Opinion: Data clean rooms – the new standard in measurement in a privacy-first era

Brands and marketers can use DCRs to maximise the power of their data while also respecting current privacy regulations, explains the author

Aug 17, 2022 10:27:00 AM | Article | Himanshu Kulkarni

The mobile marketing ecosystem is constantly evolving to meet people’s expectations on privacy, due to which measurement is also being affected. First-party data collection has already become a daunting task for marketers, and this trajectory will continue. It all started with Apple’s ATT update in 2021 and most recently Google’s update on expanding Privacy Sandbox to Android, where the prime focus is to develop privacy-enhancing advertising solutions.
 
The future is privacy-first, and marketers are actively looking for ways to drive marketing results without compromising user trust while providing personalised experiences.
 
Measure, attribute, and optimize marketing campaigns
 
As the scrutiny around privacy regulations and data privacy rises, app marketers are finding it increasingly difficult to collect, store, analyse and share data. Further, marketers are facing inaccuracies in measuring their return on advertising spend. Dealing with inaccurate, missing, or messy data can very easily lead to mistakes in marketing investments impacting the return on marketing spend. This is where data clean room (DCR) can help. DCR offers a secure and protected environment where first-party data is processed and anonymised to be made available for measurement.
 
While user-level data goes into the DCR, aggregated insights come out in a co-mingled audience group called a cohort. By utilising a data clean room, mobile app marketers can utilise the power of their data while respecting current privacy regulations. The key ingredient that makes DCRs a highly credible platform is the fact that access, availability, and usage of data are agreed upon by all data clean room parties, while data governance is enforced by the trusted data clean room provider.
 
As per a study by Gartner, around 80% of marketers with media budgets over US$1 billion will adopt DCR by 2023. The more diverse the options, the easier it would be for businesses to adopt the most suitable DCR platform for their unique needs. And the more businesses collaborate over regulated intermediary data grounds such as DCR, the easier it would be for marketers to measure, attribute, and optimise their campaigns.
 
Data Clean Rooms empowering marketers
 
These secure environments are helping marketers up their game through various means, some of which include:
 
1. Accurately measure the performance of a marketing campaign: Data clean rooms offer advertisers a neutral environment to analyse both CRM data and ad exposure data provided by marketing partners. Advertisers can upload their first-party data into a data clean room following a campaign and match them against identical key identifiers that are present in it. They can further conduct analysis across their customer data and the ad exposure data made available by the data clean room provider. Through this, advertisers are able to accurately measure the intersection between new customers and those exposed to the campaign across each media avenue. This is then used to determine the percentage of new customers who can be attributed to each channel.
 
2. Helping build more optimised audiences: Multiple privacy-related updates in the recent past have impeded marketers’ access to user-level data and granular audience insights have become the most sought-after information in the recent past. Data clean rooms enable granularity by collecting data from authorised third-party sources and then segmenting them into behavioural, demographic, and location buckets on an aggregate level to develop the internal database for data enrichment and analysis. Data Clean Rooms enable multiple data sources to be virtually connected through anonymised cohorts, thus avoiding the use of personal data. Marketers can then measure the overlap that exists between their target audience and various media audiences. This eventually helps them map the optimal route to reach their audience, plan more effective campaigns, and unlock omnichannel measurement.
 
3. Reach and frequency measurement optimisation: Marketers can make use of the first-party impression data in the form of aggregated data to understand which ads are being served to which customers, along with their frequency. This data is privacy-compliant and is available on the basis of explicit consent from the users. This information can be further used to deduplicate campaign reach and frequency, minimise ad fatigue, and improve media planning. Data clean rooms enable the optimization of a customer’s journey, engaging users based on where they are in the funnel and how they interact with the ad. 
 
4. Incrementality: Data clean rooms give marketers access to impression data from publishers and audiences, first-party response, and conversion data which can all be tied together at the user level to understand the incremental impact of marketing efforts.
 
5. Showcasing user quality: Data clean room is the ideal sandbox for both publishers and advertisers to weigh in and demonstrate the value of their acquired users. Publishers can enter user-level data into it and help advertisers gauge customer overlap and user quality. Additionally, advertisers can build an audience and then test it against publisher X to assess results.
 
6. Training, inference, and propensity scoring: DCRs enable marketers to regain access to restricted granular user-level data in the form of aggregated data. With this, marketers can successfully run training and inference models, and even propensity models, which can help them estimate the likelihood that a customer will perform a specific action.
 
In today’s privacy-centric world, marketers need to consider data clean rooms to unlock collaboration opportunities that were not possible before. Brands and marketers can use DCRs to maximise the power of their data while also respecting current privacy regulations. In order to perform more efficiently, DCRs can be used by advertisers who are looking to understand data attribution, customer lifestyle value, segmentation, and customer behavior in a privacy-compliant way. At the end of the day, DCRs offer a win-win privacy-centric solution to all the parties involved- be it brands and advertisers or users and policymakers.
 
The author is senior director, strategic sales, AppsFlyer SEAPAC