What Role Do Data Clean Rooms Play in a Privacy-Driven World?

What Role Do Data Clean Rooms Play in a Privacy-Driven World? - Sachs Marketing Group

We are no longer simply moving away from third-party cookies and targeted advertising – in many ways, we’ve already moved past it. As Google joined Mozilla and Apple in ending its support for third-party cookies in web browsers, the internet collectively reached a historical point in digital advertising and arrived at a post-third-party cookie world.

This means that it’s going to get harder and harder to gauge exactly how effective your advertising is, because you’re not going to have access to the same level of data you might once have had; data that explained a customer’s journey through the web on the way to your page on one of multiple platforms; data that allows you to cross reference ad campaigns on different platforms to gather a better understanding of an ad’s performance; data that allowed you to clarify and confirm that you’re catering your ads to the right kind of leads, and are reaching the kind of people you want to reach.

Does that mean that digital advertising as we know it is dead? Not at all. Does it mean we can still uphold the advertising status quo? For a short period, maybe. But not in the long-term. Alternatives already exist – and while they’re far from ideal, they do give us better insights into what advertisers and ad tech companies will be focused on for the foreseeable future. Among these alternatives is the data clean room. Let’s take a closer look at what it is, and what role it will play in the coming digital landscape of internet advertising.

What are Data Clean Rooms?

A data clean room is a space – real and digital – where aggregate data is held at an immense scale. While smaller companies can develop data clean rooms using their own first-party data in theory, these are little more than sizeable databanks. Data clean rooms describe the kind of aggregate data held securely by companies like Google or Facebook (so calledwalled gardens”), to be used for comparison with first-party data from advertisers without sharing any individual customer data.

Google’s data clean room is one of the largest and most prominent and is called the Ads Data Hub. This is effectively a software solution that helps you analyze data based on your own and Google’s, via BigQuery.

They aren’t exclusive to the tech or advertising industry, though – companies like Unilever and Procter and Gamble have been making use of data clean rooms generated from anonymized data provided by measurement firms like Nielsen.

Data clean rooms play an important role as a sort of information-based mirror for other companies to reflect their own data off of.

With the end of third-party cookies, the idea behind giving companies access to the perks of data clean rooms is that the information being shared is aggregate, rather than individual.

Companies will not and cannot access the raw data that businesses like Google and Facebook are storing and cannot attribute any given piece of data to any given consumer.

Instead, they can use the data sets present within these data clean rooms to essentially compare and contrast with their own first-party data.

Data clean rooms contain raw data that never leaves the room. Advertisers can take a peek, and view an abstracted form of the data stored within, but it is not shared.

Ultimately, data clean rooms allow advertisers to get an idea of whether they’re wasting time going after leads they’re already reaching via a different channel (Twitter vs. Facebook, Google vs. Twitter, etc.), but it is still very much like trying to look into a darkened room through a frosted window.

These massive data sets are nothing new. They have been around for a while, and they further cement the power that ad companies like Facebook and Google have over the entire advertising industry. However, their rise is relatively recent – and can largely be attributed to rising concerns regarding user privacy, the GDPR, and scandals like Cambridge Analytica.

User Privacy Is on the Rise

People have always been a bit wary about being watched on the Internet – but that worry was certainly amplified in waves of news stories regarding consumer information and data misuse.

Apple made headlines after publicly reiterating a commitment to user privacy – going so far as to introduce more user control over ad tracking in iOS 14, and completely eliminate third-party cookie usage in Safari – and other industry giants have followed suit, as it became obvious what direction the winds were taking.

An Imperfect Solution

Data clean rooms like Google’s Ads Data Hub constitute a less accurate, but serviceable alternative when analyzing ad performance on Google channels – things like Google Search, YouTube, and Google Shopping.

It’s especially effective if you’re targeting users on all of these things and have a serious amount of first-party data.

But it isn’t going to give you reliable cross-platform data – no data clean rooms can, even if ad companies promise otherwise. This means you’re left with manually figuring out whether you’re double dipping by hitting the same users on multiple platforms.

Alternatives to Data Clean Rooms

Data clean rooms aren’t the alpha and the omega. There are a few other alternatives floating around – the most significant one being browser-based tracking, such as Google’s experimental FLoC (federated learning of cohorts).

This is a system that anonymizes individual customer data (gathered by the browser) by using its data to describe different customer archetypes rather than individual consumers – hiding the individual in the crowd. But the efficacy, security, and safety of this system is yet to be fully understood. FLoC is still undergoing origin trials.

What Does This All Mean?

The jump away from third-party cookies and more towards large aggregates of anonymized data from first-party sources, and anonymized data comparison to huge customer databanks (from the likes of Google and Facebook) further amplifies the ad monopoly that walled gardens have in the industry.

It also gives brands with much more customer data, or an established brand (and far greater opportunity to gather comparative data) the clear upper hand when it comes to making the most of their information without violating the GDPR, or other user privacy initiatives.

There’s a silver lining to it all, though. This will be as good as any an incentive for you to invest in your own CRM (customer relationship management) solutions to better gather and store first-party information on the people that interact with your company and products online. If you can no longer rely on third-party cookies to help you track users throughout the web, your website, app, and storefronts will have to do the heavy lifting.

Want to learn more about how to make the future of digital marketing work for you? Get in touch with us.

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SEO virtuoso, CEO @Sachs Marketing Group. Focused on being of service to business owners - helping to better position them in the eyes of their audiences.

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