Home Data-Driven Thinking Will Clean Room Consolidation Actually Make Collaboration Easier?

Will Clean Room Consolidation Actually Make Collaboration Easier?

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Matt Frattaroli, SVP, Digital Platform and Agency Partnerships, Alliant

Clean rooms are one of the buzziest technologies in the advertising industry. Sparked by a need to activate first-party data in a privacy-compliant fashion, many brands are eager to adopt this solution. 

Amid any industry boom comes the eventual consolidation, and it looks like that day has come for the clean room space. Snowflake kicked things off late last year when it bought Samooha, and LiveRamp continued the trend by purchasing Habu in January.

While the industry is assessing its clean room needs, the big question looms: Is consolidation actually going to make things any cleaner when it comes to collaboration, accessibility and pricing?

Eliminating the friction

For many brands and agencies, the rise of clean rooms simply meant that they had to check the box on selecting another technology provider as the cost of doing business. 

Amid third-party cookie deprecation, signal loss and shifting identity solutions, clean rooms have become ubiquitous over the past 18 months. Many in the digital ad industry were resigned to the fact that they simply “needed one.” So they found a partner and signed a contract to keep up with the industry “Joneses” without clear plans for how to use the tech.

This is ironic because the ad industry typically hates having to manage multiple vendors to simply put ads in front of consumers. It’s why big brands like P&G are constantly talking about the need to reduce partners. In theory, consolidation would bundle clean room capabilities within another vendor that brands, agencies and platforms are already working with, eliminating any potential friction.

This is the case with LiveRamp, which is widely used across the industry and known for its ease of use. If Habu can use LiveRamp’s existing partnerships and infrastructure, then it becomes very appealing to partners already using LiveRamp services.

Ease vs. price

The other side of the coin is price, which is a factor on multiple levels. Until the acquisitions, companies like LiveRamp and Snowflake hadn’t figured out how to turn in-house clean room efforts into revenue drivers. 

How do you build a strong market presence? Be an independent first-mover and offer the overcluttered industry one-stop-shop solutions. Competitive pricing also helps. Yet those differentiators, including pricing, go out the door following an acquisition.

Brands and agencies may get easier access, but they are now bound to the pricing models of these new clean room owners. Will these services cost more than they did before? Will they be included with other services? These decisions will have a major impact on the future of Habu and Samooha.

Interoperability

Finally, with any technology, there’s the simple question: Does it work?

Independent clean room solutions hold a lot of appeal because they aren’t beholden to a parent company that is dabbling in other services, like alternative IDs. They are likely to emphasize interoperability and accessibility, ensuring that their solutions work for clients with a multitude of needs. 

It remains to be seen if consolidation will kill interoperability or spur it into a new realm. We are in a new era where data collaboration is an absolute necessity. If clean room solutions force customers toward one specific kind of identity or work poorly in making connections with other interfaces, then they are actually doing a disservice.

If anything, the consolidation wave is evidence that the clean room hype wave may have crested. We’re now in an era of clean room maturity. The questions of friction, pricing and interoperability apply to all clean rooms in the market, not just the newly acquired. What happens next remains to be seen.

“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

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