You must have noticed how nearly all of the web browsers display a pop-up whenever you visit a website, giving you the chance to accept or reject cookies. This is common in the Safari browser on Apple devices, Mozilla Firefox, and Google Chrome.
While it is a good thing for users to be in control of their data, it has become a nightmare for marketers and advertisers, whose earnings depend on cookies and the advertising income they generate.
Many advertising and marketing methods make use of cookie tracking and measurability to provide accurate insights, but privacy regulations and user consent hinder the effectiveness of those reports. Plus, things are made even more difficult with ad tracking on iOS 14 devices, since the synchronization of data across different networks is inaccurate and inefficient.
This is where data clean rooms come in. This article covers:
What is a Data Clean Room?
A data clean room is a platform or service that allows organizations with data (for example: advertisers and publishers) to match private data (such as user data) between them, without actually sharing any personally identifiable information (PII) with each other.
Data clean rooms are being actively used by major advertising platforms, including Google, Amazon, and Facebook, to provide advertisers with relevant and synchronized data. This way, advertisers can optimize the performance of their ad campaigns.
Data clean rooms implement strict and powerful privacy controls that prohibit companies from uncovering the identity of the users. It is an encrypted and secure location that emphasizes the anonymity and synchronization of first-party data. Marketers obtain user-level granularity without accessing any sensitive information.
Another thing to keep in mind is that data clean rooms can’t be used by advertisers to access or monitor the first-party data of their competitors to gauge how their campaigns perform.
Although marketers do share data with the platform, it is hashed and encrypted as soon as it reaches the clean room. This way, the PII and crucial data can be hidden from view.
To learn more about managing data in the cloud: Data Management Guide
Examples of Usage of a Data Clean Room
As mentioned in the previous section, nearly all major advertising platforms have their own data clean rooms, which they use to provide marketers with matched and validated data. Therefore, there are different types of data clean rooms, including the following:
- Amazon Marketing Cloud
- Facebook Advanced Analytics
- Google Ads Data Hub
These data clean rooms are used by major companies and brands, especially those who have huge advertising budgets and the resources to work across numerous ad platforms. Moreover, these are used by businesses that want to monetize their data to improve any partnerships.
One of the most significant uses of data clean rooms is for efficient sharing of user data by ad publishers, without exposing any sensitive information. The platform that manages data clean rooms anonymizes, aggregates, or does not share PII, so that consumers can use the data without revealing any of the sensitive information.
Another example of data clean room usage is partners working on shared customers. A data clean room allows the partners to effectively share data without exposing the customers sensitive information between the parties. It also enables companies to understand which customers they have in common, so that they can also engage in co-marketing activities.
How a Data Clean Room Accelerates Data Sharing
Data collaboration is a valuable concept in today’s world, and it unlocks a lot of value when brands decide to connect their data. Companies are coming around to the idea of a centralized and connected data repository across various business units, as well as third parties.
Thanks to data clean rooms, organizations can facilitate data collaboration without actually having to share the data.
Data clean rooms provide an efficient and secure platform where brands and marketers can gain access to data characteristics and insights without actually exposing the actual data. Therefore, the process of data sharing and collaboration continues normally. Rather, it is accelerated through the data clean room, and thanks to the strict privacy and security controls, brands don’t have to worry about exposed data.
Over the years, not only has data evolved, but also the various types of information that advertisers can derive from it. Moreover, due to the increased consensus regarding data privacy, parties will continue to share more data with each other.
In such an environment, data clean rooms are the only way for different stakeholders to collaborate without having to give anything away or expose the personally identifiable information of their customers.
Challenges in Setting Up a Data Clean Room
Let’s have a look at the challenges in setting up a data clean room.
Requirement for Collaboration
One of the biggest obstacles setting up the data clean room is that it requires two or more parties to be on the same page and develop a consensus before they can start working together. As mentioned above, it can often be difficult for brands and advertisers to trust each other and decide to share data on the platform.
Engineering Teams Have to Work Together
Another hurdle is the lack of coordination between engineering teams of both organizations that are going to participate in a data clean room. Since each organization has different methods for data privacy, security, and governance, it can be difficult for both parties to match their data effectively.
Changing Compliance and Security Requirements
Lastly, there have been several changes in the security and compliance requirements, which can make it difficult for organizations that have to share their data in a clean room. For this purpose, both organizations have to involve their data scientists and analysts, so that they can help ensure compliance and smooth collaboration.
Clean rooms are important in enhancing consumer or privacy rights while also ensuring that marketers can provide their clients with a strong return on their advertising investment. Best of all, they are the perfect solution to a cookie-free environment, so that both users and brands can get what they need.
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