What is a data clean room?

A data clean room is a secure technology solution that allows various stakeholders/parties to share data without sharing certain parameters like personal information. For example, parties might use a clean room to share campaign performance data like reach and frequency while holding back first-party individual customer data. A data clean room provides a protected environment where personal data is anonymous, allowing consumer privacy to be a priority. Brands can create data clean rooms of their own or leverage available software.

How do data clean rooms work?

First-party data is first run through a formula that produces the results for transmission and then loaded from a customer relationship management system into a data clean room. The personally identifiable information sent to the data clean room is then secured and encrypted, which protects the data from unauthorized access. Brands have full access to anonymized data that can be shared with measurement partners like Facebook and Google.

Advantages of data clean rooms

Data clean rooms offer a variety of benefits to advertisers, media companies, and retailers. With the widespread privacy concerns from customers on the internet, businesses can be negatively affected by the lack of personal information; personal information allows businesses to create the best personalized online experience for their customers. This secure technology solution offers a way for data owners to provide privacy-first data offerings with the right balance of access and advantage to their partners. This solution is the vehicle for privacy-safe data collaboration and advanced insights. 

The three most significant benefits of data clean rooms are accessibility to more data, the ability to build custom audiences, and advanced data analysis:

  1. Privacy-preserving techniques ensure that no personally identifiable data source is exposed. Clean rooms are built to adapt to new privacy laws while allowing companies to access and securely share data with key partners.
  2. Data clean rooms allow companies to better understand their audience through an interconnected system where moving data can be protected. Consumer data can not be fully unified in one platform, and data clean rooms enable safe, secure data analytics as it is shared.
  3. Organizations can conduct in-depth analysis on combined data sets to gain insights into customer behavior, segmentation, customer lifetime value, and more. 

Disadvantages of data clean rooms

Data clean rooms are relatively expensive, and data clean room alternatives have logistical and political hurdles that can make it difficult for all parties involved. Walled gardens do not give up enough data to advertisers, given how much value they derive from controlling data. Many data clean rooms only work for a specific platform, meaning advertisers must manually combine results from different data clean rooms. People can end up emailing whole data sets or creating shared folders to combine results — exposing a possible privacy risk manually.

Types of data clean rooms

Walled garden clean rooms 

Walled garden clean rooms are closed platforms that enable privacy-safe analysis within a single environment. They are the most common data clean rooms used by well-known brands. These data clean rooms support first-party data set enrichment with their event-level data. First-party data set enrichment combines various data collection methods and sources into more in-depth representations. 

Neutral clean room vendors 

Neutral clean room vendors are data clean room software solutions developed for media companies and brands. These data clean rooms offer more flexibility, collaboration, and a more unified view and can be easier to use without a data scientist. 

Clean rooms within other platforms/ecosystems

Some businesses that operate in different industries from those previously mentioned, like cloud data storage or specific marketing applications, have their own data clean room solutions. These providers offer flexibility and governance controls but are technical solutions. These clean rooms typically have limited access to partner data outside their ecosystem and no connections to walled garden data clean rooms. 

Why do data clean rooms matter in a cookieless world? 

Quantcast is helping businesses move towards a cookieless world. Cookies are becoming an outdated form of reaching audiences as data privacy laws make data less accessible and more anonymous. This creates challenges for advertisers needing to use first- and second-party data collaboration in a safe and privacy-conscious way. As more consumers become anonymized, fewer addressable users mean facing the challenge of fewer data points mapping media to create actionable advertising plans. Fewer data points reduce brands’ ability to act quickly on insights for a personalized and enjoyable customer experience. For several years, data clean rooms have proven to improve advertising performance through data sharing between advertisers and their platforms. This approach helps advertisers check for inconsistencies to prevent over-serving ads to the same people or households. Data clean rooms are sustainable solutions where advertisers can put consumers first using data collaboration in a safe and privacy-conscious way.