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Blog / What is a Clean Room for Data and Why Should Marketers Care?

What is a Clean Room for Data and Why Should Marketers Care?

Since the death of third-party cookies was announced a couple of years ago, it is no secret that marketers have been struggling to deliver value to their customers and within their organizations. 

With Google being the last search giant to completely phase out third-party cookies by mid-2024, marketers have had to say goodbye to a technology they’ve been relying on for many years to precisely target their audiences with relevant advertising content.

In the wake of this, some interesting new solutions have emerged to help marketers face the new landscape, including the clean room for data.

In this post, we’ll define what data clean room is, and how marketers can leverage it to target audiences with their content.

 

cookies Without cookies, marketers are finding new solutions to target specific audiences.
 
 

What is a clean room for data?

A clean room for data is a technology solution that enables different parties to share their user-level, first-party data, in a secure environment, and without displaying any personal identifiable information (PII) to one another, therefore respecting and complying with users’ privacy regulations, such as GDPR

Sound familiar? Sharing user-level data across parties, i.e. advertisers and publishers is exactly what constitutes third-party cookies, allowing user tracking and advertising targeting. But the key element here is “respecting and complying with users’ privacy regulations”. In the context of digital marketing, this means clean rooms for data could provide a reliable solution for overcoming the deprecation of third-party cookies and working around restrictions put in place by walled garden publishers.

 

How do clean rooms for data work?

Data clean rooms rely on sharing data between organizations, more specifically user-level first-party data. First-party data is data that you own in your organization. Some of the most popular first-party data sources to load into clean rooms include:

  • Your customer database
  • CRM (Customer Relationship Management) data
  • Your subscriber list
  • CDP (Customer Data Platform) data

By nature, first-party data will contain PII data (first name, email, etc.) that uniquely identify a given user.

Now, let’s imagine an example between an eCommerce retailer (advertiser) and a social media platform (publisher), i.e. Instagram.

Both the advertiser and publishers will move their first-party data, (including the PII), into a clean room platform for data centralization. During that process, the clean room will anonymize the PII data, allowing collaboration without violating privacy regulations or compromising individual identities.

To maintain privacy, the data within the clean room is processed using privacy-preserving techniques. These techniques include differential privacy, data anonymization, and secure multi-party computation. 

They ensure that individual-level data cannot be inferred or linked back to specific individuals, minimizing the risk of privacy breaches.

Once the data has been anonymized, it will be matched up and analyzed accordingly.

 

wooden blocks - users in an anonymized network A clean room will anonymize personal data, so parties can collaborate without violating privacy regulations.


In our example, if there was a John Doe user in both the advertiser and publisher dataset, these two instances will be matched up creating a view of John's profile (e.g. what he likes to buy, or how he interacts on social media) without sharing any personal details about John. The data can then be further analyzed for marketing applications, such as building targeted audiences or identifying trends in customer behaviors.

What are the benefits of data clean rooms for marketers?

First and foremost, data clean rooms offer a privacy-compliant solution for marketers. With stricter privacy regulations like GDPR and the CCPA, marketers need to ensure they are handling customer data in a responsible and compliant manner. By utilizing data clean rooms, marketers can protect user privacy while still gaining valuable insights.

Clean rooms for data also facilitate collaboration between different stakeholders. Marketers can work together with advertisers, publishers, and other relevant parties to analyze aggregated data sets and gain deeper insights into customer behavior. This collaborative approach allows marketers to refine their targeting strategies, create personalized campaigns, and improve overall marketing effectiveness.

Access to the data clean room will also be tightly controlled to ensure compliance and prevent unauthorized usage. The clean room platform enforces these access controls and monitors usage to maintain accountability and data governance.

 

lock and key on keyboard GDPR

Clean rooms for data help marketers protect user privacy while analyzing user level data.
 
 

How are clean rooms for data used in marketing?

Marketers can leverage data clean room platforms to access secured data and improve on their marketing activities such as:

1. Audience insights and segmentation

Analyzing aggregated and anonymized user data enables marketers to identify patterns, behaviors, and preferences of specific customer segments and create targeted and specialized marketing campaigns.

2. Campaign optimization and effectiveness

Aggregated data can help marketers assess the impact of their strategies, messaging, and targeting techniques. This allows marketers to optimize their campaigns in real-time, making data-driven decisions to improve their marketing effectiveness and achieve better ROI.

3. Cross-channel attribution

Benefiting from combined data from multiple sources within the clean room, marketers can accurately attribute conversions and measure the impact of each marketing touchpoint, leading to better resource allocation and campaign optimization.

4. Personalization and customer experience

The analysis of anonymized data empowers marketers to deliver highly personalized experiences to their customers, as they can identify individual preferences, behaviors, and needs. This knowledge enables them to tailor offers and recommendations that resonate with each customer, resulting in improved customer experiences and higher engagement.

Conclusion

As marketers face the challenges posed by the deprecation of third-party cookies, data clean rooms emerge as a valuable solution. These privacy-compliant platforms allow for the secure sharing and analysis of anonymized user-level first-party data, enabling collaboration and insights without violating privacy regulations. 

Data clean rooms empower marketers to refine their targeting strategies, optimize campaigns, and deliver personalized experiences. By leveraging this technology, marketers can navigate the changing landscape while protecting user privacy and improving overall marketing effectiveness.

 

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