Demystifying the Data Clean Room Market

data clean room market - demystified

Before reading about the Data Clean Room market, if you missed our previous piece about Data Clean Rooms (DCRs), catch up on the hype and why we’ll see increased adoption of this new technology in adtech stacks starting in 2023: Data Clean Room: What It is and What Advertisers Need to Know.

Since Google announced the deprecation of 3rd party cookies from Chrome, Data Clean Room technology is surging beyond its initial walls.

According to Gartner, 80% of advertisers that spend more than $1 billion annually on media will use DCRs by 2023. So it’s not surprising to realize that no adtech event is run without a conversation about clean rooms lately!

But even if both advertisers and publishers are already looking into DCRs and starting to test them, we don’t expect analysts to immediately create a wave or quadrant on DCRs.

So what can we do to help demystify a new market already highly fragmented?

Read on for insights into emerging categories of data clean rooms, as well as where and when we see them as solid or risky to future-proof your advertising and monetization strategies through data collaboration.

The Data Clean Room Market

The market is rapidly growing and evolving, but we can already find data clean room technology in different shapes and forms, with the ultimate goal of helping two or more organizations collaborate using their respective, consented first-party data in a private and secure environment.

Independent VendorsData WarehousesWalled Gardens & Publishers
TypePure Play DCRIdentity and Data Provider with DCRCDP with DCRData Warehouse DCRWalled Garden DCRPublisher
Vendor examplesInfoSum
Habu
Decentriq
Optable
Liveramp
Merkury
Neustar
Adobe
BlueConic
Databricks
Snowflake
Google (upcoming)
Amazon
Facebook
Google
Disney
NBCU
Roku
Cookieless IDNoYesNoNoNoSometimes
ID AgnosticYesNoYesYesNoNo
No-Code UIYesNoYesNoNoSometimes

Legend

  • Vendor examples: Illustrative representing a few vendors in the specified category.
  • Cookieless ID: Represents alternative identity solutions from 3rd-party cookies provided by vendors.
  • ID Agnostic: Represents the ability for a DCR to operate with any identity chosen by collaboration parties, as opposed to forcing usage of one or a few specific identities.
  • No-Code UI: Represents the ability for business users to execute data collaboration use cases without relying on data engineering or data analytics teams.

Independent Vendors

Pure Play DCR

Pure play data clean room solutions are provided by companies focused on data collaboration use cases in a neutral and privacy-safe environment. Pure play vendors could be considered “best-of-breed” as they focus on data collaboration technology, without looking to lock clients in any cloud, identity or customer data platform (CDP) components. Their primary advantage is offering a user-friendly UI reducing dependency on IT and data teams.

Vendor ExamplesInfoSum, Habu, Decentriq, Optable
Cookieless IDNo, pure play vendors do not provide a cookieless ID.
ID AgnosticYes, while a common ID is required to deterministically match data sets between a brand and its collaboration partner(s), pure play vendors can operate with any chosen identifier.
No-code UIYes, these vendors differentiate themselves from alternatives solutions by providing a user-friendly no-code UI for users.

Recommended when:

  • Looking for a neutral technology not tied to any ID or any other technology choice in a client stack
  • Looking to provide business access to DCR for self-serve collaboration

Avoid when:

  • Solution not adopted by data collaboration partners

Identity and Data Provider with DCR

Some identity and Data Provider vendors have built data clean room technology before the category name even existed, such as Liveramp Safe Haven, for example. Others created a solution to prepare for market demand to operate in a world without third-party cookies.

These solutions are often limited and highly technical — requiring the user to write SQL queries — and locks users into the ID solution sold by the vendor.

Vendor ExamplesLiveramp, Merkle Merkury, Neustar
Cookieless IDYes, vendors are providing an alternative ID to 3rd-party cookies.
ID AgnosticNo, the data clean room is built to operate with the vendor cookieless ID.
No-code UINo, the technology was not built to be used by business users.

Recommended when:

  • Already using the ID from the same vendor and data partners are also leveraging the same ID

Avoid when:

  • Looking to avoid lock-in using the same vendor for both identity and data collaboration
  • Technology not adopted by data collaboration partners

CDP with DCR

So far, a couple of CDP vendors have built or announced data clean room capabilities. Among all the categories of clean room technology, these are the least likely to see adoption. They would require the brand and its data partner to adopt the same CDP technology, which is a big ask.

The market is moving toward the adoption of composable CDPs — as opposed to bundled CDPs — where customer data remains stored in a warehouse, reducing the value of leveraging a CDP vendor clean room.

