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- Advertisers are looking for new ways to use consumer data as third-party cookies disappear.
- Insider compiled a list of companies that specialize in helping advertisers crunch consumer data.
- They include startups like Habu and Infosum, as well as giants like Epsilon.
- See more stories on Insider's business page.
A cottage industry of adtech firms are pitching new technologies to help advertisers manage their customer data amid the phase-out of third-party cookies and growing privacy concerns.
One of the most prominent new technologies are data clean rooms, which let advertisers match first-party data like email addresses with data from partners, like publishers, to better target and measure ads.
The stakes are high: Marketers spent an estimated $121.5 billion on marketing-tech in 2020, according to a report from BDO, WARC, and the University of Bristol. Without data clean rooms, many pieces of marketing-tech infrastructure won't work because advertisers won't be able to extract and use data for advertising. Clean rooms can mitigate the risks that advertisers face in sharing data because they are designed as privacy-compliant tools.
Insider pulled together a list, based on our reporting, of the most interesting and largest companies making big bets on new data-sharing technologies.
While Amazon, Facebook, and Google run data clean rooms, they only measure ads within their platforms, so they weren't included. This list focuses on companies like Snowflake, InfoSum, and Epsilon that claim they can help advertisers share data to inform advertising across apps and websites.
Financials: Parent company Interpublic Group generated $8.06 billion in net revenue last year. IPG does not break out financials for Acxiom but said during the fourth-quarter earnings that Acxiom helped soften IPG's blow from a drop in ad spend during the pandemic because Acxiom's business is primarily based in the US.
Competitors: Epsilon, Merkle, and Experian
Notable clients: Starbucks and Southwest Airlines
What it does: Acquired by agency holding company IPG in 2018 for $2.3 billion, Acxiom has pitched data clean rooms for decades, said Mike Danley, Acxiom's data management product leader.
Acxiom's tools help advertisers and publishers analyze their respective first-party data assets to check for shared audiences in order to send them targeted ads. Acxiom can make that targeting more precise by adding its own audience segments — like movie enthusiasts or people with a certain household income.
Acxiom's data clean rooms can be set up for both individual campaigns or commissioned for long-term use. For instance, a retailer might use Acxiom to power a solution so it can continuously share data with advertisers. Pricing ranges from $50,000 to $100,000 for smaller projects, while larger ones can cost tens of millions of dollars a year, Danley said.
How it's different: Danley said Acxiom emphasizes its long history supplying privacy-secure clean rooms when pitching advertisers. Acxiom is also promoting non-advertising use cases, like corporate mergers and acquisitions. In one example, Acxiom ran a clean room for a hotel chain acquiring another hotel chain to see if they had the same members in their respective loyalty programs.
Risks it faces: Acxiom acts as a third-party marketplace for data. Ongoing state-by-state regulation in the US makes it hard for advertisers to vet adtech companies' privacy expertise, said Tina Moffett, principal analyst at Forrester Research. The US has data-privacy laws in states like California and Vermont, but lacks a federal law like Europe's General Data Protection Regulation that would clarify and standardize how US advertisers can use data.
"When you're dealing with an advertiser uploading data into a clean room, the onus is not only on the advertiser but the data clean room provider," she said.
Financials: Parent company Publicis Groupe's 2020 net revenue was $11.5 billion (€9.7 billion). Publicis does not break out financials for Epsilon but said that during the fourth-quarter, Epsilon's revenue grew 5.5%.
Notable clients: Anheuser-Busch InBev and Unilever
Competitors: Acxiom, Merkle, and Experian
What it does: Epsilon has long pitched data clean rooms. In January, it added to that capability and rolled out a product that helps advertisers target ads. Advertisers upload first-party data, like sales or email addresses, and match it with Epsilon's database of anonymous profiles from more than 200 million people. Advertisers then create audiences to target ads using lookalike models that find people who might be interested in a product. A movie studio, for instance, can send ads to people who have bought movie tickets or read movie reviews, said Dana Moroze, SVP of platform solutions management at Epsilon.
Epsilon also has access to data from 5,000 publishers that advertisers can use to target ads. For example, advertisers can create audiences of people interested in international news, based on data from The New York Times.
How it's different: Moroze said Epsilon pitches advertisers on its large database, which can be used to help brands reach audiences beyond the scale of its own first-party data. Advertisers worry cookieless ads don't reach wide audiences, which is a challenge Moroze said Epsilon is working on.
Risks it faces: Epsilon's data clean room also acts as a third-party marketplace for data. As third-party data faces more scrutiny over privacy concerns, Epsilon could face blowback for how its data is collected and used.
Financials: 2021 financial year revenue was $5.4 billion.
