The digital world will soon enter new territory with Google’s cookie deprecation in 2024. It’s all due to new data privacy challenges that will make tracking and utilizing customer data more challenging. Tracking will become more limited, targeted strategies will become more complex, and failed compliance will lead to huge penalties.
So to prepare for these new changes, we have to implement new solutions that will mitigate future data privacy challenges. One such solution is using data cleanrooms; digitally sterile environments where companies can process and analyze data without compromising privacy.
Understanding Data Cleanrooms
Data cleanrooms are controlled and sterile digital environments that can be used to analyze and process data without risking a user’s privacy. Practically speaking, it is not really a “room” of sorts but is rather inspired by physical cleanrooms where you have a clean environment that is isolated from the outside world and is thus immune to contamination.
In data processing, a cleanroom is a way to aggregate and anonymize user information. This protects individual user privacy but still gains valuable insights into a large group of users. Advertisers can look at this data with non-personally identifiable information (non-PII) to get a better idea of what demographics to target and how audiences are engaging with their content and products.
Since individual users cannot be identified from these aggregated data sets, it protects their privacy. However, you can still gain valuable insights from the data, and advertisers can still get the information that they are looking for.
This method of processing and analyzing data differs from traditional data handling methods because the raw data does not need to be shared. It also ensures that the data is processed with compliance in mind and that heightened security measures protect the data. Finally, it adapts to the cookie deprecation that Google will be experimenting with since companies can no longer use traditional tracking methods. However, they can still derive insights from first-party data.
Benefits of Data Cleanrooms
Data cleanrooms come with several different benefits.
- Enhanced Privacy – Data cleanrooms use various techniques to preserve individual users’ privacy. This protects sensitive data and ensures they can comply with privacy regulations, such as GDPR or CCPA.
- Accurate Insights – Cleanrooms allow first-party data to be aggregated from multiple verified sources. This data can provide comprehensive and accurate data on users and behaviors, which can then be processed by sophisticated analytics techniques to gain meaningful and accurate insights.
- Improved Personalization – Cleanrooms allow organizations to create personalized user profiles without invading a user’s privacy. This is thanks to the improved accuracy and relevancy of the data.
- Collaboration and Partnership – Data cleanrooms allow for collaboration between first-party data sources. They become shared analytical spaces where partnerships can be formed to create a collection of data, insights, and intelligence for mutual benefit–and it can all be done safely by maintaining data security.
Implementation and Adoption
Implementing data cleanrooms can be difficult, as there is a lot of technical complexity involved. For instance, integrating data cleanrooms with existing technologies will be challenging, especially with compatibility issues and technical limitations that may hinder cross-platform data sharing.
Independent data cleanrooms are currently in use by many different businesses. However, there are also larger walled garden-based clean rooms such as Google’s Ads Data Hub and Amazon Marketing Cloud.
Data cleanrooms can be expensive to implement, especially with technical limitations and compatibility hurdles. Cross-platform data sharing also requires the standardization of data sets, which is currently difficult due to datasets being formatted differently, and thus challenging to merge.
Currently, many independent data cleanrooms are operated manually. For instance, shared cloud folders may be created to share multiple data sets between entities. However, this can lead to security risks. The merging of datasets is also a manual process, as different companies and entities may follow different data collection standards.
And lastly, scalability is also a challenge that companies must overcome. This can be achieved with the growth of cloud-based solutions that can facilitate the storing and processing of large datasets.
The Future of Data Cleanrooms
More organizations will likely adopt data cleanrooms in response to evolving privacy regulations and technological advancements. However, challenges will always exist, even in the future where more companies adopt such practices and implement these systems into their businesses.
We’ll likely see a standardization of how data is collected and stored to ensure full cross-platform compatibility. This will ensure that all datasets can be merged if needed to enable greater collaboration between companies. There will likely also be more supporting technologies that enable the sharing and depersonalization of data before it is shared in a data cleanroom.
Data cleanrooms also align with the growing trend of providing users with more control over their data. In the future, we may see user-centric features, such as allowing them to control how their data is used within cleanroom environments, or being able to opt-out entirely.
For companies interested in implementing data cleanrooms today, it’s important to discuss with partners how the data will be shared, what formats the datasets must follow, and if the use of a third-party cleanroom vendor will be used or if the datasets will be handled in-house.
With enhanced data privacy and the possibility of merging datasets for more accuracy and deeper insights, data cleanrooms will almost certainly be widespread shortly, especially as we move into a post-cookie era. Businesses benefit greatly from data to gain insights, but privacy regulations can limit how this information can be used on a large scale. With data cleanrooms, companies can band together and share their data while complying with these regulations.
Data cleanrooms are a mutually beneficial partnership for all companies involved, but there will be several logistical and technological challenges to overcome before they become mainstream.