Let’s set the context: Privacy is the new currency of a world that runs on data. Regulations like GDPR, CCPA, and HIPAA have cinched the noose on how companies collect, store, and use customer information. Meanwhile, businesses, especially B2B businesses, will need to open up insights from the data to survive. Enter data clean rooms—a solution that lets companies share and analyze data safely, but not break any laws or lose control over the data in the first place.
So what is a data clean room, and how does it work? Why is it critical for B2B SaaS companies? And what might this mean for marketers trying to navigate stormy seas of modern privacy regulation?.
What Is a Data Clean Room?
It is essentially to know what a data clean room is: a vault—a controlled, safe space where two or more companies can bring in data, mix it together, and extract insights without ever revealing sensitive information about individual customers. That’s essentially what a data clean room is: the neutral environment, compliant with the intention of privacy, where first-party data can be combined with data from other sources—a publisher, an advertiser, multiple partners—to analyze and measure marketing performance or customer behavior.
| “And as each month progresses into the privacy winter, the return on the ad spend equation gets worse. Demand is growing for data clean rooms as a way to replace some of the capabilities of third-party cookies, but in a safer, more private way” – Juan Mendoza |
Why Do Data Clean Rooms Matter?
So, why all the buzz around data clean rooms, especially in B2B ? The short answer: the fall of third-party cookies and the tightening grip of privacy regulations. Let’s break it down.
- Cross-domain tracking is dead.Platforms like Google Chrome and Safari have already closed the third-party cookie door. Solutions such as Apple’s IDFA and Android’s GAID are, by and large, a relic of the past, leaving marketers in the dark about user behavior across channels.
- Privacy laws are getting stricter. From GDPR in Europe to CCPA in California, data privacy laws evolve by the day, imposing punishing penalties for violations. It is increasingly difficult to gather and utilize customer data.
Traditional customer journey tracking and understanding no longer works. Marketers now have to rethink their approaches, and here lies the lifeline in data clean rooms.
| Challenge | Impact | Solution |
| Deprecation of third-party cookies | Limited ability to track users across domains | Data clean rooms allow secure, privacy-compliant data-sharing |
| Tightening privacy regulations | Higher risk of fines for non-compliance | Data clean rooms ensure compliance while enabling data analysis |
How Do Data Clean Rooms Work?
Now, let’s get into the nuts and bolts of how a data clean room operates. Picture this: two companies, say an advertiser and a publisher, come together with their first-party data. The data doesn’t have to be the same—it could be user emails for one party and website behavior for the other. But these datasets do need to share a common identifier (like hashed emails) to match records.
Here’s the step-by-step breakdown:
- Data Collection: The first-party data from both parties is collected, often at the user level. These datasets are then anonymized or hashed to protect personal information.
- Data Matching: The clean room environment uses identifiers (such as hashed emails) to match records from both datasets.
- Data Enrichment: The matched data is enriched, meaning the two datasets are merged to provide a more comprehensive view of the customer.
- Data Analysis: Marketers can then analyze the enriched dataset to extract insights about campaign performance, customer demographics, and more.
- Data Activation: Finally, the cleaned and enriched data can be used to drive personalized marketing campaigns, measure attribution, or even inform product development.
The beauty of this process is that both parties only see the insights—not the raw data itself. The rules of engagement are predetermined, meaning the clean room operator ensures that data stays secure, and no sensitive information is exposed.
Data Clean Room Use Cases
Data clean rooms aren’t just a privacy solution—they’re a goldmine for marketers and B2B SaaS companies looking to supercharge their strategies. Here are some common use cases:
- Profile Enrichment
- Let’s say you’re a SaaS company that offers cloud-based solutions for retailers. You have some great first-party data on customer transactions, but you’re missing psychographic insights—like what drives your customers to buy. In a data clean room, you could partner with a credit card company or a data provider like Experian to enrich your customer profiles with behavioral insights. This will allow you to create more personalized marketing campaigns.
- Audience Analysis
- Imagine two companies—an airline and a hotel chain—want to launch a co-branded campaign. By sharing their first-party data in a clean room, they could identify overlapping customers who have flown with the airline and stayed at the hotel. This enriched data set could be used to target a more refined audience with highly personalized offers.
- Measurement and Attribution
- Data clean rooms are also a key tool for understanding marketing attribution. For example, if a skincare brand wants to know how its ads on a publisher’s platform are performing, it can use a clean room to match its customer data with the publisher’s audience. This helps the brand calculate its return on ad spend (ROAS) and optimize future campaigns.
| Use Case | Example | Benefit |
| Profile Enrichment | Retailer enriching customer profiles with Experian data | More personalized marketing efforts |
| Audience Analysis | Airline and hotel identifying overlapping customers | Refined audience targeting |
| Measurement & Attribution | Skincare brand matching conversions to publisher data | Better marketing performance insights |
Benefits of Using a Data Clean Room
There are several reasons why data clean rooms are gaining traction, particularly among B2B SaaS companies.
1. Data Privacy
In a world where the cost of privacy breaches can run into millions, data clean rooms offer a way to comply with regulations while still unlocking valuable insights from customer data.
2. Data Ownership
A clean room ensures that companies maintain control over their data. Both parties retain ownership of their datasets, which means they can collaborate without having to hand over sensitive customer information.
3. Deeper Analytics
More data equals better insights. A data clean room allows companies to combine their data and analyze it more deeply than they could if they were relying solely on their first-party information.
| Benefit | Description |
| Data Privacy | Ensure compliance with laws like GDPR and CCPA while still analyzing data |
| Data Ownership | Retain control over sensitive information even when sharing data |
| Deeper Analytics | Combine multiple datasets for richer insights and better decision-making |
Types of Data Clean Rooms
Not all clean rooms are built the same. There are three primary types of data clean rooms:
- Media Clean Rooms: These are offered by major ad platforms like Google and Meta. They allow advertisers to match their first-party data with platform data to gain insights into campaign performance. However, the downside is that these are “walled gardens,” meaning the data is restricted to the platform’s ecosystem.
- Private Clean Rooms: Large companies like Disney or Spotify often operate their own private clean rooms. These clean rooms allow them to match customer data across their various properties without sharing it with external parties.
- Clean Rooms as a Service: Companies like Habu, Snowflake, and Databricks offer clean rooms as a service, allowing any two or more organizations to securely share and analyze data.
| Type | Description | Example |
| Media Clean Rooms | Offered by major platforms like Google or Meta | Google Ads Data Hub |
| Private Clean Rooms | Operated by large companies for internal data sharing | Disney’s Private Clean Room |
| Clean Rooms as a Service | Offered by AdTech companies to any organization needing clean rooms | Habu, Snowflake, Databricks |
Brands Embracing Data Clean Rooms
More and more brands are jumping on the clean room bandwagon. Companies like Disney, Spotify, and Amazon have already invested heavily in clean room technology. These companies understand that privacy regulations are only going to get stricter, and they’re taking proactive steps to ensure they can continue to glean insights from data without violating any laws.
Amazon, for example, uses its own Amazon Marketing Cloud as a data clean room for advertisers to track and analyze campaign performance. Similarly, Meta’s Facebook data clean room allows advertisers to measure the effectiveness of their ads while maintaining user privacy.
What’s Next for Data Clean Rooms?
Data clean rooms will only play a more important role as we enter the data-privacy age. Companies will increasingly have recourse to third-party providers to create custom clean rooms, and encryption and data-matching technologies will advance to further secure this environment.
In B2B SaaS, data clean rooms will be the new standard in marketing strategies. Marketers will gain better insights into consumer behavior by utilizing them to optimize campaigns while ensuring compliance with data privacy.
