As third-party cookies crumble under evolving privacy regulations and browser changes, advertisers face a daunting challenge: how to maintain effective targeting and campaign measurement without compromising user privacy. A solution emerged from the data-driven ether – the data clean room.
Data has been called the world’s new natural resource. It is the asset driving innovation and, increasingly, business success. However, people and governments are concerned about data collection and the sharing of personal identifiable information between brands and ad agencies. This has led to a growing number of consumer privacy regulations to protect user data, including the European Union’s General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) and Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA).
For brands, being able to analyze user behaviour and understand the effectiveness of their advertising campaigns is essential. For years, third-party cookies have been the cornerstone of programmatic advertising, marketing and targeting, and the source of these critical insights.
Third-party cookies are tracking codes generated by a different website than the one a user is visiting. These cookies follow users online and capture the sites visited, purchases made and other online behaviours and interests. All of this information goes to the third-party without the user’s consent or knowledge. This is about to end. Web browsers such as Apple’s Safari and Firefox have already phased out third-party cookies. Google’s Chrome browser plans to do the same in 2024. This is a big deal because Chrome accounts for more than half of all global web traffic.
In a third-party cookieless world, brands will rely on first-party data (i.e., the data they collect directly from visitors to their digital properties and from their marketing campaigns). Data clean rooms will play an essential role in helping brands and their partners share raw data and collaborate while also keeping their user data safe and private.
Fast fact: 98 per cent of advertisers are concerned about online privacy and identity changes negatively impacting customer and audience trust.
What is a data clean room and how does it work?
Data clean rooms are secure, controlled environments where brands can collaborate and analyze their precious first-party data, gleaned directly from their customers and interactions. Gone are the days of sharing raw, identifiable information; within the clean room walls, data undergoes anonymization and aggregation, and is transformed into insightful reports that unlock valuable audience understanding.
Once two first-party data owners (an advertiser and publisher, for example) prepare and upload data sets to a clean room, the data is encrypted, anonymized and used to create aggregated reports that are shared with both parties. Brand marketers can use these reports to tap into audience insights to better target and create content that brings value to their desired audiences.
Data clean rooms also employ machine learning to facilitate the creation of addressable reach extension based on the data sets initially matched. This is a big advantage for smaller advertisers with limited first-party data as they can match their core audience against a much larger pool of publisher data.
Benefits of data clean rooms
Data clean rooms empower brands to:
- Protect user privacy and ensure regulatory compliance. Data clean rooms are secure environments where brands, advertisers, media agencies and publishers can safely merge, match, analyze and collaborate on their first-party data without sharing any personal identifiable information.
- Break down data silos. User journeys span platforms and devices, leaving valuable insights scattered across the digital landscape. Data clean rooms bridge these gaps, enabling cross-platform and cross-device tracking, painting a holistic picture of user behaviour.
- Forge high-value partnerships. Data clean rooms can help advertisers build relationships with publishers and other first-party data owners, opening the door in a privacy-first way to collaboration, richer insights into user behaviour and new market segments.
- Build trust with users. Consumers are increasingly wary of data misuse. Data clean rooms demonstrate a commitment to responsible data management, building trust and transparency – essential ingredients for long-lasting customer relationships.
- Secure their data. Data breaches are every marketer’s nightmare. Data clean rooms boast robust security measures, minimizing the risk of leaks and keeping hard-earned insights safe.
The role of programmatic data clean rooms in privacy-first advertising
Here are five key challenges data clean rooms address:
1. Maintaining regulatory compliance
Strict privacy regulations, such as GDPR, CCPA and PIPEDA, limit the collection and usage of personal data. Data clean rooms offer a safe environment where data can be processed and analyzed without compromising individual privacy. This is possible thanks to techniques such as anonymization and aggregation, and the use of encryption, differential privacy, hashing, salting and other privacy enhancing technologies combined with strict access and privacy controls. All first-party and user-level data, such as cookie IDs, device IDs and IDs created from hashed email addresses, stays within the data clean room and is not shared.
2. Accessing user behaviour insights in a third-party cookieless world
User interactions happen across a range of platforms and devices. With third-party cookies being phased out, it will become much more difficult for bands to accurately track and analyze their behaviour – a critical source of data and insights to create effective targeting and marketing campaigns.
Data clean rooms enable cross-platform and cross-device tracking by allowing businesses to integrate and analyze first-party user data from multiple sources while maintaining user privacy.
3. Collaborating and sharing data while safeguarding user privacy
Brands need to collaborate and share data to gain comprehensive insights, but sharing raw, identifiable first-party data poses significant privacy risks. Data clean rooms allow businesses to share and analyze first-party data using advanced analytics tools and algorithms without compromising user privacy.
4. Building consumer trust
Users are increasingly concerned about how their data is being used. Data clean rooms help businesses manage data in a safe and responsible way. By demonstrating a commitment to user privacy, businesses can build trust and maintain transparency with their target and existing customers.
5. Avoiding data breaches
Storing and processing sensitive user data can pose security risks, especially if the data is not adequately protected. Data clean rooms employ strict security measures for data processing and minimize the risk of breaches.
The post third-party cookies world is fast approaching. The future of advertising lies in respecting user privacy while still delivering impactful campaigns. Data clean rooms, with their focus on collaboration, security and privacy-first insights, are the key to unlocking this future. Postmedia has developed the Cookie-less DMP + Data Clean Room to streamline the transition and provide secure access to our large digital audience, far-reaching network and sophisticated analytics.