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NEW YORK \u2013 January 24, 2023 \u2013 <\/strong>The continuing wave of inconsistent state level privacy legislation, coupled with increased signal loss, has set the stage for data clean rooms (DCRs) to become an indispensable privacy-preserving technology.<\/p>\n However, the significant investments in talent, technology, and data setup required to implement DCRs create significant challenges for smaller agencies, brands, and publishers.\u200b<\/p>\n These are among the conclusions from IAB\u2019s annual State of Data report from the Measurement, Addressability & Data Center, titled \u201cState of Data 2023: Data Clean Rooms & the Democratization of Data in the Privacy-Centric Ecosystem.\u201d<\/p>\n The report, conducted on IAB\u2019s behalf by Ipsos, features insights gleaned from over 200 completed surveys and 20 in-depth interviews among data decision-makers at brands, agencies, and publishers\/retailers about how privacy-preserving technologies are being managed and activated.<\/p>\n Unveiled during IAB\u2019s Annual Leadership Meeting, the report found that DCRs are typically used with other privacy-preserving technology. As a result, compounded annual costs can soar above $2M. \u200b\u200bFor example, while more than 80% of DCR users are using CDPs (customer data platforms) and DMPs (data management platforms), roughly half are using identity solutions and CMPs (consent management platforms).<\/p>\n \u201cSo far, most companies are using DCRs for privacy controls, matching data for collaboration, and data activation,\u201d said Jeffrey Bustos, Vice President, Measurement, Addressability & Data, IAB<\/strong>. \u201cBut that only scratches the surface of what\u2019s possible.\u201d Less than a third of users are using DCRs\u2019 advanced measurement capabilities, including attribution, return on investment (ROI) \/ return on ad spend (ROAS) measurement, media or marketing mix modeling, and propensity modeling and predictive analysis.<\/p>\n \u201cCompanies expect to invest 29% more in 2023 to make the most of their DCRs, and that\u2019s really encouraging,\u201d added Bustos. \u201cThere 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\u2019s required and ramping up their investments accordingly.\u201d<\/p>\n The report reveals that while DCRs offer innovative, privacy-preserving capabilities, they are far from being turnkey technology. They require steep and ongoing investments in talent, cost, and setup, spanning everything from data infrastructure and connectivity to onboarding. More than half of DCR users (52%) cite leveraging results \/ proving ROI as a challenge. About one third of DCR users are also facing data interoperability \/ customization (39%), internal resource (38%), and privacy (32%) challenges when using DCRs.<\/p>\n The cost and talent requirements to successfully implement DCRs creates a tremendous market disadvantage for small agencies, brands, and publishers that don\u2019t have the resources to invest at those levels\u2014and may weaken the trend toward in-housing.<\/p>\n The report also includes detailed information about what advertisers, brands, and publishers need to know as they begin their journey, including hurdles and opportunities for growth; privacy-preserving technology considerations and best practices; and understanding the benefits and use cases of DCRs.<\/p>\n \u201cTo 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,\u201d said David Cohen, Chief Executive Officer, IAB<\/strong>. \u201cThere should be no exceptions. It\u2019s in everyone\u2019s interests for closed ecosystems to provide access so that advertisers can effectively analyze their campaign activity. Advertisers need a window into the data.\u201d<\/p>\n Through industry collaboration, innovation, and education, IAB and IAB Tech Lab strive to make it easier for advertisers to understand and use DCRs. In Q1, IAB Tech Lab will announce its first DCR specification to support and define interoperable clean room interactions for digital advertising. Developed within IAB Tech Lab\u2019s Rearc Addressability Working Group, it will be the first of a library of purpose-built, DCR specifications to support and define interoperable clean room interactions for digital advertising.<\/p>\n For more information, please visit https:\/\/iab.com\/state-of-data and to download the \u201cState of Data 2023: Data Clean Rooms & the Democratization of Data in the Privacy-Centric Ecosystem,\u201d click here.<\/p>\n About IAB<\/strong><\/p>\n The Interactive Advertising Bureau empowers the media and marketing industries to thrive in the digital economy. Its membership comprises more than 700 leading media companies, brands, agencies, and the technology firms responsible for selling, delivering, and optimizing digital ad marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, IAB develops technical standards and solutions. IAB is committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., the trade association advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, IAB is headquartered in New York City.<\/p>\nDCR Adoption Investment is Significant<\/h4>\n
Investing to Unlock The Next Level of Functionality<\/h4>\n
Some Growing Pains<\/h4>\n
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Calling on All Advertising Participants (including Walled Gardens)<\/h4>\n