Commerce Explainer: Data Clean Rooms
We keep hearing about “data clean rooms.” What are they?
One of our themes this year is how DCA members are moving fast to adapt to a changing data environment. Third-party cookies are going away while regulatory and other constraints change the landscape for how data is managed. Yet consumers still demand tailored offers in a low-friction user experience. This is easier to deliver when we know more about the consumer, and companies still believe they can deliver it with permissioned data handled to a high standard of compliance. But how? Sometimes the answer involves data clean rooms.
A Little Necessary History
The first, and literal, use of a “clean room” refers to a manufacturing or research environment that is literally very clean: nothing gets in (chip fabrication) and nothing gets out (nuclear engineering).
The term “clean room software development” was then coined to describe a technique for writing software by separating the development team from competitors’ proprietary information. This can provide a defense to claims of copyright infringement.
Down and Dirty: So What’s a Data Clean Room?
The principles of non-contamination and separating data sets for legal reasons are both behind the idea of a “data clean room.” Because of intensifying privacy concerns, companies need a data collaboration environment that extends privacy controls to their partners. Data clean rooms do that – they allow sensitive data to be isolated so partnering companies have access only to a narrow field of necessary data. This is sometimes called the principle of “least privilege,” meaning a user has access only to the data necessary to accomplish a task. Processes in a data clean room are wrapped in privacy enhancing technologies of various kinds designed to keep data where it belongs.
For a lighter take on this topic, this fun little video by Digiday describes data clean rooms by analogy to peanut butter in a kitchen cabinet. If you’re looking for all the details, this white paper by iab Tech Lab lays them out.
On September 20th, DCA is convening a Data Exchange Roundtable – data clean rooms are sure to be a key topic of conversation.
Digital Music Sales, Innovation Diffusion, and Better Credit Scores
This week I had some thoughts on how innovative products move – why they move fast in some places and slow in others – and how innovators like VantageScore may see varying rates of adoption based on the legacy systems of their customers. My thoughts on the matter are laid out in the DCA blog . . .
