Power Your Retail Media with Data Clean Rooms

Retail Media networks (RMNs) and Data Clean Rooms (DCRs) have emerged as two important areas for the industry in 2023.

Let us first understand how an RMN is defined. A retail media network is a first-party data advertising solution that enables retailers to make their audience and data intelligence available for brands and other media companies to deliver targeted advertising.

BCG estimates retail media market will grow to $100 bn and constitute 25% of total digital media spending by 2026. Amazon is clearly the run-away leader here. But big retailers like Walmart, Target, etc. would also be able to leverage their customer data to build large ad businesses.

In India, Amazon has reportedly surpassed half a billion dollars in ad revenue.

Today we are operating in a digital-first world and retailers are collecting more data on shopper behavior and outcomes than ever before. Retailers are, therefore, in a unique position to make this data available to brands who need more effective ways to reach their current and potential customers. In effect, enabling retailers to act more like media owners with a high-value and authenticated addressable audience.?

A retail media solution’s robustness depends on the quality of customer data that underpins it. Retailers are exploring ways to offer even richer media experiences to brands.

Enter DCR. What is a DCR? Data Clean Rooms?are privacy-safe environments that use anonymized data to facilitate data sharing. This includes advanced audience identification, activation, and measurement—all of which improve cross-channel performance. In simple terms, data clean rooms host anonymized data in a way that is secure and isolated to give brands insights across activation partners and channels in one, cohesive view. According to a?Gartner report, 80% of advertisers with media budgets of $1 billion or more will use data clean rooms by 2023.

How can data clean rooms revolutionize modern retail media solutions?

Data clean rooms empower retailers to connect datasets across multiple organizations without requiring any data to be moved. This provides the control, ownership, and flexibility required for retail media owners to bring together various parties with valuable datasets into a rich retail media network, allowing businesses to connect, match and execute without risk.?

Finally, data clean rooms allow retailers to fully operationalize and monetize their first-party data with other brands, media owners, and agencies to maximize the impact across a customer’s omnichannel journey without risk.??

1.???Second-Party Data Planning

Many brands face the challenge of having limited-to-no first-party data themselves. This is generally seen in companies with no direct-to-consumer strategy, such as a CPG. Retail media enables those brands to tap into second-party data held by retailers, media owners, and other data providers to inform their media planning with rich segmentation, market research, or even attribution.?

Role of Data Clean Rooms in powering second-party data planning

Through a data clean room, brands can create high-value audience segments. For example, a CPG can build an audience based on those individuals who have previously purchased its products or shown interest in a specific product category.?

Furthermore, advanced data clean rooms that offer advanced machine learning tools that enable brands

·??????To identify common characteristics and behaviors across those datasets

·??????Buyer personas created with this actionable insight can inform customer audience creation and targeting at a greater scale

·??????These audiences can then be activated directly across the retailer (shopper marketing) or other media owners (off-site activation).??

2.???Measurement

Measuring media campaigns' success based on in-store and online outcomes is the final piece of the puzzle for any brand, its media agencies, and media owners. Retail media networks have a unique advantage against other media solutions in this case, as they have direct access to the outcome or purchase data. They can do complete end-to-end analysis to prove the value of their proprietary customer data both offline and online.?

Role of data clean rooms in powering measurement

The multi-party nature of data clean rooms makes measuring the incremental impact of retail media campaigns simple and fast. Each party involved in the retail media campaign brings different data points to the table:

• Brands?with their own eCommerce offering - bring outcome data to be used in the analysis. For example, sales data or shopping cart data.
• Retailers - Provides outcome data from their online and offline stores and exposure data for shopper marketing campaigns.
• Media owners - help in incrementality analysis. Ahead of campaign delivery, they will need to create two audiences, those who will be exposed to the campaign and a small control group who will not be exposed. Post-campaign, the media owner can make both audiences available for analysis.?

Analyzing all these data sets makes it quick and easy to conduct incrementality measurement, which calculates the uplift in the desired outcome that can be attributed to the campaign.

3.???Shopper Marketing

Shopper marketing is the most traditional opportunity for retail media and retail media networks. This owned media activation enables brands to match their first-party data against a retailer's shopper data. This data matching enables brands to target shoppers across the retailer's owned channels.?

Role of Data clean rooms in powering shopper marketing

Retailers can enable their shopper and audience data for brands to match their first-party data quickly and safely with a data clean room without requiring either party to sacrifice control of its data and without risking the privacy of their customers. Brands are then free to build custom audiences based on the individual goals of each campaign for retention, up-sell, or re-engagement. These custom audiences are exclusive and unique to each brand, as they are based solely on the intersection of their data sets.?

The multi-party nature of a data clean room also means that other second and third-party data sources can be introduced to further enhance these audiences like combining identity data from graph providers, exposure insight from other media owners, or additional behavioral data from an agency partner to improve everything from ad creative to measurement.?

4.???Off-Site Activation

The power of retail media extends beyond just the retailer's owned channels. Brands and retailers can leverage their combined customer intelligence to target consumers and measure the impact across multiple channels by working with media owners

Role of data clean rooms in powering off-site activation

A brand and retailer can match their first-party data sources against various media owners, such as a CTV provider with a data clean room. This allows the brand to take their highly tailored audience created against the retailer's audience and identify where, how, and when those individuals are consuming content. The brand can use this insight to plan high-performing media campaigns that deliver the right message to the right audience at the right time. Additionally, the retailer can provide accurate measurements of the lift generated with their valuable customer data across the omnichannel journey.?

Data Clean Room – Your tech stack essential

A data clean room will empower you to unlock the full potential of retail media whether you're a retailer looking to build a retail media network, a media owner wishing to collaborate with a retailer on a retail media solution, or a brand ready to tap into these solutions.

This privacy complaint approach to data collaboration allows these organizations to?enrich their consumers' profiles, have more insights about them, and finally be able to activate campaigns and reach out to them in a more personalized manner. A modern tech you cannot miss in your tech stack which can enable you to find the right balance between Privacy and personalization at the same time.

Anil Pandit

SVP- Publicis Media