Competitors: Epsilon, Acxiom, and Merkle
Notable clients: Choice Hotels and Meredith Corporation
What it does: Experian Marketing Services is the marketing business within Experian, primarily known for supplying credit scores. Experian Marketing Services has long helped advertisers mesh their first-party data with anonymized data from credit card transactions and public records. The company also acquired adtech firm Tapad for $280 million last year to beef up its ad targeting products.
How it's different: Most data clean rooms use "common digital identifiers" like email addresses to match different data sets, said Scott Kozub, VP of product at Experian Marketing Services.
But he claims Experian Marketing Services' identity tools create more accurate audience profiles than email addresses, since people often use multiple addresses.
"We have the technology and capability to connect disparate data sources to create a single customer view, improving the accuracy of our matching capabilities within the data clean room," he said.
The company also works with competing data clean rooms like InfoSum. Advertisers can feed Experian Marketing Service's data through InfoSum's tools, so they can increase the amount of data they can bring into clean rooms.
Risks it faces: Similar to Epsilon and Acxiom, Experian Marketing Services is also third-party data marketplace, and prone to scrutiny from privacy watchdogs over how consumer data is collected and used by the marketing industry. The UK's Information Commissioner's Office filed an enforcement action against Experian in 2020 for how its data was used — though the action is not specific to Experian Marketing Services.
Financials: Raised $15 million to date
Competitors: LiveRamp and Snowflake
Notable clients: Activision and Asics
What it does: Former advertising and marketing tech execs from Salesforce founded Habu last year.
Habu's software lets brands create a standalone clean room, and it also has tools that help advertisers extract more data from other companies' clean rooms like Google's Ads Data Hub. Advertisers typically pay clean rooms to run queries to measure ad performance, but Habu's analytic tools provide quicker and more consistent stats, said Matt Kilmartin, cofounder and CEO of Habu.
Kilmartin said that while Habu's data clean rooms are competitive against Snowflake and LiveRamp, it also partners with both companies to build tools for advertisers to use, like data warehouses and software that makes sense of online identity.
How it's different: Habu builds clean rooms within advertisers' own data clouds so that data doesn't leave the premisis.
"Not everyone wants to give all of their data to an identity provider," he said.
Risks it faces: Forrester Research's Moffett said that startups can be more innovative than giants with new approaches in pitching advertising and marketing tools to advertisers but warned that startups may not be as steeped as big firms in handling thorny privacy issues for advertisers as big firms.
"If they're a smaller startup, they have more incentive to be innovative and may want to move fast," she said. "The risk with that is making sure that they understand the complex privacy world."
Financials: Raised $25 million to date
Notable clients: Omnicom and CNN
What it does: InfoSum is a data onboarding company, so its main business is helping companies move data from a storage facility to a place where that data can be used for marketing or advertising. This technology can also be used to power data clean rooms, where it clients can compare data — like email addresses, street addresses, or phone numbers.
How it's different: InfoSum says it can help companies compare data with each other, without ever moving that data outside of the data owners' premises. Its advertiser, publisher, and adtech clients license software called "bunkers," which sit in the client's server environment. These bunkers are "unique to each data owner and fully under their control — they can be considered an extension of their own infrastructure," said CEO Brian Lesser.
In theory, InfoSum's approach gives data owners more control over the data they choose to share with partners.
InfoSum is also designed to preserve consumer privacy. When an advertiser or publisher uploads data about individual customers into that bunker, its technology makes it anonymous.
Lesser is also deeply connected within the advertising industry. He's a former AT&T and WPP exec with deep agency relationships, said Ana Milicevic, cofounder and principal of digital consultancy Sparrow Advisers. And InfoSum has hired ad talent from WPP, Xandr, and LiveRamp in the past year to build out sales and ad products for agencies.
"They picked the industry first — advertising — and then built around it," Milicevic said.
Risks it faces: While InfoSum's setup is designed for security, companies that want to compare datasets with each other must have installed an InfoSum bunker. But for Lesser, that's not a bug, it's a privacy feature that prevents InfoSum itself from seeing any of its clients' data. He claims this requirement has created a sales cycle where Infosum clients recommend it to others.
Financials: Fiscal year 2020 revenue was $443 million with $82 million in gross profit.
Competitors: Snowflake and InfoSum
Notable clients: French retailer Carrefour, Mondelez, and Unilever
What it does: LiveRamp is well-known in the advertising industry for helping marketers use offline data, like sales or addresses collected from loyalty cards, to power targeted ads.
