data clean rooms could do to keep the internet open

Data clean rooms are the answer to the problem of what David Cohen, CEO of the IAB, has described as the ” slow motion train wreck” in addressability. The IAB has a lot to offer.

Jeffrey Bustos, IAB VP, measurement and addressability, stated that addressability is affected by cookies being lost. This means that about 80% of addressable markets will be unknown.

He explained that “everyone is talking about first party data, which is very valuable,” but most publishers don’t have sign on and only 3 to 10% of their readers’ first-party information. This is a problem for advertisers and publishers who want valuable inventory.

Why do we care. Two year ago, was anyone talking about data cleanrooms? According to the IAB, this surge in interest is significant and recent. DCRs can be used to keep brands in touch on the internet with their audience, maintain publisher viability, and provide sophisticated measurement capabilities.

What data clean rooms can do. DCRs, a privacy-enhancing technology, allow data owners (brands and publishers) to share first-party customer data in a privacy compliant manner. Clean rooms allow first-party data from multiple sources to be resolved to the same customer profile in a secure environment while keeping that profile anonymous.

A DCR, in other words is a type of Switzerland. It is a place where competition is allowed to continue while first-party data can be enriched without compromising privacy.

Bestos stated that the data clean room allows publishers to work with brands across their data sources, and also allows them to better understand audience behavior. A brand selling eyeglasses may not know anything about its customers, other than basic transaction data. Enrichment can be achieved by matching profiles with behavioral data from publishers.

Bustos stated, “If you can understand behavioral context, then you can understand what your customers read, what interests them in, and what their hobbies are.” With these insights, brands can better decide what content they want to promote.

The publisher must have certain first-party data in order for the matching to occur, even though it may not have to meet a universal sign-in requirement like The New York Times. Although a publisher might not be able match all the customers of an eye-glass vendor, if the customer enjoys reading the arts and sports sections, that will give some direction as to which audience the vendor should target.

Get deeper: Why clean data rooms

What is good matching? The “State of Data 2023”, which almost exclusively focuses on data clean rooms and DCR efficiency, raises concerns about DCR effectiveness. Average match rates hover at around 50%, with some DCRs achieving lower levels.

Bustos wants to explain this. He said that match rates for matching data are typically about 70% to 70%, which is not bad, but there’s always room for improvement.

The one obstacle is the persistent lack of interoperability among identity solutions. However, it is there. LiveRamp’s RampID can be interoperable with The Trade Desk’s UID2.

Bustos said that publishers find it difficult, but they are able to do so, despite this. There are many identity pixels that can be used for different purposes. It’s not clear which identity provider you should use. It will be a long journey to ensure interoperability.

Maintaining an Open Internet. DCRs can help solve the addressability problem and will also help to keep the internet open. Facebook and other walled gardens have rich troves with behavioral and first-party data. Brands can access these audiences but only with limited visibility.

Bustos stated that CTV is an extremely valuable proposition for advertisers because it allows you to identify users 1:1, which is very powerful. It’s not something that your standard news or editorial publisher has. “I mean, the New York Times has made that move and it’s been extremely successful for them.” Publishers need to provide some level of addressability to be able to compete with streaming services and walled gardens.

DCRs can be a difficult task. Data maturity is a key qualification to get the most from a DCR. According to the IAB report, more than 70% of brands using DCRs or evaluating them have other data-related technologies such as CDPs or DMPs.

Bustos said that if you are looking for a clean data room, there are many technological solutions you need to be able to use. It is important to ensure that you have strong data assets. Bustos also suggests asking what you are trying to accomplish, rather than what technology you would like to have. The first question to ask is “What are you trying to achieve?” A DCR may not be necessary. “I want to do that,” then look for the tools to help you get there.

Also, know that the implementation will require talent. Bustos stated that it is a difficult project to set up. There has been a significant increase in the number of agencies and consulting firms helping to set up data clean rooms. It’s not easy to find enough people so it makes sense to hire outside help and keep a maintenance team in-house.

Inadequate use of measurement capabilities. The IAB’s research reveals that DCR users are not realizing the potential of measurement and attribution, but they are maximizing audience matching capabilities. Bustos stated that advanced models can only be built by data scientists and engineers who are highly skilled.

Many brands who look into this ask, “I want to perform a predictive analysis on my high lifetime customers that will buy in the next 90 day’ or “I want the ability to measure which channels drive the most incremental lift.” But they don’t know why. What’s the point? What is the point?

He warned that it can be difficult to determine the incremental lift of your marketing. You can do a reach, frequency and overlap analysis. This will help you identify areas where there is incremental lift. Companies need to identify their goals and the outcomes they desire, then determine what steps are necessary to get there. This will help you prove your ROI.

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How data cleaning rooms could help keep the internet open was first published on MarTech.