The rise of the data clean room is sweeping the advertising world as brands and major digital media companies look for ways to keep targeting consumers after the death of cookies. In recent months companies like Disney, NBCUniversal and Walgreens have touted clean rooms as new features within their growing online ad businesses.

There are a couple of big reasons that “clean rooms” emerged as data must-haves for advertisers: One is the heavy focus on data security and privacy, which has prompted regulations in digital advertising worldwide. Another is the pending end of third-party cookies, the online trackers that have been used for years in web browsers to target ads to consumers and measure campaigns. 

“People are seeing the cookie loss, right, ID deprecation, in general, as an immediate threat to scale and performance. So they see that first-party data is now becoming the replacement for the third-party cookies,” said Devon DeBlasio, VP of product marketing at InfoSum, a data collaboration tech platform. “And so they want to update their pipes … to use first-party data. The only way you can do that is through a secure environment like a data clean room.”

What is a clean room?

Clean rooms are a way for a brand, equipped with troves of data on consumers, to sift through, organize and analyze that data without leaking or revealing personally identifiable information. The data clean room started entering the advertising lexicon in 2017, when Google opened its Ads Data Hub. Most other “walled gardens,” including Facebook and Amazon, also have data hubs. The idea is that marketers and the platforms can swap anonymous data without ever losing control of it or leaking sensitive information.

On the open web, digital publishers have concerns about sharing data about visitors to their sites. Personal information on web visitors, stored in cookies, can seep into what’s known as the “bid stream,” the trail of data that informs online ad auctions. Publishers worry ad tech specialists could identify their proprietary audiences, using easy to crack identity trackers, and then target those consumers on other websites, perhaps at reduced rates. 

Brands worry about commingling their consumer data with publishers that could apply that data to help a brand’s rivals.

Why use a clean room?

The “clean room” is the data service that is replacing a part of what cookies and mobile ad IDs used to provide. Apple already deprecated third-party cookies and implemented other anti-internet tracking protocols on mobile devices. Meanwhile, Google plans to drop third-party cookie support in 2023, and has similarly strict designs around data on Android devices. The changes have created difficulties for internet advertisers that have relied on easy access to device IDs and cookies to target ads. These trackers were the easiest way for advertisers to find an exact match—the target audience—on a website or video on the open web.

“Advertisers, marketers, brands and agencies are looking for what’s going to be the method that is going to be safe to use, to replace the way things like third-party cookies and device IDs are being used today,” said John Lee, chief data officer at NBCUniversal, which introduced its clean room solution earlier this year.

Who is using clean rooms?

Media behemoths like NBCUniversal and Disney are making clean rooms a part of their upfront offerings, giving brands greater access to their troves of data, which includes things like set-top boxes, streaming platforms, theme parks and movie studios. This is data these types of companies, historically, would rarely share outside of their four walls. 

NBCU is working with Omnicom Media Group to give its clients access to NBCU’s audience insights hub, while Disney opened up its clean room to Horizon Media. 

For brands utilizing these clean rooms, the goal is to allow more optimization control and interoperability and inform investment strategy, said Megan Pagliuca, chief activation officer, Omnicom Media Group.

Meanwhile, Walgreens has talked about using clean room technology in its retail media network. Walgreens is among a growing set of classic retailers looking to turn customer data—like sales info and online browsing habits—into advertising opportunities.

“On the network or publisher end, they’re able to essentially create really interesting ad products,” InfoSum’s DeBlasio said, “whether it’s a certain audience slice, or audience taxonomy, or different types of ad units they can offer up to a specific advertiser or multiple advertisers, let’s say, within the same vertical.”

The clean rooms gaining steam in the advertising world are “decentralized,” meaning they allow multiple parties to collaborate without sharing data through cloud computing. Centralized clean rooms are located in a central place like a data warehouse, and enable one-to-one data querying, according to InfoSum.

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What can brands do with a clean room?

“We match the data, we build custom audiences in the clean room,” Lee, from NBCU, said. “We plan, activate and we measure. The clean room is now the safe neutral sandbox where all parties can feel good sharing first-party data freely without concerns of data leakage.”

Lee uses an example of a “luxury SUV auto-maker,” which could have 40 million customer profiles in its data stores. That data could come from current owners in the market for a new SUV, people who may have visited the auto-maker’s website. The data also could come from second- and third-party data sources that the automaker licenses.

The brands are trying to match that data to multiple premium publishers, like NBCU and Disney, on top of Google, Amazon and Facebook. “Imagine an advertiser wanting to essentially do a match with seven different premium publishers at the same time, immediately knowing the match rate for those seven publishers,” DeBlasio said. “And then you can determine who you actually want to spend dollars with.”

What are the challenges of a clean room?

Not all brands are ready for clean rooms, said Steve Silvers, senior VP of product at Neustar, a TransUnion company and data technology platform. Clean rooms solve “the sharing problem and not the data problem,” Silvers said. “If you don’t have IDs or any way to kind of address the data, then sticking it in a clean room is not going to help you very much.”

Brands like retailers, e-commerce companies and financial firms have direct relationships with consumers that give them access to first-party data. Meanwhile, brands like consumer packaged goods companies don’t typically sell directly to customers.

The data also needs to be actionable, according to Steve Francolla, head of partnerships at Permutive, a publisher and advertiser data platform. “Identifying a match alone is not enough,” he said. “What needs to happen is an efficient, scalable way to activate it immediately,” for advertisers to start hitting target customers with ads.

There are possible scale issues as advertising shifts to buying ads only on premium publishers through clean room matching. First, the publishers need to have a large, logged-in user base in order to gather enough data to make the audience valuable to reach. Most internet publishers still cater to audiences that are not signed into their subscription services, Silvers said. An effective clean room “requires highly addressable data, a lot of people don’t have that,” Silvers said.

Of course, there are many privacy concerns that all parties need to consider, too. Publishers and marketers still need to make sure they have the correct permissions to collect consumer data. “You need to make sure that the data that you have, that you’re bringing to a clean room,” Silvers said, “that you have rights to that data, it’s clean.”

How much do clean rooms cost?

There are a few pricing models for data storage and services in the clean room space. The publishers, like Disney and NBCUniversal, work with data platforms like InfoSum, Snowflake and Habu. InfoSum provides what it calls “data bunkers” to advertisers, a place where they store their data and then bring it into clean rooms run by publishing partners. Most organizations pay “for the storage inside of that bunker,” and “pay a licensing fee” for the software, DeBlasio said.

Lee said that NBCUniversal works with Snowflake on an enterprise level. NBCU runs its own ads data platform for advertisers buying into TV, streaming and web, but it also has to run its own campaigns as a brand. “I look at this as sort of the future of being able to activate on your own data,” Lee said. “So whatever cost there is associated with setting up Snowflake infrastructure or an InfoSum bunker, things like that, it’s the cost of doing business.”

Contributing: Jeanine Poggi