The flurry of changes in the advertising and marketing ecosystem driven by cookie and ID deprecation, rising walled gardens, and privacy-preserving measures, has B2C marketers scrambling for solutions to help them develop data-driven marketing strategies. Amidst all the changes in the ad ecosystem, we are seeing the emergence of a new tool with the promise to help bridge the data divide: data clean rooms. I’m excited to share our latest report, The Truth About Data Clean Rooms — co-written with privacy expert Enza Iannopollo and data governance expert Michele Goetz — which helps B2C marketers understand what data clean rooms do and decide whether to invest in one.
What Is A Data Clean Room?
The term “clean room” might make you think of scientists working in a lab environment, conducting necessary, life-saving experiments. Data clean rooms are a new marketing tool de jour, designed to help marketers connect with partners (usually publishers or big tech providers) in a privacy-safe environment to share sensitive data. Forrester’s formal definition of a data cleanroom is:
A secure, privacy-protecting environment where two or more parties can share sensitive enterprise data, including customer data, for various collaborative marketing, product insights, sales, and other use cases.
Data Clean Rooms Supposedly Address Marketers’ Data Deprecation Concerns
The players and processes that facilitate a clean room environment vary from simple to complicated, depending on a brand’s desired use case. Marketers typically use a clean room for data querying or detailed campaign measurement, connecting their customer transaction data with their advertising partner’s ad impression and click data to measure click-to-conversion activity. Clean room providers also claim that marketers can use their environment like a data management platform (DMP) to build, target, and syndicate audiences, but real-life examples are limited. Overall, our research found that while use cases are still emerging, marketers are excited about the potential benefits of using a clean room.
Clean Room Tools Provide A Range Of Capabilities And Expertise
Many different types of providers offer data clean room tools — from adtech and martech players to data and identity players to data governance and management players. The tools offered by providers range in capabilities and expertise across data connectivity, consumability, and portability. But to qualify as a data clean room, all tools must have security, privacy, and data governance controls; processes to ensure privacy; and a self-governing analysis experience. Because each type of provider has a slightly different focus, it’s imperative that you prioritize your functionality requirements.
The Jury’s Still Out On Clean Rooms
Clean rooms provide tremendous value for publishers, media giants, and closed ecosystems because they help them monetize customer data, build direct relationships with advertiser clients, and reduce the need for third-party ad technologies for media buying. But the value proposition for marketers isn’t quite as strong yet. While we expect the maturity of data clean rooms to increase, we are advising marketers to consider their budgets, use cases, existing partner ecosystem, and expected level of adoption. At the most basic level, you must build an ROI model of clean rooms before making the big investment in yet another tool.
Access our latest report, The Truth About Data Clean Rooms, to learn more about data clean room capabilities, landscape, use cases, and considerations. And please set up a guidance session or an inquiry if you have any data clean room questions!