Vendor ExamplesAdobe, BlueConic
Cookieless IDNo, collaboration will be done on an ID already present in the CDP data set
ID AgnosticYes, any ID can be used to deterministically match data sets
No-code UIYes, even if the UI remains technical

Recommended when:

  • Already deploying the vendor’s CDP and looking to work with very few partners who will be making the same technology choices

Avoid when:

  • Looking to avoid lock-in with one technology
  • Planning to work with an extended list of partners
  • Looking to for a future-proof solution

Data Warehouses

Data Warehouse DCR

Brands are expanding their adoption of cloud data warehouse technology to centralize their customer data in one place. Add in Data Shares — a new way to provide controlled access to data — and you find the ingredients to easily create a data clean room for collaboration.

Warehouses are providing great technology for technical users, and a framework for data collaboration allowing their vendor partner ecosystem to build business UI on top of the infrastructure. Samooha is a recent example of a DCR built exclusively on Snowflake. Data warehouse clean room technology adoption will keep growing rapidly.

Vendor ExamplesDatabricks, Snowflake, Google (upcoming)
Cookieless IDNo, data warehouses do not provide cookieless IDs.
ID AgnosticYes, collaboration can be done on any chosen ID.
No-code UINo, only a technical SQL interface is provided. It’s possible to leverage partner vendors integrating directly with the warehouse technology to access a business UI.

Recommended when:

  • Data is already centralized in the same cloud data warehouse technology

Avoid when:

  • Looking for business teams to access the DCR via a no-code UI

Publishers

Walled Garden DCR

The first form of a data clean room was offered by Google when they stopped sending log level data to advertisers. It was an alternative to allow advertisers to measure the performance of their ad campaigns without getting the raw data back.

Since the initial launch of Google Ads Data Hub, other walled gardens followed, and provided their own clean room technology for brands.

These are and will continue to be the only solution for brands to collaborate with walled gardens.

Vendor ExamplesAmazon, Facebook, Google
Cookieless IDNo
ID AgnosticNo
No-code UINo

Recommended when:

  • Using large advertising budgets on walled gardens and looking to run some analytics from these campaigns

Avoid when:

  • Limited spend or not using the walled garden channels

Publisher DCR

Premium publishers have recently announced their own data clean rooms, allowing brands to collaborate and get insights in a similar way they would working with walled gardens. The offering from publisher clean rooms varies greatly. Rare will be publishers who would build their own data collaboration technology without relying on existing frameworks and vendors mentioned in other categories of this blog. For example, Disney is working with InfoSum, Habu and Snowflake.

“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. Not to mention, brands worry about commingling their consumer data with publishers applying that data to help a brand’s rivals.”

Ronak Shah, Sales Director at Slalom
Vendor ExamplesDisney, NBCU, Roku
Cookieless IDSometimes, for example, NBCU launched their own identity and data platform named NBCUnified.
ID AgnosticNo, most publishers will only access a subset of identities (sometimes only one option).
No-code UISometimes, most likely to happen via the partnership with another DCR technology vendor.

Recommended when:

  • High spends on publisher channels and looking to improve performance as well as run analytics from campaigns launched on publisher channels

Avoid when:

  • Limited to no spend on channels

Data Clean Rooms on the Menu Starting 2023

Data Clean Rooms are like menu items that you can’t order alone — you need your entire table to take the same.

There is no doubt that publisher-owned data clean rooms — Walled Gardens and premium publishers — will be adopted. They have enough control to select the technology, and advertisers won’t have a choice but to follow.

But for the rest, everything has yet to play out. Publishers will want to be in the DCRs adopted by advertisers, and advertisers will need to go where publishers holding most of their ad budget are.

This chicken-and-egg situation will create a highly fragmented market for the next few years, before seeing a consolidation.

“Interoperability across the data-driven ecosystem is key when it comes to Data Clean Rooms. To benefit brands, media owners and everyone in between, InfoSum is working with partners such as ActionIQ, Google PAIR, The Trade Desk, and Amazon AWS. As an independent data clean room and collaboration platform, we want to make it easy for any data owner to collaborate with other organizations no matter where their data resides, without compromising on privacy or security. We’ve already seen incredible results, reducing costs, improving return on ad spend and increasing conversions upwards of 20%.”

Valerie Mercurio, VP of Business Development at InfoSum

Two additional types of data clean rooms will have a critical edge:

  • Data warehouses — by already hosting customer data, using their DCR framework is an obvious choice.
  • Independent pure play vendors have the benefit of promoting interoperability and offering a business interface, which is highly valuable to increase adoption in organizations.

Collaborate With a Data Clean Room, Activate with ActionIQ

Data Clean Rooms will be at the forefront of your second-party data strategy.

ActionIQ is offering a flexible composable CDP to power your first-party data strategy and activate your customer experiences across every channel.

Learn more about how we can help with your acquisition marketing and monetization use cases by getting in touch with our experts.

Florian Delval
Florian Delval
Director, Technical PMM
For the last decade, Florian’s mission has been to empower enterprise organizations in their digital transformation process via the definition and deployment of a strong Customer Experience Stack. Florian educates enterprise organizations to increase the value of their technology investments in a complex and ever changing environment. Find him on LinkedIn.
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