Following Google’s lead, Amazon recently announced a new clean room offering for brands to be able to connect their insights to their advertising activity across their platform. On the other side of the market, media giant Disney announced it can support multiple data clean rooms. These announcements are only the beginning of a ‘clean room boom’, writes Nancy Marzouk.
As first-party data rises to the forefront of advertising activity across the marketplace, a proliferation of data clean rooms will follow. Data clean rooms allow companies to safely share, match and activate data in ways that adhere to specific requirements, be they laws, industry standards or company norms. While large platforms such as Amazon and Google can require brands to use their own data clean rooms, everyone else will also have to figure out the logistics of partnerships in which everyone has their own data clean room.
This begs the question: how do companies effectively navigate working with multiple data clean rooms and deal with the insight fragmentation that comes with it? The answer is that companies need to proactively build out their own clean room strategy in order to embrace the fragmentation.
The true meaning of data partnership
As they build out their identity strategies, marketers, middlemen and publishers will each have their preferred clean room partners (or, alternatively, they’ll attempt to build in-house). At the same time, each company will need to prepare to conform to their partners’ clean room preferences in certain situations.
As in other parts of our industry (such as quality measurement), power and money will dictate how the situation evolves.
For instance, let’s say that a large global brand advertiser like P&G does not want to use Disney’s preferred clean rooms. Disney might consider adapting, even if it is its policy to use its own clean rooms for smaller advertisers. It is this type of scenario that explains why Disney announced that it works with Habu, Snowflake and InfoSum. If it could make everyone else comply with its clean room preference, it would have no need for three different clean room providers. But to attract major advertisers and their agencies, it is providing options and flexibility.
At the same time, it’s just a matter of time before all walled gardens have their own clean rooms – and, as we know from the past, walled gardens don’t have a track record of being flexible. There are a couple reasons why. First, the walled gardens are a must-buy for most advertisers, so they know they have leverage. Second, given their vast reach, proprietary tech and ability to target ideal audiences at scale, they have more technical requirements that buyers and publishers need to conform to. And third, each platform is totally unique, offering a specific ecosystem with a host of specialized data uses (from search to social to display).
While the benefits are many, the trade-off of working with walled gardens has always been the inability to connect insights established on their properties to inform multi-channel optimization, performance and strategy. While clean rooms will improve this somewhat, brands will have to fall in line with what the walled gardens dictate.
Compare this to publishers such as Disney and Nickelodeon, which have similar offerings, similar audiences and relatively straightforward advertising technology compared to the walled gardens. What’s more, these publishers are more inclined to share insights with advertisers. It’s a competitive advantage for them to be adaptable and easy to work with.
Challenges of supporting multiple clean rooms
So, how do companies make the most of this multiple clean room environment? Marketers and publishers will need to think through tough questions to decide if and how to work with multiple clean rooms.
Large brands and major agencies will likely need to build out their own clean room for sharing with partners and publishers, and they’ll need to be able to work with walled garden clean rooms too. Publishers and smaller advertisers and agencies will need an even more flexible situation, perhaps supporting multiple clean room partners (as Disney has chosen to do).
In the inevitable situation that a company has to deal with a partner’s clean room, they need to be able to deeply understand – and trust – its privacy standards. These standards are also evolving in real time, so companies should start to set up red lines with their legal teams and within their privacy agreements to deal with today’s requirements and tomorrow’s changes. For example, today Facebook requires email addresses to build audiences – in the future, it may require email and phone numbers and brands would need to comply with this requirement or risk losing Facebook as a publisher partner.
Each industry and company has its own legal requirements and company limits that will dictate what will and will not be acceptable. Priming everyone involved for these types of changes is the key to long-term success in an environment with many different clean rooms.
Finally, there are the logistics about how to share data across clean rooms. If a brand wants to enable frequency caps on media buys with Amazon and Disney, each with a unique clean room, the data needs to be ported securely and then ideally resolved in some way so that the brand has a single view of overall frequency capping. There needs to be additional technology (such as an identity layer) to manage these nuances that mean the difference between a brand having a secure and viable strategy for using its data across partners and a strategy that’s fragmented and vulnerable.
Like with any major shift in our market, moving to first-party data will require a lot of new infrastructure, new standards and new negotiations with partners. To make the transition as smooth as possible, it’s best for companies to bake interoperability into their own setup, or risk becoming an island. The clean room fragmentation phase is upon us and it’s up to us to make sure we make it to the other side with a viable industry-wide approach to addressability.
Nancy Marzouk is chief executive and founder of MediaWallah.
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