How data clean rooms are enhancing retail media transparency and effectiveness

Parbinder Dhariwal, vice president, general manager, CVS Media Exchange

Retail media networks have grown tremendously in recent years, and the market shows no signs of slowing down. A recent forecast predicts that retail media will be the fastest-growing market segment in the next three years, with spending expected to more than double to over $100 billion by 2027. These expectations for the future of the retail media network are a testament to the innovation RMNs have made over the past few years. However, achieving this impressive growth will demand increasingly creative problem-solving.

For retail media, growth depends on enthusiastic and transparent collaboration between media networks and advertisers. Industry players work together to develop new, more accurate and precise ways to segment audiences, deliver messaging and enhance visibility into performance. The data clean room is one environment that is already essential in that collaboration.

Data clean rooms provide secure environments for data collaboration

One of the primary challenges in retail media is meeting the need for transparent campaign data-driven insights. Retailers are addressing this concern by leveraging data clean rooms instead of sharing data directly with partners.

DCRs, a relatively new model gaining traction in retail media, offer brands a compelling option in light of the deprecation of third-party cookies. They provide a secure environment where advertisers and publishers can work together to develop first-party insights to refine messaging and improve customer experiences. On this neutral ground, all stakeholders can share and analyze de-identified customer data at an aggregate level, and this collaborative approach allows for deep-level data analysis.

Furthermore, combining datasets helps advertisers, RMNs and platforms gain better insight into their customers’ shopping behaviors and purchase pathways, improve their audience modeling and targeting strategies and recognize changing behaviors and trends. All these advantages increase the effectiveness of targeted advertising and personalized marketing strategies.

When other stakeholders, such as social media platforms, enter the equation, DCRs become even more powerful. Social media has long been a walled garden, with insights into campaigns only available through their dashboards and siloed from advertisers’ and publishers’ independent metrics. Data clean rooms securely break down those walls to enhance transparency, encourage creativity and strategic adjustments, and boost incremental improvement.

DCRs provide better data with control and transparency

A deeper understanding of customer behavior is vital for success in the competitive retail media landscape. Though other models can offer brands some understanding of audiences, adding first-party, front-of-store and social data paints a more nuanced picture of who’s shopping, where they’re doing it and why they’re making the decisions they do.

Moreover, data clean rooms provide a means for offering partners increased transparency regarding the success of a campaign without sacrificing security. The clean room provides a structured environment for data analysis, minimizing the risk of misuse. These clean rooms provide a controlled space with restricted access to ensure that only authorized personnel can interact with the data. This level of control is crucial for safeguarding information while providing the insight and transparency that advertisers and their agencies need to make informed marketing decisions.

This collaborative analysis enables more accurate targeting, better campaign optimization, and ultimately, improved return on investment for marketing efforts. And those improvements are significant. For example, campaigns that layer high-fidelity, first-party retailer loyalty data over supplier data deliver a sales lift up to 2x higher than the benchmark. In addition, it makes engaging with a retailer, its suppliers and platform partners more enjoyable and meaningful for shoppers — ensuring they receive messaging that resonates with their needs.

Data clean rooms enforce transparency and trust among RMNs

To continue building retail media’s future, it’s necessary to identify what’s made the retail media model so successful thus far. Much of that success is thanks to a built-in advantage: RMNs foster trust within communities. Preserving that trust as the market grows will be of the utmost importance, and data clean rooms are helping RMNs do that.

Data clean rooms have emerged as a critical component of RMNs’ strategic playbooks to build upon the trust they’ve already established and safeguard that trust as privacy guidelines shift — and the technology will continue to revolutionize how businesses handle and leverage retailer data.

In an era where data-driven decisions dominate the retail landscape, maintaining the integrity of retailer data is paramount. DCRs allow retailers, advertisers and media companies to collaborate while maintaining the peace of mind that their campaign data analysis is conducted securely. As the retail landscape continues to evolve, data clean rooms will become an expected offering, ensuring that advertisers and media platforms can navigate the complexities of data-driven decision-making while maintaining the trust of their partners. 

Sponsored by CVS Media Exchange

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