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What Amazon’s Clean Room Services Move Means for Advertisers and Competitors
The recent news that Amazon Web Services (AWS) would offer clean room tech may not have turned a lot of heads. After all, one of the largest cloud-hosting companies in the world launching a new product at the height of clean room mania isn’t all that surprising.
But because this is Amazon, there’s a lot more at stake than just another clean room provider entering the market. The AWS foray into clean room tech has the potential to shake ad tech’s foundation and lock a lot of established providers out of the market before clean rooms even really become a standard part of the ad tech stack.
Underpinning this announcement is the fact that Amazon is offering infrastructure designed for the high scale and speed required for ad tech development. Cloud integrations are common and easy at this point, and old hat for Amazon. Adtech and martech integrations are unique in that they rely on high-frequency data usage. With this announcement, Amazon is signaling that it can support the necessary high-frequency integration needed for clean room interoperability, as well as any other data collaboration tools to come. In doing so, AWS is now positioned as the strongest ad tech cloud host as we move into a new era defined by first-party data.
What Amazon’s clean room tech mean for marketers
This has a big impact on both marketers and the technologies that they rely on to execute their ad plans. From a marketer’s perspective, this lowers the barrier to entry for testing clean room technology. Assuming a brand is currently using AWS for their data, this now reduces the heavy setup that comes with the process and spurs wider adoption.
Then there’s interoperability, which is the biggest challenge even for brands that have successfully implemented clean rooms. If a high percentage of marketers adopt the AWS technology, then it’s far easier for brands and publishers to collaborate around the data. AWS may end up setting the standard for interoperability, but that requires tech providers to follow suit (more on that later).
Finally, there’s the prospect that Amazon seems to be directly attacking Google’s impenetrably dominant hold on the market with its end-to-end ad stack. In creating the ad tech operating system that companies build their apps on top of, Amazon is creating a common infrastructure that allows better and faster collaboration in a privacy-safe way. Rather than transfer their data from app to app, marketers can easily virtualize their data and quickly access it. This solves many of the challenges created by cookie deprecation and looming privacy laws.
How Amazon Web Services move will affect adtech
This announcement should scare the other clean room providers already in the market. They need to evolve quickly to integrate with the AWS toolset, or else they risk being locked out of the market altogether. That’s not to say that things are hopeless — the current providers could offer their data collaboration functions on top of AWS, essentially using AWS as a virtual cloud for their Bunker or Volt, where the data is hosted. These providers could then use their own encryption tools for collaboration and privacy without moving the data, while also letting them meet brand and agency needs while maintaining the critical interoperability with AWS.
From the AWS perspective, not much changes. The AWS business is built on microservices, so enabling the advertising and marketing functionality makes sense. In fact, some of the recently announced services already existed, so this is more a case of productization, rather than a big upgrade or evolution.
The clean room services leverage Amazon’s cloud infrastructure and allow service providers to plug into the data rather than moving the data to enable the service. Most companies already use AWS, so this announcement allows them to keep their infrastructure and enable first-party data capabilities for any partners that are built on AWS.
While it may not be a major technological leap forward for Amazon, it signaled that AWS understands where the ad industry is going. As advertisers endure signal loss from cookie deprecation, first-party data and collaboration will become more important. AWS wants to be the backbone for the next generation of tools built for this new epoch of advertising, and this was the first step in that mission.