How to choose the right data clean room

Data clean rooms (DCR) offer a cookie-free alternative to audience targeting for marketers. But a good DCR should be capable of more than just data collaboration.

Vihan Sharma, Global EVP Sales at LiveRamp offers a guide to how to pick the best data clean room for your marketing needs. 

All savvy businesses in 2023 are striving to achieve the thing that gives them the ultimate advantage; gaining that 360 degree view of the customer. To achieve this, organisations must determine the best way to leverage consented, customer data; to unify silos, unlock new insights, and reach new individuals through the customer journey. However, no company can achieve this complete view on its own, therefore making data collaboration a necessary step in improving marketer outcomes and of course the overall customer experience.

Data Clean Rooms (DCRs) are key to the enablement of these valuable collaborations. These are safe and neutral spaces for brands, retailers, publishers and their partners to access and manage data effectively without either party (or parties) gaining access to the other’s customer personal data. In short, DCRs make data collaboration secure and increase the ‘trust index’ between parties to drive better marketing outcomes and a more personalised customer experience. 

However, not all DCRs created are equal. Rather, there are several key features and capabilities of DCRs that companies should look out for when evaluating which solutions will meet their unique business needs.

Unite data sources 

A  clean room should be agnostic and neutral so it can organise, analyse, measure and activate  across the entire advertising ecosystem. This means it should be capable of ingesting and analysing disparate data sources likeCRM and ecommerce data, while making it possible to connect this data in and across cloud environments, to offer configurable privacy between all stakeholders, and use federation to minimise data movement.

Furthermore, with marketers contending with the loss of third-party cookies, certain clean rooms enable the ecosystem to recreate their effect, i.e. an improved personalised customer experience. This is achieved by utilising consumer data in a substantially more accurate, controlled and transparent manner.

Facilitate collaboration

An effective clean room should balance the privacy needs of the supply side (data owners) and the utility needs of the demand side (data consumers). Regardless of which side you’re on, it’s important to have a platform that is flexible enough to meet the needs of all partners. Indeed, if marketers want to reach the level of seamless service that the walled gardens once provided with data insight and analytics, then they need to leverage DCRs which can offer this. In particular, they should seek solutions which don’t severely limit the level of data access and, instead, do it in a way that remains valuable and frictionless while also privacy-compliant. Rather than resembling a one-sided system which the walled gardens increasingly have leant towards, especially for reporting, a good DCR’s ability to readily package and present insights is extremely enticing for partners.

It Can Scale

With many retailers now competing to attract CPG advertisers to their media networks, they need to work with technology partners that can handle the complexity of managing multiple tenants with varying relationships within the DCR environment, and who can also offer easy access to third-party data, and activation of audiences. Without scale, the value proposition of a data clean room can quickly fall apart. In a recent report LiveRamp commissioned, CPGs want size, as a full 99% agreed that investment in a retail media network requires access to a minimum audience of six million shoppers or more. 

It Upholds Strict Privacy-Compliance

A DCR must be rooted in privacy protection. It will remove directly identifiable information and utilise privacy-enhancing technologies (PETs) that meet varying thresholds needed to collaborate with multiple partners.  Controls such as encryption ensure data can’t be used inappropriately, while providing data scientists with the ability to leverage data to better plan, activate, and measure across the ecosystem. It’s critically important to work with a partner who is compliant with regional privacy regulation and leverages consented, people-based identity.. 

It offers more than collaboration

Lastly, a good DCR should be capable of more than just data collaboration. Sophisticated solutions have built-in analytics and measurement applications which automatically and continuously measure the effectiveness of campaigns. This includes the ability to better model and report on results. 

This makes a deterministic approach to identity key to success, as your clean room is only as good as its identity layer. As more brands, retailers and media players tap into this advantage, the DCRs that use people-based identity to remove directly identifiable personal data will become leaders in the marketplace. 

For example, we’ve seen a 40-60% increase in match rates when partners use a deterministic, people-based identity layer to join data across organisations, when compared to matching directly on hashed personal data. Remember that clean rooms are inherently designed to obfuscate data, so if your underlying data is fragmented or poorly matched to begin with, the clean room will only compound the messiness of your results. Ultimately, the quality of what goes in will dictate the quality of what comes out.  

Having a deterministic approach to matching, powered by embedded people-based identity, ensures advertisers can plan, activate and measure marketing spend accurately, drive more personalised customer experiences across channels, and protect consumer privacy. 

As we enter 2023, data collaboration via clean rooms offers the potential to deliver valuable business outcomes, including unlocking new revenue streams, activating strategic partnerships or deepening brand engagement throughout the entire customer journey. 

By Vihan Sharma

Global EVP Sales