Data clean rooms: can they support the new ad infrastructure?

Jürgen Galler, CEO and Co-founder of 1plusX, looks at how marketers might make best use of their first-party data in a cookie-less, privacy-centric world…

We’re still talking about third-party cookies and identity for many reasons. Dismantling the industry’s largest data sharing network is a long process, making gradual impacts as each bolt is removed. For instance, there have been recent concerns about Apple’s App Tracking Transparency (ATT) framework, whose effects have only been revealed months later. 

For all industry players, this is yet further evidence that reconfiguring the foundations of digital advertising is vital to avoid being caught unprepared when predicted issues occur.  

One particular focus should be ensuring that methods such as first-party data strategies can keep engines running while finding new ways to allow for safe data flow between the buy and sell sides. While looking for new mechanisms, the importance of maintaining user privacy and security is driving more consideration of safe environments, including data clean rooms. 

So the question is: do they have what it takes to support the new ad infrastructure?

Rise of the independents 

Data clean rooms have been around for some time, widely used by walled gardens to share information in a way that meets verification and privacy requirements. Their core purpose hasn’t changed much: they mostly enable advertisers to load first-party data into shared systems and use it to run essential activities without relying on third-party cookies, from audience identification to targeting and measurement. Yet flexibility has evolved significantly. 

Of course, offerings from the likes of Google, Facebook and Amazon allow them to maintain their power. Holding aggregated data about their huge user groups, platform-specific solutions can deliver vast matching and performance data that earns them consistently high appeal. Alongside their extensive reach, proving the value of brand investment in their channels also plays a major part in maintaining a sizeable grip on digital ad spend. The downside is that insights can only be activated on the walled gardens’ owned channels, meaning cross-channel marketing isn’t an option.

But growing interest in making more of owned assets is giving rise to a new crop of industry- specific clean rooms. As well as the standard benefits – including data matching and compliant data sharing – these solutions focus on the user and customer-level data bringing the extra advantages of audience insight and process automation. In addition, working on the basis of shared participation, each party brings their data to the table and gains insights in return. Operating independently, they are also not limited by a single ecosystem and therefore can work across platforms, verticals and media. 

The role of intermediaries 

When it comes to sharing data, concerns around its protection and governance are heightened. While apprehension around walled gardens has centred on their tendency to function as a one-way street, advances in areas such as decentralisation are helping to demonstrate that opting for open solutions doesn’t necessarily mean swapping one black box for another or putting data at risk. 

Leveraging neutral collaborative tools that facilitate data use without transferring insight to centralised locations means all parties can stay in the driving seat, especially with providers that allow them to set access permissions for select partners.

In practical terms, this is paving the way for use cases equal to cookie-based activations, such as overlaying publisher first-party data and harnessing ID solutions to achieve highly refined segmentation and targeting. Moreover, better assurance that data won’t be moved or mishandled is encouraging broader implementation across channels, including connected TV (CTV). Last year, for example, Channel 4’s Brand4Match initiative tapped independently powered clean room tech to facilitate precise advertising at scale, quickly followed by ITV. 

Final verdict: full steam ahead 

Clean rooms won’t fix all third-party cookie problems, but they do supply a critical component for the increasingly privacy-oriented ecosystem. Ongoing industry success depends on fluid access to audience data – and amid tougher regulations and unravelling of identifiers, clean rooms will make it possible for first-party data to become the new fuel of online advertising, without compromising security. 

Obviously, it almost goes without saying that having enough data is paramount for media companies and advertisers to achieve the best match rates and results. To get the best returns from clean rooms, both must therefore push ahead with efforts to increase their individual first-party pools and take advantage of rising extension opportunities, such as applying artificially intelligent (AI) lookalike modelling to find desirable new users within publishing datasets.

Today, it is clear that no corner of the industry can afford to take a step back. Just because we haven’t felt the full weight of cookie loss doesn’t mean it’s safe to assume anticipated disruption was worse than the reality. Preparing for the coming transformation is by far the most sensible choice, making it crucial to get working on re-engineering industry systems — with clean rooms playing a key role.