- Data clean rooms are becoming crucial privacy-preserving technology, but their implementation challenges smaller agencies, brands, and publishers.
- The compounded annual costs of implementing DCRs alongside other privacy-preserving technologies can exceed $2 million.
- The industry requires all data providers to make their data interoperable to maximize the effectiveness of DCRs.
The IAB’s annual State of Data report reveals that the costs and talent required for the implementation of data clean rooms (DCRs) create challenges for smaller agencies, brands, and publishers. The report found that compounded annual costs for DCRs and other privacy-preserving technologies can exceed $2 million. Despite the high costs, companies are expected to invest 29% more in 2023 to maximize their DCRs, according to Jeffrey Bustos, VP of Measurement, Addressability & Data at IAB.
Less than a third of DCR users are currently leveraging advanced measurement capabilities such as attribution, ROI/ROAS measurement, media or marketing mix modeling, propensity modeling, and predictive analysis. Over half of DCR users (52%) cite leveraging results or proving ROI as a challenge. Additionally, about a third of DCR users face data interoperability, internal resource, and privacy challenges when using DCRs.
The report shows that the cost and talent requirements to successfully implement DCRs disadvantage small agencies, brands, and publishers that lack the resources to invest at these levels. Nearly half of DCR users have six or more employees dedicated to the technology, and almost two-thirds (62%) of users spent a minimum of $200,000 on the technology in 2022.
IAB CEO David Cohen emphasizes the need for all data providers to make their data interoperable to enable advertisers to measure full campaign effectiveness and ROI. He also calls for closed ecosystems to provide access for advertisers to effectively analyze their campaign activity. The IAB Tech Lab is set to announce its first DCR specification in Q1 to support and define interoperable cleanroom interactions for digital advertising.
In conclusion, DCRs offer innovative, privacy-preserving capabilities but require significant talent, cost, and setup investments. This creates challenges for smaller agencies, brands, and publishers who struggle to keep up with the investment levels required for successful implementation. Download IAB’s 2023 State of Data Report to read the full insights.
To make the most of data clean rooms (DCRs), the industry needs all data providers to make their data interoperable so that advertisers can measure full campaign effectiveness and ROI.
David Cohen, Chief Executive Officer, IAB.
24, Jan. “Data Clean Rooms Are Now Essential for Audience Insights, Measurement, and Data Activation According to IAB State of Data Report.” IAB, 24 Jan. 2023, https://www.iab.com/news/state-of-data-2023-report-data-clean-rooms/.