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Outside of generative AI (GenAI), data clean rooms are the hottest trend in tech as organizations gear up for a privacy-first world. Adoption is growing, and AWS Clean Rooms has rapidly emerged as a leading solution in this category. With the suite of newly released features by AWS, usage of this groundbreaking solution should surge as organizations explore this important technology to build next-gen advertising and marketing applications.

Preparing for a privacy-first future

The online marketing world of the past 25 years is rapidly winding down as we enter a more secure and protected era. People are unhappy with how their personal identifiable information (PII) is being handled, and they think cookies, pixels, and other tracking tools tech firms use are intrusive. Governments are responding by passing sweeping privacy statutes to safeguard consumer data, which is affecting the digital ecosystem.

Notable industry changes include Google’s plans to deprecate third-party cookies in Chrome, the world’s most popular browser with 63.1 percent market share, beginning in Q1 2024, ahead of a complete phaseout in the second half of 2024. Today, 80 percent of advertisers rely on third-party cookies to deliver targeted messages to their prospective audiences.

Apple’s App Tracking Transparency (ATT) framework requires apps to request permission to track across applications, and Apple’s iOS 17 data privacy measures take things one step further with Link Tracking Protection (LTP) removing URL tracking parameters from campaign links accessed in Mail, Messages, and Safari. This prevents cross-website tracking, making it increasingly difficult for advertisers to evaluate campaign performance.

Addressability challenges for advertisers

Although full cookie deprecation is still about a year in the future, brands are already experiencing fewer effective ads and lower return-on-ad-spend (RoAS) as changes roll out. Addressability levels have reportedly plunged to as low as 30%, reports Adweek. These trends will undoubtedly continue, and “Advertisers who think the end of third-party cookies is some sort of future state are already behind,” recently quipped Dan Taylor, VP of global ads at Google.

Faced with dramatic signal loss, marketers face a crisis as they lose the ability to deliver relevant, personalized content. “The digital marketing world has been thrown into an existential crisis as its way of working — powered by third-party cookies and programmatic advertising — is turned upside down,” said Shiv Gupta, founder of U of Digital LLC.

In light of these changes, some companies are changing the narrative from privacy as an obligation to privacy being an important mechanism to burnish brand perception and offer much-needed intellectual property protection. At a recent conference, Apple CEO Tim Cook said, “We believe that people have a fundamental right to privacy,” and Apple has made privacy a core tenet of its brand. Similarly to Apple, other leading organizations are seeing privacy as an opportunity to earn their customers’ trust and build long-standing relationships.

To elevate privacy, many organizations are investing in new solutions to engage with consumers while safeguarding their data, as well as the company’s intellectual IP. Data clean rooms are rapidly emerging as an important data collaboration tool for a more secure and protected digital world.

AWS Clean Rooms: Privacy-first data collaboration

AWS Clean Rooms helps marketers and their partners more easily and securely collaborate and analyze their collective datasets — without sharing or copying underlying data, including consumer data.

AWS Clean Rooms supports a broad spectrum of marketing, advertising, and customer experience (CX) use cases, for example …

• First-party data enrichment: Enables advertisers to use existing data to enhance advertising efficiencies while layering in signals from second- and third-party sources in a privacy-compliant manner.
• Audience analysis: Analyzes audience behaviors through cross-platform overlaps, incrementality, and insight into audience attributes to inform segmentation.
• Segmentation and activation: Unlocks insights from first-party data to identify and activate high-value audience segments within advertising platforms.
• Enhanced measurement: Paints a clearer picture of advertising performance within ad platforms, informing decisions on campaign efficacy without compromising consumer privacy.

AWS Clean Rooms 2.0: New features and functionality

AWS has recently introduced a new set of capabilities to help marketers and their partners drive advanced clean room use cases, including:

AWS Clean Rooms ML

Many publishers are future-proofing their technology stacks to monetize the full potential of high-quality ad inventory. AWS Clean Rooms ML modeling helps publishers improve advertising effectiveness and boost RoAS by providing a powerful set of capabilities, paired with an easy-to-use interface to pinpoint the right users for an ad campaign while protecting sensitive data with a privacy-first solution. With this new service, users can apply privacy-enhancing ML modeling on collective datasets to unlock predictive insights with partners without sharing underlying data because these operations are being performed in a clean room environment.

AWS Clean Rooms Differential Privacy

Because privacy is critical for consumers today, brands expect their customers’ PII to be safeguarded in data collaborations. Differential Privacy for AWS Clean Rooms can save hundreds of hours previously spent vetting partners and preapproving clean room queries, unlocking tremendous value for brands. This new service is a fully managed capability that helps protect user privacy with mathematically backed and intuitive controls in a few clicks.

Identity resolution (IDR)

The discipline of creating addressable customer profiles by recognizing people across channels and devices, IDR has grown in importance because brands are making unprecedented investments in first-party data. Launched last July, AWS Entity Resolution matches, links, and enhances records using a flexible, configurable rule-based, ML-powered data service that optimizes record matching. Using AWS Entity Resolution and AWS Clean Rooms together helps customers resolve user records at a higher rate, improving data quality for analysis and collaboration to generate incremental insights for smarter activation and more holistic measurement.

Looking toward the future

While data clean rooms are a new technology and overall adoption is still relatively low, their popularity is on the rise, and it’s expected that most advertisers with media budgets of $1 billion will have a data clean room by the end of this year.

Predictions aside, looking across the world of advertising and marketing, we’re still in the early stages in terms of this technology’s rollout. Even among organizations that have already stood up clean rooms, few have yet uploaded first-party data to the platforms. As such, these brands are barely scratching the surface in terms of advanced use cases or functionality, blunting potential impact.

Slalom is a launch partner for the newly announced AWS Clean Rooms Differential Privacy and AWS Clean Rooms ML. Slalom has been an early adopter of AWS Clean Rooms and was a launch partner when the service was announced in July 2022. Slalom is also a partner for AWS Entity Resolution and is committed to supporting AWS’s Advertising & Marketing initiative, a broader program to help brands and agencies navigate the trends discussed in this piece. Slalom is thrilled to work with AWS to help leading brands future-proof their advertising and marketing capabilities.