privacy at its foundation, data clean rooms offer a secure location to access and share aggregate user data that's useful for platforms to monetise and for advertisers to target.
Data clean rooms may not be top of mind in your business marketing plan right now, but if you use pay per click (PPC) advertising on many social platforms or search engines, in the near future, this technology will become the go-to service for advertisers to send targeted ads to their audience. It is also going to be the key resource to use managed datasets from data clean rooms to measure campaign performance, gather insights, and make forecasts.
Gartner says that 80% of online advertisers with significant budgets will shift to data clean rooms by 2023. To cater to this tech gorillas have invested in this technology since 2017 and where their money goes is a good indication of the trickle-down to small businesses. Existing services in this domain are Google Ads Data Hub, Amazon Marketing Cloud (AMC), InfoSum, Disney Advertising Sales, and more.
As with so many things in the digital realm, change ramps slowly, then all of a sudden gets exponential. Familiarising yourself with the new trends is the best way to get and stay digital ready.
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