LiveRamp also has a data clean room to help ad buyers and ad sellers swap data. Carrefour, which sells ads through its retail network, uses a data clean room from LiveRamp to track each campaign's performance. Gareth Davies, VP of product for LiveRamp's data platform called Safe Haven, said that LiveRamp works with more than 30% of the world's largest packaged-goods brands but did not name clients.
How it's different: Davies said LiveRamp wants to provide infrastructure for all of a marketers' data needs.
He said that LiveRamp's ID tools that help advertisers piece together audiences using anonymous data across devices, email addresses and households is a key part of LiveRamp's pitch.
Risks it faces: Davies said that as data clean rooms expand beyond advertising into functions like sales, it's harder for marketers to consistently justify the expense. It also takes a long time to execute on these more ambitious initiatives.
"It is a multi-year effort to build these foundations — it requires political capital, change management, and big multi-year investments that often go up to the executive team of Fortune 100 and Fortune 500 companies," he said.
Financials: Parent company Dentsu Aegis Network's 2020 revenue was $8.4 billion (¥939 billion). Dentsu does not break out Merkle's financials but said that its Merkle, ISID, and Dentsu Digital businesses had a 20% compound annual growth rate of 20% over the past three years.
Competitors: Epsilon, Acxiom, and Experian
Notable clients: AAA and Arhaus
What it does: Merkle is a technology unit within ad holding company Dentsu Aegis Network, focused on solving problems around identity and cookieless advertising. Merkle's data clean room lets advertisers match their datasets with publishers, as well as with Merkle's own data. Advertisers can also match their data with Google and Facebook.
A retailer selling ads on its ecommerce site, for instance, could use one of these custom clean rooms to help a shampoo advertiser target and measure ad campaigns.
Ankur Jain, SVP of cloud solutions at Merkle, said the company wants to speed up the time it takes to deploy a custom clean room from months to weeks.
How it's different: Jain said Merkle provides more functions than just a clean room. It can use that data to buy ads for clients on publishers like Conde Nast, and it can measure performance.
Risks it faces: Merkle has a financial incentive to pitch media buying on top of its clean room services, and some advertisers don't want one agency to handle everything. They might want a neutral party to power a clean room.
Financials: Unknown, as Neustar was purchased for $2.7 billion by private equity firm Golden Gate Capital in 2016.
Competitors: InfoSum and Snowflake
Notable clients: STX Entertainment and Scandinavian Airlines
What it does: Neustar has a data clean room that is designed to strip out identifiable information while helping companies match their datasets.
Steve Silvers, SVP of product and GM of customer experience at Neustar, said that the firm's data clean room products also have non-advertising use cases like storing data and helping companies avoid data breaches.
How it's differentiating itself: Neustar is trying to bring something unique to the data clean room environment by offering measurement. The firm claims it can measure complicated things, like whether someone bought a product after seeing an ad. Silvers said the company is also working on ways to quickly measure brand recall and sales increases soon after a campaign concludes.
Risks it faces: Silvers said Neustar is working on "a software-based clean room model where the data doesn't move." However, data clean rooms offered by upstarts like Habu, InfoSum, and Snowflake already operate on this model.
Financials: Fiscal year 2021 revenue was $554 million with $360 million in gross profit.
Competitors: InfoSum and LiveRamp
Clients: The Trade Desk, NBCUniversal, and OpenX
What it does: Snowflake helps marketers store large amounts of data, and is competitive with Adobe and Oracle. As the digital ad industry deals with restrictions on tracking consumers, Snowflake is betting it can help marketers upload data into privacy-safe environments, competing with LiveRamp and InfoSum.
"InfoSum and LiveRamp also claim to be standing up projects around this but the Snowflake market is for sophisticated advertisers that can replace third-party cookies," said Adam Heimlich, CEO of Chalice Custom Algorithms.
Media and advertising is Snowflake's largest vertical, said Bill Stratton, global head of the media and advertising industry at Snowflake.
One of Snowflake's biggest new clients is NBCUniversal, which plans to roll out a Snowflake-powered data clean room later this year, aimed at helping marketers track if TV ads lead to sales.
How it's different: Stratton said Snowflake's data clean room technology is part of larger software packages called the data cloud, which lets clients share data without moving it from their premises. Snowflake says this method is more secure than uploading data to a third party.
Stratton also said that Snowflake's pricing structure is different from other data firms. Instead of recurring monthly storage fees, Snowflake's clients are charged a "compute" fee only when the data is used to join with another company or processed for ad targeting.
Risks it faces: One of the big challenges that Snowflake faces is inking big direct deals with all of the majorto facilitate data sharing, said Hugo Loriot, partner at data consultancy Fifty-Five. That model is different from LiveRamp and others that bake data-sharing into other products like identity, he said.