Data clean rooms (DCRs) are a comparatively latest technology that marketers are using to reinforce their use of data in a privacy-compliant way. Ana Milicevic, principal and co-founder of management consultancy Sparrow Advisers, recently gave The MarTech Conference some answers to pressing questions marketers have about how DCRs can power their stack.
“If you’re in a decision-making role you’re probably tasked with a minimum of evaluating whether it is a technology that you want to concentrate to,” said Milicevic. “And in case you’re a practitioner, you very likely have to return on top of things on use it and on whether it’s relevant to your organization.”
What is a DCR?
“It’s a technology that creates a secure, collaborative environment where two or more parties can use data for specific, mutually agreed upon purposes while eliminating exposure of that data to other parties,” said Milicevic, citing the IAB.
Why use a DCR?
“The key innovation here is how potentially sensitive customer data sets are handled,” Milicevic explained. “[Marketers] simply need a greater, safer environment to collaborate with potentially sensitive data sets — first-party data sets particularly.”
First-party data is becoming increasingly scarce with the introduction of privacy regulations like GDPR and CCPA, in addition to the phasing out of third party cookies by Google and other privacy actions by major tech firms along the lines of Apple’s Mail Privacy Protection (MPP) program.
Dig deeper: How firms are leveraging data clean rooms as cookies vanish
Who uses DCRs?
DCRs could be utilized by brands, agencies and publishers. The catch is that these organizations should have already got a high level of data maturity — they’ve made prior investments in data technology and have substantial teams to work with the technology. This implies that right away the technology favors larger firms.
“Process cost and maturity are two significant gating aspects that currently put data clean rooms as a super-premium or ‘luxury’ solution,” Milicevic said.
How much does it cost to use a DCR?
Two-thirds of DCR users have spent a minimum of $200,000 on the technology, and 1 / 4 of those surveyed by the IAB have spent over $500,000, in accordance with Milicevic.
The annual cost can go up over $2 million annually when adding in privacy protection tools and other technology that makes the DCR usable.
What are current and emerging use cases for DCRs?
Current uses for DCRs include
- Data privacy compliance;
- Data anonymization;
- Data cleansing and normalization and
- Data transformation and enrichment.
Emerging use cases include:
- Attribution;
- ROI measurement and modeling;
- Mixed media modeling and
- Predictive analytics.
“In addition to privacy safety and the power to mix first-party data sets is…having the ability to do very advanced analytics in a much easier way,” said Milicevic. “If you’re a data scientist or have data scientists in your team, you’ve probably heard quite a number of complaints about how long it takes to get data right into a shape where it could actually be analyzed. Data clean rooms will reduce this complexity significantly for loads of advanced analytics.”
Where does a DCR slot in your stack?
Generally, the DCR matches between the organization’s data layer and activation layer.
Here is a basic map that’s under no circumstances exhaustive:
At the underside of the stack is the data infrastructure layer which may include a data warehouse, data lake or similar container. Data governance and identity tools also live on this layer.
Sitting above that’s what Milicevic calls the “trust layer,” and that’s where the DCR is. Also within the trust layer are decisioning tools that use data to tell activation present in the layer above it. The activation layer includes all promoting activations and other tools like CDPs that may have activation capabilities.
“What’s particularly attractive about data clean rooms is that they pull out the business logic that used to previously live either within the data infrastructure or activation layers…and now it’s centralizing it,” said Milicevic.
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