GUEST OPINION: In this opinion piece, we take a look at whether data clean rooms (DCRs) truly warrant the hype as the “it” solution to the identity challenges businesses face against the backdrop of increasingly strict privacy regulations.
Generally speaking, a DCR is a secure and compliant data-sharing solution that a brand can leverage to learn more about another brand’s customer data. It fosters collaboration among brands similar to the way platforms like Google and Facebook have long provided, enabling them to form audiences, advertise and gain insights into their direct user base.
If a brand doesn’t have enough first-party data and can’t find reliable third-party data, there may be a partner in their ecosystem who potentially has the information they need to keep their business thriving. Second-party data is defined as strategic partners working together to collaborate with each other’s first-party data in a mutually beneficial way born out of a new need for controlled, privacy-conscious, sharing of information.
DCR guidelines and regulations keep data usage in line with today’s evolving privacy laws. Just recently, the Australian Attorney-General's Department released its highly anticipated review of the Privacy Act 1988, which aims to align Australia’s laws with global standards of information privacy protection and properly protect Australians’ privacy.
The potential reforms cover an expansive range of issues from implementing new limits on targeted advertising (particularly, ads aimed at children) to including a suite of individual privacy rights, like the "right of erasure” and deindexing search results with sensitive or inaccurate information, among others.
Major changes to consumer tracking and consent-first policies have led to the degradation of the third-party ecosystem that has powered media buying for two decades. In fact, 64% of advertisers recently shared that Apple ATT, which requires user permission to track their behaviours, is hurting their results. Now is the time for brands to run, not walk, toward first- and second-party data strategies. This will be key to uncovering valuable and useful insights.
This helps to explain why DCRs, which enable collaboration between brands, are quickly becoming an avenue to discover interested high-value audiences. Recent predictions indicate that 80% of advertisers with media buying budgets over AU$1.43 billion will use DCRs by 2023, estimating that there are currently between 250 to 500 data clean room deployments that are either active or in various development stages.
While a DCR is good at what it does, matching audiences and allowing brands to find the segments they want to target; it’s a moot point if the data it’s fed isn’t in a workable state in the first place. A DCR cannot provide value without trustworthy, unified data.
After all, good data powers good marketing. If the data on both sides is unreliable and outdated, then neither brand will get the results they desire. ‘Garbage in equals garbage out,’ and no amount of marketing or money will change that.
That’s where a customer data platform (CDP) comes into the equation and second-party data collaboration can be maximised.
A brand turns to a partner in its ecosystem to ‘fill the gaps’ where it lacks the data needed to thrive. Consider this:
Company A is a clothing manufacturer that specialises in brightly coloured tropical shirts and thongs. It wants to reach audiences that are about to embark on a sunny holiday.
Company B is a travel agency that helps customers book and plan their journeys. Company B can choose to work together with Company A by collaborating on parts of its first-party data, so Company A can display complementary offers for its signature clothing to those who are about to take a relaxing holiday.
A tremendous amount of effort can go into the planning and execution of a data collaboration (with or without a DCR), but there are obstacles that arise that can easily be solved with a CDP.
A CDP is a SaaS technology platform that creates a persistent, unified, omnichannel view of the customer. Data for a CDP is traditionally pulled from multiple online and offline sources where it is then cleaned, combined and intelligence applied to create a single customer profile for analytics, measurement and customer engagement across loyalty and engagement scenarios.
Technical barriers a CDP solves for:
Business barriers a CDP solves for:
As the advertising technology ecosystem evolves, organisations and brands must rethink how first-party data is integrated due to third-party identity graph and cookie deterioration, government legislation and the increasing consumer demand in a privacy-first data world.
For businesses, that means building a flexible foundation to unify, activate and acquire new and existing customers based on a consistent view of their first-party data. With this, navigating the complex MarTech landscape is simpler than you think.
Matt Hallett, who is the Head of product solutions at Amperity, has over 20 years of experience as a MarTech & AdTech professional. He specialises in marketing automation, product management/marketing, data analytics, and business intelligence. He has a track record of delivering cutting-edge solutions to Fortune 500 companies, and previously held leadership positions and entrepreneurial roles at businesses like Appature and IQVia/IMS Health. Matt uses his marketing expertise in CRMs, CDPs, and customer data to help organisations improve customer experiences and business outcomes through the scalable collection, management, and use of first-party, second-party, and third-party data. His vertical industry expertise spans Retail Consumer, B2B, Healthcare, Political and Life Sciences (Pharmaceutical) across both the US and internationally.
Amperity is the leading customer data platform provider that helps companies use data to improve marketing performance, build long-term customer loyalty and drive growth. Amperity's flagship enterprise CDP is used by many of the world's best-loved brands, such as Alaska Airlines, Endeavour Drinks, Kendra Scott, Lucky Brand, Planet Fitness, Seattle Sounders FC, Under Armour and Wyndham Hotels & Resorts. For more information, please visit amperity.com or follow @Amperity.
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