This article was co-authored by Lucie Laurendon, Product Marketing Lead, Supply at Equativ, and Tim Norris-Wiles, Managing Director EMEA at Habu and it first appeared in Adweek.

Innovations can often run in parallel, but their impact is hugely amplified when paths converge. Over the past few years, two trends in the advertising industry have been growing substantially and heading on a course for collision: data clean rooms and retail media networks.

Perfectly placed to collect insights about shopper activity, retailers have emerged as major power players in the era of rising data privacy regulation; poised to reduce the gaping hole in digital ad targeting and measurement strategies as layer after layer of audience data is stripped away. Giving credence to enthusiastic estimates of market growth – including the Boston Consulting Group’s $100-million-dollar prediction – recent studies show up to 96% of those operating retail media networks have implemented waiting lists, so they can pace exploding brand demand.

Shifting focus towards data clean rooms, the story to date isn’t all that different. While adoption hasn’t progressed as rapidly, brand interest is swelling; with nearly half (47%) saying they have already used clean rooms and 80% keen to expand their data collaboration with other companies. And the reasons for this climbing popularity aren’t dissimilar either. Providing a secure space for first-party data to be leveraged by multiple parties without putting privacy at risk, clean rooms have the potential to help resolve increasingly complex issues with data access, sharing, and addressability.

Better Together: Creating a Dynamic Duo

Although the post-cookie era arguably dawned years ago, Google’s long-awaited deprecation of third-party trackers is set to bring further-reaching changes. Starting with 1% of Chrome users, plans to entirely remove cookie support by the end of 2024 will mean even further limitations on data collection for digital advertisers, brands, agencies, and publishers.

As cookie trackers lose their usability along with other programmatic era Ad-IDs (including those rooted in IP addresses), the ability to accurately target across the web at scale is teetering on the precipice. Data clean rooms and retail media networks stand ready to play a pivotal role in how the sector will tackle this new era.

Both have individually been touted as crucial elements of the move to privacy-first advertising. Creating high-security environments where data sharing is controlled and any outgoing insight is anonymized, clean rooms enable multiple players to pool owned data and fuel deeper analysis – safe in the knowledge that activity strictly complies with data regulation. Meanwhile, the capacity for retail media networks to gather consented data about shopper interactions, ad views, and final purchases means they’re well-equipped to provide effective closed-loop ad targeting, measurement, and optimization that works without third-party cookies.

But boiling each down to its basic core function shows there is scope for a partnership that may prove greater than the sum of its parts. Data clean rooms provide the secure infrastructure needed to mine and activate data. Fast-multiplying retail media networks are harvesters of first-party data, which in aggregate, could hit the kind of volume once generated by traditional cookies.

In short, what we’re talking about here is the opportunity for large-scale addressability.

Restoring and Revamping Scalability

At the wider industry level, brands are beginning to recognize the importance of first-party data and looking to enhance their insight stores, but many remain far from achieving sufficient scale. Clean rooms, of course, are designed to mitigate this issue – yet there are also growing challenges with the increasing number of disparate clean rooms.

With brands creating isolated initiatives, there is a risk of data silos making for tricky navigation on both sides of digital ad dealing. Despite holding vast troves of customer insight, including valuable behavioral and transactional data, the ongoing retail network creation boom is also inevitably creating fragmentation. As more retail walled gardens emerge, brand marketers are finding it harder to adapt and manage an eclectic range of partners, inventory, and ad creative.

The logical solution to these challenges is for retail media networks to boost their interoperability and implement data clean rooms that enable them to match audiences with a variety of brands. In fact, there are already examples of businesses in industries that have historically been separated from customer data, such as CPG, partnering with networks such as Kroger Precision Marketing, Nectar 360, and Walmart Connect to strengthen their first-party data muscle: paving the way for deeper audience profile enrichment to power smarter ad targeting.

At a recent industry event, Danone’s Mary Katherine Woltz explained how marketing for the company’s plant-based Silk yogurt registered immediate double-digit growth in household penetration by employing connected TV (CTV) ads through its retail media network partner platform. This is a nascent example of what could be possible when CTV platforms, retail media networks, and brand marketers triangulate their efforts for mutual benefit.

As clean room technology continues to develop, greater interoperability among clean rooms could also present broader opportunities to synthesize data across networks, without exposing sensitive information to competitors. This will then provide an opportunity for brands in the CPG arena and beyond to marshal their resources; using clean room connections to establish an expanded foundation of data-enhanced inventory and supplier aggregation.

Retail media networks and data clean rooms are not just a neat natural pairing. Their powerful mix of assets happens to be exactly what the industry needs as we move into the post-cookie world: unifying a rich (and compliant) data source with an activation and expansion mechanism that will fuel enhanced supply-side revenues, return on ad spend, and user experiences.

Brands, agencies, and advertisers facing data signal loss and volatile economic conditions are increasingly keen to explore how retail networks can support refined and privacy-focused reach across closed-loop shopping journeys; extending outside of e-commerce platforms to cover social media, CTV, and more. Infusing clean room technology into these scenarios affords the opportunity to refine audience targeting in a way that works for brands, audiences, and retailers, as well as data regulators.

The multiplier effect of combining these two forces could at least turbo-charge scaled cookieless advertising, and at best, foster an even bigger and better new industry paradigm.