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WHAT IS A DATA CLEAN ROOM? WHAT DCRS CAN (AND CAN’T) DO


Phoebe Spanier|
March 21, 2023


Learn more about secure, collaborative computing Request a demo


Back


WHAT IS A DATA CLEAN ROOM? WHAT DCRS CAN (AND CAN’T) DO

Phoebe Spanier|
March 21, 2023


Learn more about secure, collaborative computing Request a demo


Post

Data collaboration between multiple parties is revolutionary, offering almost
endless potential for businesses and societies to innovate and improve. Yet it
is also fundamental, increasingly a necessity for companies to unlock the
insights they need to serve their customers effectively and maximize revenue.
Collaboration often involves sensitive data, including personally identifiable
information (PII). As a result, perhaps the greatest challenge in data
collaboration is keeping that data secure and complying with regulations, such
as the well-known General Data Protection Regulation (GDPR) and the California
Consumer Privacy Act (CCPA).

The advertising industry currently faces specific challenges around data
collaboration. In particular, five state-level laws in California, Virginia,
Colorado, Connecticut, and Utah now impose new restrictions on the collection
and use of personal data. The deprecation of third party cookies is further
altering the advertising landscape, with Firefox Mozilla and Apple Safari having
already blocked third party cookies, and Google Chrome announcing plans to do so
by 2024. All these changes limit companies’ ability to collect, use, and share
data. 

Businesses have responded to this changing landscape by investing in
privacy-preserving technology. In this context, data clean rooms have emerged as
a prominent collaboration tool. A frequently cited projection from Gartner is
that 80% of advertisers with media budgets of $1 billion or more will be using
data clean rooms by 2023. In this blog, we examine data clean rooms and their
advantages and drawbacks.


WHAT IS A DATA CLEAN ROOM?

Data clean rooms are intended to be secure environments that allow multiple
parties to collaborate using proprietary data while complying with privacy
regulations. The goal is for parties to be able to use data clean rooms without
concern over the potential risks to data that may be considered sensitive, such
as PII, device IDs, and other geographic, behavioral, audience, or contextual
data. The data that is shared in the clean room is anonymized and analyzed. In
an advertising context, data clean rooms can replace third party cookies as a
way for advertisers to match their first party data with that of other companies
and come away with useful analytics. Because data clean rooms are designed to
protect privacy, all outputs are based on aggregated data.

For example, collaboration between the buyers and sellers of digital advertising
can uncover insights into audience and behavior, helping advertisers evaluate
and refine their campaigns.

The output from a data clean room can be compared to standing outside a house
party. You can hear the beat of the music and the rise and fall of
conversations. You can see that people are dancing in time to the music. But the
window you’re looking through is frosted, so you can’t make out individual
figures.


PRESERVING DATA PRIVACY IN DATA CLEAN ROOMS

Data has three basic states: at rest, in transit, and in use. Sensitive data
such as PII is most vulnerable while in use (being processed, analyzed, or
manipulated). This is the challenge data clean rooms aim to help address.

Data clean rooms generally offer a variety of privacy features to protect data,
including the following:

 * Differential Privacy: Differential privacy leverages mathematical frameworks
   for withholding information and restricting the ability to infer data about
   individuals when sharing aggregate information and patterns.
   

 * Pseudonymization: Pseudonymization is the process of removing identifiers
   from a data set and replacing them with a pseudonym. The main aim of this
   anonymization technique is to ensure that particular data can’t be matched to
   an identifiable person unless it is combined with a separate set of
   information. (See this post on Data Anonymization Techniques for more
   information.)
   

 * Noise Injection: This technique protects individual user privacy by adding
   “noise,” or irrelevant data, into a data stream. For example, when gathering
   product search history, an example would be to add random but plausible
   activity in the browser.  


TECHNOLOGIES COMBINED WITH DATA CLEAN ROOMS

Companies often use Data Clean Rooms in combination with other technologies for
managing customer data and ensuring privacy. Following are a few of the most
common examples.


CUSTOMER DATA PLATFORMS (CDPS)

According to an IAB-commissioned Ipsos report, 84% of data clean room users in
the digital advertising space are also using CDPs. A CDP is a marketing software
application that unifies a company’s customer data from all channels. CDPs can
guide the timing and targeting of messages and engagement activities of
customers, and support analysis of behavior at an individual level. Data clean
rooms can be used within CDPs to support, for example, advertising measurement.


IDENTITY RESOLUTION

Identity resolution (IDR) aims to link records across one or more datasets
(usually from multiple parties) that refer to the same individual. IDR providers
use match keys, such as an email, cookie, or IP address, to identify when two
records refer to the same individual or household.


CONFIDENTIAL COMPUTING

Though not strictly defined as privacy enhancing technologies (PETs) themselves,
data clean rooms are often used in conjunction with PETs or with other
privacy-preserving technologies. 

Confidential computing is a hardware-based technology designed to protect data
in use. While this approach to enhancing data security in the cloud is cutting
edge and still developing, confidential computing is viewed as having great
potential when paired with data clean rooms to protect data while it is being
processed or analyzed.


TYPES OF DATA CLEAN ROOMS 

Data clean rooms are not a homogenous offering. Following are a few basic
categorizations for data clean rooms.


WALLED GARDEN 

Walled gardens are perhaps the most familiar type of data clean room. Google,
Amazon, Facebook all provide hashed and aggregated data to companies that use
their advertising platforms in order to evaluate advertising performance. These
clean rooms are “walled” and do not provide a cross-platform view.

Another way of cross-sectioning data clean room offerings is by distinguishing
between self service and managed service. 


SELF-SERVICE 

Self-service clean rooms provide access to the technology platform only, and do
not offer support in collaborating with partners. This option is attractive for
companies that need more granular data about their audience and how that fits
with data-sharing partners, and have the resources to handle data partnerships
at scale and assume liability for data mishaps.


MANAGED SERVICE 

With a managed service offering, companies upload data and the clean room
provider manages all the data partnerships inside and outside their platform.
The considerations are the opposite of self service: The company is not
responsible for coordinating data sharing or legal liability, yet they generally
cannot access more granular data.

For instance, a managed service clean room might relay what percentage of the
data shared with a partner audience is aligned, which can help with media buying
decisions; but it won’t say which specific hashed emails did not align.


CONCLUSION

Data clean rooms are critical to the data analytics process of any industry. The
importance of a clean room cannot be understated, as it is the key to the data
analytics process. A clean room will often have staff working around the clock
ensuring that data is correct, secure, and private. From historical stock prices
to medical records, a clean room is essential for any businesses handling large
amounts of sensitive information.

We explored the different types of data clean rooms – and what they do and don’t
do for businesses. Stay tuned for the next post in our series, “Data Clean
Rooms: Advantages and Disadvantages.” 

Want to jump right into a deep dive of DCRs and considerations when choosing a
DCR? Check out our eBook, “The Privacy Professional’s Guide to Data Clean
Rooms.”

You might also like


DATA CLEAN ROOMS: ADVANTAGES AND DISADVANTAGES

Phoebe Spanier March 28, 2023


INTEL, DUALITY, AND SECURITY IN LIFE SCIENCES 

Emory Walsh March 13, 2023


DUALITY DEEPENS INVESTMENT INTO GOVERNMENT SECTOR

Marcella Arthur February 23, 2023


SECURE FEDERATED LEARNING: PROTECTING THE DATA AND THE MODEL

Omer Moran February 22, 2023
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