IAB Says Data Clean Rooms “Essential” For Digital Advertising

The Interactive Advertising Bureau (IAB) has released its annual State of Data report for 2023 which revealed, among other things, how essential data clean rooms (DCRs) will be for privacy-first advertising.

However, it’s not all good news. While DCRs will be come indispensable this year, the “significant investments” in talent, technology, and data setup required to create them will provide big problems for smaller agencies, brands, and publishers.

The report, conducted by Ipsos on IAB’s behalf, is based on more than 200 surveys and 20 in-depth interviews with data decision-makers at brands, agencies, and publishers/retailers.

The report found that DCRs are typically used with other privacy-preserving technology and, consequently, the compounded costs of the tech can spiral to more than US$2 million per year.

“So far, most companies are using DCRs for privacy controls, matching data for collaboration, and data activation,” said Jeffrey Bustos, vice president, measurement, addressability & data, IAB.

“But that only scratches the surface of what’s possible.”

According to the IAB less than a third of people are using DCRs’ advanced measurement capabilities, including attribution, return on investment (ROI) / return on ad spend (ROAS) measurement, media, or marketing mix modelling, and propensity modelling and predictive analysis.

“Companies expect to invest 29 per cent more in 2023 to make the most of their DCRs, and that’s really encouraging,” added Bustos.

“There is growing demand due to loss of signals, and wanting to share data with partners without sharing sensitive data. This may show that companies are understanding what’s required and ramping up their investments accordingly.”

The report called on everyone involved in advertising to make data interoperable to ensure that DCRs are effecting across the industry — not just reserved for the bigger players.

“To make the most of DCRs, the industry needs all data providers to make their data interoperable so that advertisers can measure full campaign effectiveness and ROI,” said David Cohen, Chief Executive Officer, IAB. “There should be no exceptions. It’s in everyone’s interests for closed ecosystems to provide access so that advertisers can effectively analyse their campaign activity. Advertisers need a window into the data.”

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