Are clean rooms a cure-all? It depends on how they’re used

Depending on who you ask and what you read, clean rooms are a solution for analytics, attribution, activation, targeting, measurement, identification, segmentation… It’s no wonder a marketing industry panicked by third-party cookie deprecation is looking to them as the panacea for their problems. But if the claims about what clean rooms can do outpace the reality, they risk suffering the same fate as customer data platforms (CPDs) - another genuinely useful data tool that was victim of its own hype - where inappropriate usage and unrealistic expectations led to disappointed marketers.

So, are clean rooms the solution to all the industry’s problems or snake oil? To find the answer, let’s look at what clean rooms are, how they should be used, and how they fit into the privacy-first era of digital advertising.
 

What is a data clean room?

At their heart, clean rooms are a collaboration environment. They allow two (or more) organisations to share and compare data sets while retaining ownership of the data they put in. Cryptography scrambles the data to ensure that no personally identifiable information is revealed, and participants have full control over which data is visible to others and which remains hidden.

However, this assumes that the clean room is independent. Many media giants have developed “clean rooms” of their own. Such centralised clean rooms are less of a collaborative environment and more of a privacy-preserving data exchange where users can barter for the masses of profiles held within walled gardens, strictly on the terms of the platform holder. 

The proliferation of clean rooms has also led to concerns about interoperability. If an organisation puts the effort into learning how to use a particular clean room and make their data compatible with it, they don’t want to have to go through the process again if another partner wants to use a different clean room to collaborate. If people become “locked in” to using certain platforms, the dream of enriching marketing data through widespread industry collaboration will be short-lived. 
 

Are data clean rooms a replacement for third-party cookies?

Independent or not, no clean room is a solution for all of digital marketing’s current ailments, despite some lofty claims from martech vendors. Yes, a privacy-preserving data sharing platform does make collaboration easier but, in reality, collaboration is another word for trading. The players with lots of data have the bargaining power to win big in a clean room, but those with little to no data of their own will have to pay to stay at the table. A data clean room is just as capable of being a vehicle for consolidation as it is an environment for collaboration.

In terms of replicating the cross-channel tracking capabilities that have been, or are being, lost to the deprecation of third-party cookies, clean rooms only fill the gap in the most ideal scenario, where all parties collaborate to piece together the full customer journey, end-to-end. This is certainly possible, but the time, effort, and resources required to negotiate and maintain such an exchange cannot be underestimated.

Even if all required parties do collaborate, clean rooms can’t work magic on bad data. As the old adage goes: garbage in, garbage out. If organisations try to compare data that does not have compatible parameters or is stale, no insights will be gleaned. For example, clean rooms can’t conjure identifiers out of nowhere, so ID solutions need to be in place prior to data being inserted to enable matching between parties.
 

So clean rooms aren’t a cure-all, but are they still useful?

A clean room can be an environment for generating actionable marketing insights and cross-channel customer tracking, the same way land can be an environment to build a house. Show up at a site without materials and knowledge of how to put them together, nothing will get built; try to use a clean room without useful data and the relevant expertise, no marketing insights will be revealed.

But when all parties have a clear objective and expertise for using clean rooms, there are countless potential uses for the anonymised data sharing that they facilitate. For example, brands with overlapping markets could use a data clean room to identify opportunities for cross promotion; or a brand and an ecommerce platform could follow customer journeys across channels; or publishers could compare audiences to build more detailed segments and increase the value of their inventory.

As long as clean rooms are understood to be (and marketed as) collaborative environments rather than tools to replace third-party cookies, people will avoid disappointment. We do not yet know how the privacy-first digital advertising ecosystem will settle, but whatever new normal emerges will be powered by multiple overlapping and interoperable solutions, not a single silver bullet.