Apr 8, 2022

Ease Distrust in Advertising with Data Clean Rooms & PII Vaults

Advertising has been driven by customer data since the birth of advertising. Selecting an audience, bidding and paying for an ad, the medium, response measurement – every aspect of enticing a group of people to buy a product or service is dependent on customer data.

In a data-driven economy, it’s perfectly natural for customer data to play a starring role. But as advertising moved into the digital space, the context attached to customer data has largely eroded. What is often overlooked is how – or whether – an advertisement enhances a customer’s overall experience as the customer engages with the ad. From the customer’s perspective, advertisers and publishers often seem more interested in clicks, opens, and views than how an ad aligns with their customer journey.

Irrelevant ads, ads that seem to violate a customer’s privacy, and false advertising/phishing attempts all conspire to foment a general distrust in advertising. Infighting between advertisers and publishers, each of whom accuses the other (and third parties) of misrepresenting data, doesn’t help matters. The lack of trust becomes endemic; advertisers don’t trust publishers, publishers don’t trust advertisers, neither trusts results, and the customer presented with an ad is skeptical that the process looks after their best interests.

With the state of digital advertising approximating the Wild West in terms of how customer data is collected and used, customers are circling the wagons to keep their precious data away from bad actors. Interested in having more control over their data, customers increasingly demand permissions, opt-outs, data contracts and other mechanisms to better manage how their data is used.

Honor Customer Expectations – or Face Consequences

Before examining a possible way out of the morass, let’s look at the extent of the problem. Consider a Harris Poll survey commissioned by Redpoint, where 73 percent of consumers surveyed said it is either very important or essential that a brand reveal how the information being collected about them is being used – and 71 percent said that it is up to the customer to provide explicit authorization for how the data will be used. Customers are leery, in other words, that brands have their best interest in mind vs. an interest in selling their data to a third party for marketing or advertising purposes. Furthermore, 88 percent of customers said they are likely to switch brands if the brand sells their data to another company for marketing/advertising purposes without their authorization.

Data privacy regulations such as GDPR and CCPR are good faith attempts to protect customer rights, but advertisers and publishers seem to be trying to stay one step ahead of the posse, if you will, for continuing to monetize customer data. Knowing that customers are staking a bigger claim on protecting their data, they present confusing opt-in/opt-out forms or options, cookie-less identifiers, bait-and-switch tactics and other methods that all seem, to customers, as attempts to breach the perimeter, probing weak spots for further illicit use of their data.

First-Party Data to the Rescue

How, then, is trust restored so that everyone – the customer most of all – feels better about the process? Instead of continually probing for weak spots, feints, or loopholes, a better option is to simply take the bull by the horns. Rather than dance around the problem, address it head on by re-thinking and re-working what a customer interaction should look like. Bring context back to advertising, in other words, with a renewed focus on first-party customer data.

This tactic works easily for a brand-owned site, of course. In this case, the value exchange is at play where customers provide personal data and in return the advertiser provides a more relevant, personal ad. Improving the first-party advertising experience with ads in the context of a customer journey can help alleviate the animosity between parties with goals that may be at odds.

For a third-party advertising site, however, the way to become more relevant is to collect more contextual information on visitors to the site and use that context to target the right audience. This means using content affinity – pages read, links followed, searches performed – to gauge product and brand affinity. This requires a different kind of partnership between brand and publisher: “Show my ad to the people who are most likely to receive it well” rather than “Use my data (and everyone else’s) to target my customers and look-alikes.”

For the brand-owned site where data is provided in exchange for more relevant advertising, data clean rooms and PII vaults help ensure that customer permissions and other data privacy issues are handled both to the letter and in spirit of matching customer expectations for the use of their data.

Compliance with Context – Data Clean Rooms

Both approaches separate PII and other information that is not explicitly authorized by a customer for marketing/advertising purposes, ensuring that consent is followed. Data sharing clean rooms utilize a type of data encryption that allows a company to analyze, match, and build models off anonymized data without ever accessing or decrypting personally identifiable information. Companies can interact through a clean room, becoming in a sense digital advertisers for their customer base using only fully anonymized data that is compliant with all regulations.

For the big box retailers and multi-billion dollar brands – the Walmarts, Targets and Home Depots of the world – a data clean room demonstrates to a customer that the brand will use shared non-personal information to improve the customer’s overall experience. It’s collateral for honoring the value exchange. Smaller companies can also benefit from data clean rooms by banding together to approximate similar data volumes and thus deepening their understanding of customers. Multiple media outlets, for example, might share donor data to better understand how to interact and advertise to a wider audience.

Honor Permissions to the Letter – PII Vaults

Conceptually, PII vaults also allow access to data in a way that meets customer expectations, with a slightly different set-up in an advertising context. Whereas a data clean room anonymizes and aggregates data, a PII vault relates to an owned site and the use of first-party data, where the site owner/advertiser uses data according to the data permissions for each type of experience; a customer wishes to receive or not receive product ads or affiliate ads, they set a desired frequency, etc. PII Vaults also ensure that valuable customer data is not viewed, shared, or misused by a brand, limiting use to personalization of CX permitted (“contracted”) by the customer.

The use of data clean rooms and PII vaults help restore trust in advertising by restoring context. Customers are reassured that advertisers and publishers care about protecting their data – and care about delivering relevant advertising. Advertisers and publishers no longer have to play the delicate dance that breeds distrust and undermines the customer.

In a data-driven economy, it stands to reason that advertising will be dependent on customer data for as long as advertising exists, perhaps even unreasonably so. With data clean rooms and PII vaults, the focus can revert to being dependent on the right data. That will improve the experience for everyone, particularly the customer.