Is ‘Data Clean Room’ the 2023 marketing technology buzzword of the year? If not, it’s close. An enormous amount of information and commentary, of dubious value, has been created. In the following article, we attempt to drive clarity into what questions Marketing Executives should start with regarding Data Clean Rooms (DCRs).
The orientation of most Data Clean Room discussions today is wrong: it’s too often about the technology itself rather than the (potential) value that’s being created. However, your customer data should be protected. If your organization is not using a DCR it should consider one. Yes, there are many potential use cases. Ultimately, however, DCR technology is just one piece of the puzzle when it comes to data driven marketing. In a crowded technology space, there needs to be clarity on where and how business value is being created before investment decisions are made.
Where is the value being created?
In simplest terms, DCRs enable data collaboration in a privacy safe and secure manner. This capability is much needed in an industry with a history of skirting ethical lines when leveraging customer data. That said, the actual definition of “data collaboration” is entirely up to the multiple parties involved, inclusive of consumers – who have expanding protections relating to data usage. For most data driven marketers, data collaboration is already standard operating procedure with or without a clean room.
Therein lies the root of complication when it comes to understanding what DCRs can do for advertisers. It’s a big “it-depends”. For example:
- Advertisers may not realize their teams or agencies are already using clean rooms
- Increased data protections and security could potentially improve existing use case or workflows
- There may be novel use cases previously untapped, reliant on new methods of data collaboration or data products available via clean rooms
- Other use cases may not be possible based on the availability of data in clean rooms run by strategic partners (e.g. on Retail Media Network may make available transactional data for closed loop reporting while another may not)
If you are a marketing executive, here are a few key questions to start asking:
With your existing strategic marketing partners, are you using all available tools to enable data collaboration?
There is a chance you’re already using clean rooms! Walled garden DCRs started to roll out several years ago (see Google ADH or Amazon AMC). There’s a chance that your agencies or measurement teams have tapped into these data sources and are already using them. If not, consider:
- In which walled garden do you spend the most?
- Are your analytics teams and agencies getting the most use from its DCR capabilities?
- Do you understand what data are available and the use cases that can be enabled?
Retail Media Networks are another incredible source of value when considering data collaborations. Transactional data offers opportunities for both strategic insights and for closed-loop reporting. Consider (especially as a CPG):
- In which Retail Media Networks do you spend the most, and do they have a DCR?
- How are you leveraging transactional data available in Retail Media Networks?
- Where do you have closed loop measurement? Is it insulated from regulatory compliance?
Consider other strategic partners that own highly valuable sources of data which may be mutually beneficial to leverage. Ask questions such as:
- Are you aware of any untapped data sources that you could be accessing to improve your marketing initiatives?
- Are your strategic partners open to jointly defining use cases and data monetization opportunities?
Even if the use case isn’t turn-key, setting up a clean room for data collaboration is easier than ever. Some of the most popular cloud data providers – such as AWS, Google Cloud Platform, and Snowflake all provide the necessary infrastructure.
It’s important to emphasize that there are significant differences in consistency and availability of data between DCRs. A Clean Room’s existence does not prove its value, and is dependent on the data assets available to share. A high security vault doesn’t provide much value if there’s no money in it. Ensure that your teams are doing the due diligence to understand the feasibility of defined use cases.
Does your team have the skills and expertise to take advantage of and operationalize DCRs?
The technology isn’t the hardest part. It never is.
At its core, using a DCR is a technical exercise. Marketing executives require technical resources that are hands-on and currently in-demand. Ultimately, the ability to execute a use case is dependent on the teams able to execute it. Often the people who get the most use out of these tools (data scientists, marketing planners, ad-ops, etc.) are those that have the least amount of time. Giving the “hands on keys” employees the space, time, and training required has a greater payoff than the choice of one DCR technology vs another.
Luckily, several companies are making DCRs easier to use. Habu allows standardized and saved queries to answer business “questions” – with a light layer of data visualization – while still bringing the best in terms of data privacy and protection. While not diminishing the need for technical resources, Habu’s embedded questions makes it easier for non-technical (i.e. non-SQL) marketers to embed usage of DCRs into their day-to-day work.
LiveRamp SafeHaven is another strong DCR that provides a neutral platform for two or more partners to collaborate. The platform is also useful in that it leverages LiveRamp’s legacy as an onboarder and strong identity spine to more easily push anonymized customer segments to downstream activation partners.
In conclusion
At Transparent Partners, we’re bullish on DCRs. We think that Data Clean Rooms could underpin most 1P data activations in the future. With diminishing cookies to leverage for ad-targeting and the broad adoption of CDPs and other 1P data management tools, the DCR will be an essential tool for targeting your customers without directly exposing or sharing their data with other companies. We also believe that clean rooms will become the defacto approach to monetizing data and supporting customer level measurement safely and securely.
My bet is that companies able to build automated workflows through DCRs will build a competitive advantage in the next 2-3 years. This automation removes the human element and allows any use case to scale– all the while protected from shifting privacy regulation. The ultimate goal of using DCRs is to enable better marketing without compromising privacy and data security. Let Marketers do Marketing. That’s their imperative, and they’re the best at it. It’s important to remember this point, and to focus on using the technology to achieve larger strategic goals and enable use cases that Marketers care most about.
To learn more around Data Clean Rooms, reach out today.
