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What a Clean Room Means for Amazon Advertising – Adweek

Amazon is reportedly developing clean room technology to help its advertisers better understand the impact of their spend on consumer behavior—and shine a light on previously undisclosed performance metrics. The news was first reported by AdExchanger, which cited sources familiar with the product. Amazon had no on-the-record comment.

However, Price Glomski, evp of emerging commerce at digital agency PMG, told Adweek talks with large retail clients indicate Amazon’s advertising teams are “eager to evaluate something in the realm of a clean room.”

A clean room enables platforms and brands to combine, analyze and attribute aggregated first-party data and platform-side audience data in a privacy-centric way.

“This environment would maintain strict stakeholder access, a WiFi blackout and clean and disconnected devices for the project,” Glomski said. “Using separate source devices, the stakeholders work to join data sources in order to uncover performance truths.”

Mark Irvine, director of strategic partnerships at search marketing company WordStream, said this is important because while advertisers know customers interact with their online ads thanks to data like impressions and click-through rates, customers’ next steps can be blurry.

Irvine said that 96% of customers don’t buy an item on their first search or visit to a site, so “understanding how our ads influence their later decisions and journeys is paramount to our overall marketing success,” he added. “Google and Facebook allow advertisers to track a user returning to their site or their navigation between different Google and Facebook properties, but Amazon is a sea onto itself.”

That means unless a shopper clicks on an ad on Amazon and then buys that product on Amazon, advertisers have no idea of the effectiveness of their ads on customers, Irvine said.

A clean room, on the other hand, gives advertisers the ability to analyze the contribution of partners like Amazon beyond simply giving that partner credit because they happened to be there shortly before or right when a sale happened, said Ryan Sullivan, chief strategy officer at marketing agency Performics.

“Beyond stronger sales attribution, clean rooms can be used for advanced insights about current customers and make it easier to compare partners on their fundamental value [like reach, overlap and instrumentality],” he added.

And an Amazon clean room, in particular, may be a welcome data resource seeing it has historically erred on the side of under-sharing desirable performance metrics with advertisers, Sullivan said.

Glomski agreed a clean room can play a significant role in confirming what used to be partially informed results.

“By combining platform and first-party data, these brands are able to create granular optics into consumer programs while also getting closer to actual performance related to incremental customer growth, long-term value and the total cost of acquisition,” he said.

In addition, an Amazon clean room would help brands understand how many customers are shopping for their brands just on Amazon, on Amazon and the brand website or just on the brand website.

“In most cases, we have seen brands invest more assertively in these channels after such an audit,” Glomski added.

This, in turn, could help grow Amazon’s advertising business.

“Naturally, this type of project would greatly benefit the recommendations by an Amazon account executive in both format and media allocation,” Glomski said. “In-sourced or agency [small- or medium-sized enterprises] would have better insight to performance management down to the consumer target or product.”

According to Sullivan, this is another signal Amazon is confident in its ad business and its contribution to incremental sales compared to other major partners like Facebook and Google.

“Amazon’s rapid growth and scale in lower-funnel ad touchpoints is what gave it a seat at the big table,” he said. “This will help it cement that position and take more than their fair share from other players.”

But clean room technology is more attractive to enterprise-level advertisers, who can dedicate their own resources to managing the customer data they feed to Amazon, Irvine said. Therefore, the problem is it doesn’t help the 30 million small- and medium-sized businesses in the U.S. who have the same problems of understanding the impact of their ads.

“A growing small retailer can’t dedicate the tech resources to feed Amazon the data they need to prove that their own ads are effective,” Irivine said. “Google and Facebook have more deployable means to measure these cross-network or online-to-offline conversions. Success for the ad-tech industry isn’t going to be perfection for its elites, but improvement for all—and Amazon certainly isn’t making itself any more attractive to smaller advertisers with these investments.”

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