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Data clean rooms (DCRs) are secure, cloud-based solutions designed to allow companies to integrate customer information without exchanging personally identifiable information. While promising to help marketers tap first- and second-party data amid new privacy restrictions, they remain sparsely used, according to a study from the CMO Council and NCSolutions.
The survey of more than 160 marketing leaders — primarily at CPG and retailers — found that 57 percent of respondents do not have a DCR nor have plans for one. One in five reported having one and 24 percent are planning one.
The top obstacle preventing firms from establishing DCRs is lack of data science expertise, cited by 42 percent, followed by lack of budget (35 percent), lack of talent to evaluate (28 percent) and no fully formulated data strategy (25 percent).
“Standing up a data clean room is hard,” the study states. “It takes a lot of resources and the right people: partnership experts who can forge deals with third-party data providers, and data science experts who can evaluate data, understand data clean room structures and run models.”
Interactive Advertising Bureau (IAB)’s just-released study, “State of Data 2023: Data Clean Rooms & the Democratization of Data in the Privacy-Centric Ecosystem,” cited inconsistent state-level privacy legislation, coupled with increased ad signal loss, among the factors increasing the appeal of DCRs.
However, the study authors likewise regard the software as “far from being turnkey technology,” creating “significant challenges” for smaller agencies, brands and publishers/retailers.
Surveys with over 200 data decision-makers found more than half of DCR users (52 percent) cite leveraging results/proving ROI as a challenge. About one-third are facing data interoperability/customization (39 percent), internal resource (38 percent) and privacy (32 percent) challenges when using DCRs.
Less than a third of users are using DCRs’ advanced measurement capabilities, such as attribution, return on investment (ROI)/return on ad spend (ROAS) measurement, media or marketing mix modeling, and propensity modeling and predictive analysis.
“So far, most companies are using DCRs for privacy controls, matching data for collaboration and data activation,” said Jeffrey Bustos, vice president, measurement, addressability & data, IAB. “But that only scratches the surface of what’s possible.”