As privacy regulations and browsers crack down on third-party cookies, marketers are searching for alternative solutions that will help them better understand audiences. Enter identity-driven data clean rooms, which many marketers believe will serve as a more privacy-focused method for analyzing and activating customer data.
However, given clean rooms’ complex nature, marketers are often having trouble navigating these spaces. In response, they’re looking to build collaborative relationships with other brands and identity data providers to make the most of these technologies.
“The big challenge is the data acuity on an individual level and investment at a brand level,” said Will Kunkel, senior vice president of marketing at Stirista. “Some people are simply going to use clean rooms as a clearing house for this shared identity data; other people are going to have to deal with the nuance of multi-layered data ownership and the complexities of a clean room environment.”
To address these challenges, brands are employing customer-centric marketing strategies and identity tools via clean rooms to analyze consumer data while protecting privacy effectively.
What are clean rooms and how do they relate to identity data and consumer privacy?
Clean rooms are secure digital spaces where brands can match consumer data with other first-, second-, and third-party sources. Many brands are using these technologies to prepare for the upcoming deprecation of third-party cookies.
“The cookie has been the de facto ‘best’ solution we had for personalized marketing in the digital space,” said Blaine Britten, senior vice president of data strategy at Stirista. “Clean rooms are more about connecting data sources in a privacy-friendly manner, but many of those tried and true, opted-in identifiers such as email, name, postal, and phone are still in play. They can help create more personalized experiences and offer a better way to manage that consent the consumer gives not only to the brand but the partners and vendors.”
While marketers and technologists continue to develop new forms of clean rooms, the most common types most closely resemble the walled gardens of big brands such as Google and Meta, clean rooms shared by independent partners (usually publishers and advertisers), and “pure” or neutral vendors that provide solutions for any brand to use.
However, these technologies are not one-to-one replacements for third-party cookies.
“They’re not a panacea, but it’s a step in the right direction for moving toward a world less reliant on cookies,” said Kunkel.
Prevalent use cases of clean rooms
While there are plenty of popular use cases for clean rooms between publishers and advertisers, brands from other industries (especially retail and CPG) are finding these technologies’ identity resolution and data analysis capabilities to be particularly effective.
Clean rooms are also helping brands bring together offsite data they wouldn’t normally have access to, as well as allowing for more accurate audience identification. Both of these features allow brands to draw clearer insights and improve the customer journey.
According to Britten, industries that value quick and direct responses tend to get the most out of clean rooms. Yet brands concerned about the inefficiencies of having to pass through a third party are turning to direct providers with their own identity graphs.
“For industries that have a well-defined scope of work, clean rooms create efficiencies as they do not have to contract with each and every potential vendor who can enhance their CRM data, they can pass that work to the clean room,” he said. “However, it’s going to vary by what the end user and the provider need to accomplish because many vendors can improve the client experience by having a direct line of communication to the end user of the data.”
Factors brands are considering as they turn to clean rooms
Privacy regulations and changes to browser tracking are spurring more marketers to adopt clean room technologies. But evaluating these solutions often uncovers business planning and technical challenges, such as identifying solutions that will help brands address identity data match rate issues and those that can connect multiple vendors with the same datasets.
In addition, clean room technologies require marketers to define identities and audiences — something many have not been responsible for when dealing mainly with third-party cookies. There’s very little standardization, so many are looking for experienced identity providers to determine data and identity taxonomies that best serve their needs.
Finding an effective clean room solution takes time. With so many options in play, it can be difficult to know which providers to trust with consumer identity data, not to mention consolidating all of that disparate data to gain a holistic view of audiences. Many brands will choose to bypass clean rooms altogether for other identity resolution technologies.
Yet as the industry evolves, marketers are employing identity solutions that connect data across clean rooms and comply with stricter privacy regulations while matching data to consumer identities.
The future of clean rooms and privacy
Despite the potential hurdles to adopting such complex technologies, the identity capabilities of clean rooms are fueling a growing adoption rate. And although some brands consider them cumbersome, that perception is quickly changing.
“A lot of people believe clean rooms can create a better customer experience,” Britten said. “Indeed, there are solutions that do a good job of delivering on the promise of a privacy-safe, compliant data exchange, which is especially important with the upcoming regulation changes in the various states.”
However, marketers are also recognizing that they can’t rely solely on clean rooms. They’re learning to use these solutions in tandem with technologies such as hashed universal IDs to tie first- and third-party data together for improved analysis.
Overall, more brands are learning to ensure clean rooms are compatible with the rest of their data and identity technologies to power successful campaigns. This is helping them pinpoint the value of clean rooms for their brands.
“When evaluating the clean room options it is critical to assess whether it moves the needle for your business — it is not a magic fix,” said Britten. “It’s all about looking at what you’re trying to accomplish with your identity data and the value delivered — whether it’s in the name of privacy or managing consent or streamlining data sourcing. Clean rooms are one of many tools in the toolbox, but our team has seen them made most effective by the quality identity data passing through them and the clearly defined use case they satisfy.”