View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Policy
  2. Privacy and data protection
January 13, 2023updated 12 Jan 2023 5:12pm

The rise and rise of data clean rooms

The software promises a secure, privacy-friendly way to analyse customer data. But some fear that its capabilities are being overhyped.

By Afiq Fitri

The safe collection and analysis of customer data has become a tricky business. Recent years have seen scandal after scandal involving the leakage of personal information about customers at ever-increasing scales, along with the implementation of ever-stricter legislation designed to regulate corporate retention of such data in the interests of the customer. It was out of this tug of war between the business necessity of analysing customer information and inherent public suspicion of the practice that the data clean room was born: tailor-made software designed to support two or more parties to analyse and share customer data, but only allowing it to leave the software after it’s been scrubbed clean of all identifiable information.  

It’s an idea which is finally being given its due by big tech. In November last year, Amazon Web Services announced the launch of its own clean rooms product, capable of creating a secure data clean room in minutes to”generate unique insights about advertising campaigns, investment decisions, clinical research, and more”. A month before Amazon’s announcement, Google also launched its Publisher Advertiser Identity Reconciliation, or PAIR, a similar solution which allows its users to secure first-party data. 

Data clean rooms in practice

More than simply affording companies a secure receptacle for analysing customer information, data clean rooms also allow clients to partner up with other stakeholders to take a look, too. According to one such vendor of the technology, InfoSum, Channel 4 was able to create a picture of “high-value prospects” by matching their audience data with Deliveroo’s customer data in such a secure environment, after having removed all personal information of their respective customers. Deliveroo managed to increase its sign-ups by 20% through this partnership using a data clean room, InfoSum claimed. 

Others are keen to stress the different kinds of solutions to these lingering questions about privacy offered by data clean rooms. “We’re responding to those needs with features such as cryptographic computing,” said Andy Solomon, global head of data collaboration and interoperability solutions for advertising and marketing at Amazon. “Cryptographic computing allows customers who use AWS to encrypt their data at the source, so the data is encrypted at all times.”

However, while these solutions sound like a silver bullet for an industry that has been besieged by landmark privacy laws, some have raised concerns about the supposed iron-clad privacy that data clean rooms provide. “[C]lean rooms are designed to allow secure data sharing, but they’re not bulletproof when it comes to things like compliance, [which] varies from industry to industry,” wrote Michael Schoen, executive vice president for Neustar, in a recent piece for Forbes. “On top of that, there are different types of clean rooms, so it’s become a confusing, messy landscape.”

Barriers to adoption

Another barrier to the adoption of data clean rooms lies in the suspicion among potential users that the software is an overly complicated boondoggle that advertisers and marketers can do without. “This perception of data clean rooms being cumbersome means there has been reluctance by some to get involved,” Vihan Sharma, managing director at ad-tech vendor LiveRamp, told Digiday – which probably explains why, according to data clean room vendor Habu, 53% of marketing professionals surveyed had never used one in the first place.  

This attitude can be traced back to the marketing tactics of data clean room vendors themselves, campaigns which appear to promise to solve everything from privacy issues to the optimisation of budgets. “Providers too often present data clean rooms as some magical smorgasbord of high-tech data manipulation techniques that will solve all your problems and soothe your CFO’s concerns about the future of the marketing budget,” said Schoen. “The problem with that approach is that it’s often overwhelming for marketing decision-makers who don’t typically have a background in data science, computer networking or advanced cryptography.”

As such, there’s little consensus yet on whether data clean rooms are the best tool for companies and marketers looking to divine new insights from customers without recourse to violating their personal privacy. But it’s something, say certain industry observers, even if such products promise the stars but only end up delivering the Moon. Data clean rooms “can make… privacy compliance analysis significantly easier and potentially reduce your compliance burden,” wrote R Bisi Adeyemo and Aaron Goodman of the legal practice Bakerhostetler late last year. “But it doesn’t mean you can forego the analysis.” 

Content from our partners
Sherif Tawfik: The Middle East and Africa are ready to lead on the climate
What to look for in a modern ERP system
How tech leaders can keep energy costs down and meet efficiency goals

Read more: New consultation could delay UK’s post-Brexit data laws

Topics in this article :
Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.
THANK YOU