Your complete guide to data clean rooms

Amidst all the technical jargon that gets thrown around in Ad Ops, here is yet another that may have you scratching your head. If you’re advertising on multiple ad channels (more than just Google and Facebook ads), you’ve probably heard the term “data clean room” tossed in here and there.

Data clean rooms are where walled gardens (or individual partners, i.e. publishers and advertisers) store collected data for marketers to analyze. They don’t use customer-level data, so privacy compliance is still upheld.

Here’s a quick refresher on walled gardens.

In this guide, we’ll go over what data clean rooms are, the different types of rooms that can be used, who can use them, and why publishers should care.

What is a data clean room?

When you spend your advertising budget on Google or Facebook ads, do you know exactly what you’re buying? Are you able to measure how much of your advertising reach is duplicated across these different channels? That’s where a data clean room comes in.

A data clean room is an encrypted, secure location where first-party data is anonymized, layered, and matched with the aggregated data from the clean room provider. This is to help marketers better understand their data. For instance, a data clean room could help you identify any wasted ad spend and target the same audience across different ad channels.

One important item to note is that these rooms cannot be used as a way to look at your competitor’s first-party data to see how you measure up. Although marketers may upload their first-party data (i.e. from Salesforce or Shopify), it’s hashed and encrypted when in the clean room. No Personally Identifiable Information (PII) is available for anyone to view.

Are there different types of data clean rooms?

Yes, there’s more than one type.

Media clean rooms include the following walled gardens:

These are mainly used by marketers who already spend a lot of their advertising budget on these platforms. However, marketers don’t just work within walled gardens. With a bit of help, organizations can create their own data clean rooms.

Partner data clean rooms can be used between two partners (like a publisher and an advertiser) to safely share their data. Each partner can apply strict controls on how much of their data is shared.

Who exactly uses them?

Major brands (like Proctor and Gamble) with access to massive advertising budgets across various ad platforms aren’t the only ones who use these rooms. Anyone interested in monetizing their data to improve current and new partnerships can benefit as well.

Any agencies and advertisers that spend within the walled gardens can still benefit by using their own individual clean rooms.

When you use a media data clean room, you cannot access data across various ad platforms. Although they may individually provide more data than their in-platform counterpart, you’re only looking at data used within that platform. So for instance, don’t expect to see Amazon analytics in the Google Ads Data Hub.

Beyond what the walled gardens offer, organizations like Unilever are building out omni-channel data clean rooms. Similar to what we’ve covered before, no PII data will be stored. They would still be working with shared, anonymized data. But these platforms are attempting to combine the data from multiple walled gardens into one encrypted location.

This would allow marketers to see all attributed data touch points across the user journey.

Why should publishers care?

Now that we know what it is, why should we care about it? In one word, measurement.

With third-party cookies being deprecated, advertisers and publishers alike are in a race to improve their first-party data and their overall approach to targeting, measuring, and optimizing that data. Partner data clean rooms are a great way to collaborate and analyze both yours and your partner’s data in a privacy-compliant way to get a better picture of how your customers are interacting with your brand.

Another way data clean rooms can benefit publishers are through Private Marketplace Deals.

If you normally see a lot of digital traffic to your website, or happen to have many online subscribers, advertisers may be more inclined to work with you through PMP deals.

Measuring your audience by layering your first-party data with demographic (where they live) and psychographic (hobbies and interests) factors can help you create high quality target audiences for advertisers.

Let’s circle back to our point about the third-party cookie deprecation. Although it’s great news that the deprecation has been delayed to 2023, advertisers and publishers got a taste of the importance of having (good) first-party data.

Brands that start to use data clean rooms now should be better positioned in the near future as traditional advertising becomes a thing of the past. Those who invest in a strong first-party data strategy now will have the competitive advantage as they work with strategic partners to securely share data and unlock new revenue opportunities.

TL;DR

So what did we learn?

A data clean room is an encrypted, secure location where marketers can add their first-party data. That data is anonymized, layered, and matched with the aggregated data from the clean room provider. The data can be from a walled garden (media data clean room), or be shared between two partners (partner data clean room).

The main benefit is better data measurement. Anyone interested in leveraging their existing first-party data to make smarter advertising decisions and forge new, strategic partnerships can benefit from using data clean rooms.

And there’s your complete guide to data clean rooms.

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