Hubspot Custom Styles
October 11, 2022
James Prudhomme

You Need a Data Clean Room, Not Just a Customer Data Platform, for Effective Advertising

If you’re looking to consolidate your tech stack and believe that because you have a Customer Data Platform (CDP) you don’t need a Data Clean Room (DCR), think again.

Data Clean Rooms

Far from being competitive, data clean rooms and customer data platforms are complementary. If you’re serious about maximising the value of your audience data and digital advertising, you need both.

Traditionally, when it came to managing data and building advertising audience segments, particularly for online acquisition, Data Management Platforms (DMPs) ruled the roost. But things are changing.

While DMPs mainly rely on third-party data to build audiences, increasing privacy legislation and the dismantling of third-party cookies and device identifiers mean cultivating and harnessing first-party data is now critical. And, in addition to acquisition, retention, engagement and personalisation are now key focuses as brands tackle changing customer journeys that are non-linear, fluid and fragmented.

Additionally, shifts to identity-based experiences - dealing with multiple forms of dynamic identity and recognising individuals’ myriad connected devices, emails and other identifiers - require new approaches to managing this complexity. The result is that CDPs have come to the fore.

These allow data supply chains to be connected and the data normalised, providing a centralised, real-time source of truth that enables publishers and brands to gain data sovereignty and deliver effective data strategies.

Unlocking the value of data

As publishers and brands wrestle with the changes occurring in the digital advertising environment and address the loss of traditional data signals by bolstering their first-party data, simply collecting, collating, controlling, safeguarding and managing the data isn’t enough. What’s also critical is amplifying its value to deliver effective data-driven advertising and achieving this relies on partnerships.   

In a perfect world, the many CDPs available today would employ the same standards and be built on open-source software so their users could easily partner with the customers of any other CDP. But we don’t live in a perfect world, and this is where DCRs - or, to describe them more accurately, Data Collaboration Platforms (DCPs) - play a crucial role.

Today, successful advertising is only possible through direct collaboration with partners, be they publishers, brands, or agencies.

DCRs act as middleware, allowing users to facilitate secure data connections with trusted partners to capitalise on the value of data in delivering personalised advertising, while maintaining security and privacy – all without putting personally identifiable information at risk.

In this way, DCRs unleash the value of first-party data, turning it into a competitive advantage for the data owner. For advertisers, this means achieving better results from ad campaigns by activating their data and measuring success. For publishers, it means leveraging the value of their own first-party data to allow advertisers to deliver more effective advertising, without exposing it through the bidstream or identity graph.   

It’s not just about connectivity. DCRs must achieve this in a frictionless manner, so users can collaborate with any partner they choose. 

Closed systems stifle collaboration. A true DCR offers interoperability, flexibility and ease of use, utilising open-source, decentralised approaches so users can create rooms and invite parties to collaborate directly, irrespective of the platform they are using.

In a cluttered advertising ecosystem, DCRs must remove complexity and make the whole process - from inviting collaboration and data onboarding, through to activating it and measuring success - simple and quick. Essentially, they become the mechanism for leveraging the first-party data stored in a CDP.

That’s why we developed our solution: to remove barriers, facilitate easy collaboration and provide a frictionless, platform-agnostic approach to delivering the data-driven digital advertising of the future. 

Don’t think one or the other

So when it comes to debates around CDPs vs. DCRs, it’s not a question of either/or, but both. 

As first-party data and IDs replace the old ways of doing things, CDPs are essential for managing the data complexities. However, advertising success centres on connecting this data with other partners. It’s independent DCRs, like Optable, that provide this critical frictionless collaboration environment so the data can be activated and its value realised, for the benefit of the whole industry. 

DCRs and CDPs play crucial but different roles in fixing today’s broken ecosystem and helping tie everything together. So if you think, ‘Do I really need a DCR if I have a CDP?’ - the answer is a definitive ‘Yes’.