What every brand needs to know before jumping into clean rooms

Clean rooms are the latest buzzy trend marketers can’t seem to quit, especially as the emphasis on needing first-party data continues to grow louder. This year, Gartner predicts that 80 percent of advertisers spending more than $1 billion a year on media will use data clean rooms.

There’s a number of reasons why. As addressable media scales up in the U.S., consumer data and identity solutions are at the forefront of brand strategy, but no one wants to relive another Cambridge Analytica debacle as more consumer privacy regulations pop up around the world (Digital Markets Act and GDPR, for instance). Clean rooms — where two entities (whether they are brands, publishers, agencies, or retailers) can exchange aggregated first-party data in a privacy-conscious “safe room” — provides a possible option for data sharing.

As much as the promise is there, marketers might want to pause on their cleanroom ambitions and take a walking, rather than running, approach. Many industry experts agree that marketers need certain practices in place before they decide to hop onto the industry’s latest buzzword, especially because it can be a costly and time-consuming endeavor.

“A clean room is not the solution, it’s a part to enable solutions. So, you have to make sure you have all cards on the table,” Matt Reder, senior VP, director, solutions architect at Publicis Groupe-owned media agency Starcom, which advises several companies around clean room solutions, tells The Current.

Clean up data first, clean room later

Over the past few years, several prominent companies in the advertising industry — from Amazon to Google — have introduced their own updates to their data clean rooms, and there are more options than ever where interoperability can play a large role, such as offerings from InfoSum, Habu, and Snowflake. Panels at conferences from Advertising Week to CES have been touting clean rooms as a possible solution to the growing identity needs of the industry.

But many experts believe there is still much confusion, and the demand in the marketplace has prompted the Interactive Advertising Bureau (IAB) to release its own guidance and recommended practices.

Jessica Simpson, senior VP of global solutions consulting at Publicis Groupe, believes every brand — whether it’s a Fortune 500 name brand or a direct-to-consumer startup — will need a clean room strategy; it just might look a little different depending on the use cases and size of the company. Instead of needing to partner with a clean room directly, for instance, their data might sit in the cloud, or in their primary demand-side platform.

Either way, Simpson, who consults with CMOs about the emerging trend, recommends what she calls a “marketing readiness assessment” before any data is transported outside of the company. This means taking a robust look at whether brands have the right consent framework, privacy user experience, identity strategy, and data hygiene strategies in place.

“Some will argue that if you don’t have purpose-driven consent, meaning if someone hasn’t actually come to your website and said, ‘I, Jessica Simpson, am giving you my email address so that you can target me across the advertising ecosystem, use my data for measurement, and then in exchange, you’re giving me a subscription for a year to Spotify,’ then that data shouldn’t even be put into a clean room environment, even though it’s never leaving your four walls,” Simpson tells The Current.

It’s an approach that Simpson believes marketers should follow ahead of the data privacy standards that have been applied in countries like China, Australia, parts of MENA, and the U.K., but which are just coming to the U.S. She explains: “That mitigates the most amount of risk while allowing us to act and drive the most amount of reward.”

Clean room pitfalls

Reder has seen a number of common pitfalls that companies have gone through before applying a clean room to their data strategy. He advises that brands should know the specific use cases for how they want to use a clean room. While some may want to use it as a place to store and share data, for instance, others might want to apply more measurement capabilities.

Before partnering with a clean room, it’s fundamental to make sure the party you’re sharing data with is also ready to use a clean room, and uses the same identifier, such as Unified ID 2.0. “The last thing you want to do if you’re a brand is partner with a clean room, drop your data there, and you’re the one holding the check. You definitely want to have other partners involved.”

It’s also a process that requires a decent amount of effort across numerous groups of a brand, and so the entire organization needs to be aligned, Reder says. Nick Halstead, founder and CTO at InfoSum, described the process to Digiday as “cumbersome and fraught for the user.” Without enough oversight, the process can also verge on risky with the amount of data sets being shared across emails or shared folders.

“Investing in and adopting a clean room is not just a six-week thing. It’s not just a month-long thing,” says Reder. “You need to have that organizational alignment. I think that’s one of the reasons why some brands are still holding off — they want to see how the marketplace shakes out.”