Can Data Clean Rooms Be The Answer For Privacy-Safe Marketing?
Michael Schoen is SVP & GM, Marketing Solutions at Neustar. getty  When Apple introduced iOS 14.5 in April, it began requiring mobile apps to ask users for permission to gather tracking data. Until now, apps have relied on Apples Identifier for Advertisers (IDFA) to build user profiles for targeting and advertising purposes. As the early returns demonstrate, Apples new privacy approach is confirming advertisers worst fears about how American consumers feel about widespread data gathering on the internet. More consumers are choosing to block app tracking than the advertising industry expected, according to a recently published report. With third-party cookies on the way out, albeit later than originally expected, marketers are anxious about the future. Consumer data is the lifeblood of modern marketing. And without volumes of data to power targeting, measurement and attribution, brands are experiencing something akin to an existential crisis. But dont despair. Its normal to have profound feelings of fear and anxiety during times of great transition. In dealing with the shifting consumer data landscape, its important to adjust your mindset and the lens through which you look at data. Instead of thinking of this new era of privacy considerations and consumer preference as a crisis, see it as an opportunity to make changes that will prepare you for the future. Sharing Data In A Privacy-Safe Way  Theres so much changing in terms of what data marketers can use, how they can use it and where it can live. To avoid strategy overload here, lets focus on how marketing and analytics teams can use data in a consumer-friendly and privacy-safe way. There is growing consensus that in a world without cookies and mobile ad identifiers, parties will be sharing more customer data with each other for mutual benefit. Software platforms known as data clean rooms are emerging to meet the growing demand for data collaboration. Think of data clean rooms as the blockchain of marketing and analytics. Clean rooms work in distributed data environments by providing secure platforms where multiple parties can share anonymized offline and online consumer data without ever exposing the raw data to any other party. Sensitive customer information also never moves between databases, eliminating the risk of data leaks. At Neustar, we are helping clients develop their data strategies in this new environment so they can continue to build and activate audiences and measure them. We provide the connections and technology, like distributed clean rooms, to maintain the flow of data. Clean rooms offer a collaborative option to power data-driven marketing  online and offline  in this emerging world of heightened privacy and data security. The Potential Of Data Clean Rooms  Brands, both marketers and publishers, have built trusted relationships with consumers, and they cant share that data freely or carelessly anymore. One of the big promises of clean rooms is the facilitation of second-party data marketplaces. In e-commerce, for instance, clean rooms can help consumer packaged goods (CPG) brands and retailers control how and when their data is shared and know that its done in a safe and secure way. Greater data transparency between brands and retailers brings benefits to both parties. It allows brands to better keep up with demand from their retail partners and gain insights into best-performing audience types and channels. For retailers, it means better category and inventory management. More data collaboration also creates opportunities for cooperative promotions and advertising and drives insights to enrich their offline and online marketing strategies. For publishers with larger numbers of subscribers, theres an opportunity to use clean rooms to build more secure private marketplaces, where advertising is bought and sold to select buyers. Publishers can gain a deeper understanding of their audience by combining their first-party data with psychographic information, such as hobbies, spending habits and values. The combination of demographics and psychographics allows publishers to build high-value audiences for their advertisers. There Will Be Hurdles In The Transition  Clean rooms dont require parties to enter into data-sharing agreements. So its a heavy lift for providers of distributed solutions to build trust with clients who are very protective of their first-party data. At the moment, clean rooms arent easy to use, unless you are a data scientist. Another hurdle is that walled gardens like Facebook have their own clean rooms to safely provide brands with data about their ads on the platforms. But they prevent advertisers from using it in other channels. That means brands might have to use walled garden clean rooms and distributed clean rooms to get the full measure of a customer journey. It will take some time to develop a network of connected data sources to provide the necessary volume and insight for data analytics. Its important for advertisers and publishers to get their data governance frameworks in order so that parties that want to collaborate understand how data at each organization is collected, validated, stored and privacy-protected. Clients also should bring their data science and analytics teams to the table to discuss best practices for the analysis that can be applied to these decentralized environments. The way I see it, theres no time like the present to start testing clean rooms. The growing momentum toward enhancing privacy rights and consumer protection has shaken up the entire marketing and analytics ecosystem. Marketers have to find new ways to work with each other to continue to create better cross-channel consumer experiences and effectively measure their strategies. Privacy-safe collaboration in clean rooms can be done without sharing any sensitive data at all. That sounds counterintuitive, but I believe its the way forward. Forbes Communications Council is an invitation-only community for executives in successful public relations, media strategy, creative and advertising agencies.