Clean and compliant: Behind LS Digital and Aqilliz’s data clean rooms

The joint venture aims to enable multiple partners to collaborate and benefit from a decentralised source of data.

In August 2023, the parliament passed the Digital Data Protection Bill aiming to address growing concerns surrounding data privacy and protection in India's digital landscape. Since the bill was passed, concerns surrounding fair and efficient practices of data accumulation and usage have come to the forefront of discussions within the marketing technology (martech) industry. 

Against this backdrop, LS Digital, a digital marketing transformation company, has announced its partnership with Aqilliz, a blockchain solutions provider, to introduce a Data Clean Rooms (DCR) suite tailored for brands.

A Data Clean Room serves as a collaborative hub where various stakeholders, including brands, publishers, advertisers, internal teams within an organization, and other entities, converge to share and integrate their individual first-party datasets.

Prasad Shejale, founder and CEO of LS Digital, points out that the collaboration to form data clean rooms will enable and foster more ethical practices of data management, which could be quintessential in the brand's long-term appeal. He underscores that consumer trust extends beyond mere transactions to the exchange of personal data with brands, thereby placing a premium on responsible data management practices.

The need

He says, “The responsibility of brands transcends mere compliance with legal obligations to a deeper commitment to ethical data practices. While discussions often revolve around the technical intricacies of DCRs, their significance resonates profoundly from both legal and ethical standpoints.”

In a cookieless marketing ecosystem, where personalised targeting and measurement are paramount, DCRs offer a viable solution to bridge the gap between data privacy and effective marketing strategies. In fact, the discussions surrounding data management and accountability have been around for years now.

Gowthaman Ragothaman, CEO & founder of Aqilliz, highlights that regulatory requirements such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) have long emphasised the need for data fiduciaries to maintain records of data usage, indicating a growing focus on accountability and transparency in data management practices.

To this effect, Ragothaman says that the Clean Room solution developed by Aqilliz is designed to assist enterprises in achieving compliance with these stringent regulatory standards. He explains, "The technology which we have built essentially helps enterprises become compliant with the data so that they can use the data in a compliant manner."

Beyond privacy and compliance, DCRs also offer a comprehensive set of benefits encompassing enhanced security, improved data quality, increased efficiency, facilitated data monetisation, and support for advanced analytics and AI.

But how are DCRs fundamentally different from other forms of data collection such as first-party data and second-party data?

As per Shejale, the challenge posed by other forms of data collection is that the data is split across multiple touchpoints of a customer’s journey with the brand. With no formidable mechanism to bind it all together, there occur challenges posed by data silos. 

“There is a need to bridge the gap between disparate systems for a holistic view of consumer interactions. DCRs help us do that. Those who are aware of these interfaces need to work with those who can come up with the tech.”

But what impact will DCRs have on the routine data management practices of brands and organisations?

Shejale points towards the importance of data collaboration, emphasising the need for seamless sharing of data not only within departments or organisations but also across different partners.

He elaborates, "Different departments of the same organisation should be able to exchange and leverage data that they have access to. But what happens is that the lack of proper infrastructure hinders the ability of the organisation to get the analytics."

Scalability

One of the bigger challenges faced by tech companies is ensuring the scalability of new innovations across diverse sectors. While technology may prove effective in one industry, its applicability and effectiveness in others often remain uncertain. Marketers grapple with the complexities of adapting and integrating new technologies to suit the unique requirements and dynamics of various sectors.

As per Ragothaman, however, DCRs are scalable across all industries. He highlights healthcare and fintech as sectors where DCRs can be effectively implemented. However, he stresses the importance of recognising industry-specific nuances in generating analytics and insights. 

"The category of industry-related analytics and insights is the core competence," he explains. "That's where digital is playing a very key role in the industry today." 

Ragothaman emphasises that while the technology of DCRs may be applicable across diverse industries, tailoring solutions to address specific business challenges is paramount. 

When asked about the reception of Data Clean Rooms (DCRs) in the industry and the future outlook for DCRs in India, Ragothaman says, "As such, there is tremendous interest for this technology right now.”

 Ragothaman lays out the shifting dynamics within the industry, with brands increasingly adopting a publisher-like approach and publishers aspiring to emulate brands. “The industry's trajectory is moving towards direct-to-consumer relationships, emphasising the growing importance of responsibly managing customer data.”

With a new data protection bill in place and the need for clean and compliant data across sectors, Ragothaman believes that DCRs will become paramount moving forward.