“Data clean room” is a growing buzzword in marketing, analytics, and advertising industries. Although data clean rooms aren’t an entirely new concept, they haven’t been widely adopted in practice—yet.
Today, Google’s Ads Data Hub (ADH) is the only data clean room accessible to most advertisers. Most competitors only offer a closed beta, or worse, no data clean room at all. As the industry and privacy landscape changes, it’s important you (and your organization) understand how a data clean room may be helpful for your business.
The Simple Definition
Data clean rooms are locations where large companies (such as Google, Facebook or Amazon) store aggregated advertising data. Data clean rooms are used by businesses to better understand their advertising data. All data clean rooms have extremely strict privacy controls which do not allow businesses to view or pull any customer-level data.
Why Use a Data Clean Room?
There are plenty of reasons to start using a data clean room.
First, data clean rooms typically offer more data and data fields than in-platform reporting. Although more data doesn’t always mean better insights, it does mean there are different ways to understand what’s happening when you spend money to target users.
Second, many clean rooms allow advertisers to build custom audiences that can be sent directly to the platform for advertising purposes. Building audiences using advanced advertising data, plus first-party data, allows organizations to fine-tune their ad targeting and media spend.
Data clean rooms open doors for more advanced analysis. Companies interested in data attribution, customer lifetime value, segmentation, and a more in-depth understanding of their customers and advertising practices will find data clean rooms helpful.
[Interested in how customer lifetime value (CLV) can benefit your business? One InfoTrust client experienced an 168% increase in return on ad spend (ROAS) by utilizing CLV.].
What Data Clean Rooms are Not
Data clean rooms are a single location for all advertising data. However, companies cannot access data that is not their own. When configuring the data clean room, a business will need to link their specific advertising account. The connection restricts what data can be pulled and shared. It’s a common misconception that data clean rooms allow businesses to compare their advertising to that of their competitors.
Are Data Clean Rooms Privacy Compliant?
First, I’d recommend reviewing a data clean room with your legal team before making any decisions.
Generally speaking, data clean rooms do not store personally identifiable information (PII) within their environment, and most platforms will not allow certain data points to leave their clean room environment. These platforms don’t want organizations to be able to tie back a specific impression, click, or activity to one user. These safeguards are what make a data clean room privacy-centric and help organizations follow laws such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).
Challenges of a Data Clean Room
Most data clean rooms today only work for a single platform (e.g. Google or Facebook) and cannot be combined with other data clean rooms. Organizations that advertise across multiple platforms will find this limiting since they cannot join the data to build a full user journey.
Additionally, data clean rooms cannot provide insights for one or a small group of users. Data clean rooms will set a lower limit of how many users are needed before they will share the aggregated results with the business. Google’s Ads Data Hub requires more than 50 users in order to share the aggregated results.
Who Should Use a Data Clean Room?
I encourage any business that relies on advertising to start using a data clean room. Privacy is the way of the future, and getting started with a data clean room now could put you a step ahead of your competition.
Organizations that use Google for advertising can get started with Ads Data Hub. ADH offers insights into advertising from Google Campaign Manager, Display & Video 360 (DV360), Google Ads, and YouTube. Plus, Google is reportedly looking to expand this to cover Search Ads 360 (SA360) in the near future. Learn more about Google’s Ads Data Hub and a few use cases in this helpful InfoTrust article.
What’s Next for Data Clean Rooms?
Google’s Ads Data Hub is the data clean room gaining the most momentum currently. ADH is continually looking to expand features and help advertisers adapt to their new privacy-centric tool. Facebook and Amazon are both testing data clean room concepts, as well. As privacy regulations increase, I suspect data clean rooms will grow in popularity.
Beyond the larger organizations, some companies are working to build omni-channel data clean rooms. The concept is similar; no PII data is stored and only aggregated data is shared back to the business. These platforms are looking to combine data from multiple advertising platforms in one privacy safe location to provide advertisers with the ability to have a full 360-degree view of their customer. Omni-channel data clean rooms are still very new, but I suspect these will also grow in popularity as clean rooms and user privacy expand in the coming months and years.