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Home Marketing B2B Marketing

Data clean room craze raises new questions about access, interoperability

February 21, 2023
in B2B Marketing
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  • Data clean rooms (DCRs) are a priority area for many marketers in 2023, but raise tough questions for the industry as adoption spreads, a new report from the Interactive Advertising Bureau (IAB) found. The research was fielded for the trade group by Ipsos.    
  • Steep investments are required to maintain DCRs, both in terms of building the underlying tech and the talent needed to manage it. That puts smaller brands, agencies and publishers at a “tremendous market disadvantage,” per the IAB — one that may curtail in-housing trends.
  • The IAB also views DCRs as needing data interoperability to reach their full potential, an area where marketers have historically struggled. Among surveyed DCR users, 39% pointed to challenges with data interoperability and customization, while 38% called out a lack of internal resources and 32% did so for privacy hurdles. 

DCRs have become a fixation point for marketers as they try to address the pending deprecation of third-party cookies. The technology allows advertisers and platforms to dump their aggregated first-party data into one place in a privacy-safe fashion. Different data pools can then be matched up to refine targeting and address problems like audience duplication, among other functions.

Platforms and publishers have quickly wised up to the business potential. Amazon last month expanded clean room capabilities powered by its AWS cloud-based computing juggernaut. Disney Advertising around the same time enhanced its existing DCR through a VideoAmp integration. 

Broadly speaking, companies are expected to invest 29% more in DCRs this year compared to last, according to the IAB. The research conducted by Ipsos draws on 200 surveys and 20 in-depth interviews with stakeholders from across different industry categories. 

“There is growing demand due to loss of signals, and wanting to share data with partners without sharing sensitive data,” said Jeffrey Bustos, vice president of measurement, addressability and data at the IAB, in a statement. “This may show that companies are understanding what’s required and ramping up their investments accordingly.”

But the trade group’s report also emphasizes that the resource intensiveness of DCRs could leave smaller and mid-size marketing players behind at a critical juncture. 

DCRs are often leveraged in tandem with other ad tech like customer data platforms, data management platforms and consent management platforms. The compounded annual costs of these stacks can climb above $2 million, per the IAB.

Nearly one-quarter (23%) of marketers spent over $500,000 on their DCRs alone in 2022, while 62% put a minimum of $200,000 toward the technology. The heavy price tag could be more of a drag in a downturn, when marketing departments are often among the first to feel cutbacks. 

Time is another consideration, with respondents stating that standing up a DCR offering can take up to two years. Meanwhile, Google has slotted cookie deprecation to take effect in 2024. On the talent front, roughly half of DCR users have teams of six or more people dedicated to the tech and 30% have a minimum of 11 specialists.

Looking beyond the barriers to entry, the IAB believes DCRs could be held back without full data interoperability. That’s a level of standardization and unification that’s been called for in digital marketing and ad tech for years, while the landscape in reality has often remained fragmented and controlled by walled gardens.

“It’s in everyone’s interests for closed ecosystems to provide access so that advertisers can effectively analyze their campaign activity,” said Bustos. “Advertisers need a window into the data.”

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