Current state and future outlook for data collaboration solutions

The marketing and advertising sector is undergoing a profound change in how data is shared and utilized, marking a major shift since the early days of data co-ops. As third-party cookies are being phased out and privacy regulations tighten, there’s a significant shift toward leveraging first-party data. This shift demands more collaborative and sophisticated data management strategies to enhance insights, activation, and measurement.

This trend is driving a swift increase in the use and acceptance of data collaboration solutions (DCSs). These tools enable authorized, two-way data exchange between brands and their media partners.

Permissions and consent are more important than ever

Heightened demand for data security, privacy regulations emphasizing permission-based practices, browser policies limiting identifier usage, and the widespread adoption of cloud technology are forcing brands to find new solutions for data collaboration within a secure and compliant environment. DCSs have transitioned from tools used mostly by innovators and early adopters to a primary approach for identifying optimal media buying partners and enhancing measurement and analytics within the data layer.

The future of DCSs is promising, with significant growth and maturation expected in the coming years. This blog post provides an overview of the key trends and developments shaping the outlook for DCSs.

5 distinct solution models

DCS platforms can integrate with and ingest data from various components of the data layer — such as marketing data warehouses, data lakes, customer data platforms (CDPs), and identity solutions — acting as an interoperable bridge between internal and external datasets.

As the DCS market matures, five distinct solution models have emerged, each offering unique features, advantages, and considerations:

1. Standalone DCSs that serve as point solutions, allowing for composable systems that work across partners with similar or interoperable capabilities
2. DCSs with embedded identity to provide data interoperability between partners within a permissioned environment
3. Data warehouses or data lakes with integrated DCSs to enable the frictionless movement of data between data layer components
4. CDPs with integrated DCSs that enable seamless activation for both adtech and marech use cases
5. Walled gardens with embedded DCSs that are the primary facilitation points for sharing within their ecosystem

To minimize complexity, media owners, brands, agencies, and technology players in the adtech and martech sectors must carefully prioritize their specific needs and use cases, as well as the flexibility and composability of their existing data and technology stacks. They must also consider the level of interoperability required and the cost-effectiveness of various pricing models. Given the early stage of the market, standardized pricing has not yet been established, and options range from usage-based and subscription-based to hybrid approaches, each designed to support specific use cases.

Compliance is the cornerstone of operations

Despite the growing adoption of DCSs, several challenges hinder their widespread use, including:

• Ensuring compliance and managing corporate and partner governance
• Adhering to evolving privacy regulations
• Navigating data and technical integration complexity
• Integrating first-party data from partners securely and compliantly
• Selecting and managing the interoperability of identity with DCS solutions
• Addressing the lack of skills and internal ownership across the organization

These challenges are leaving teams stretched thin, as they try to keep up with the need for more frequent and compliant collaboration as well as increased demand for partner and cost management.

The integration of data at scale — at speeds that approach real time — is increasing the value of service providers who can make it work, understanding both the audience and creative components of the marketing and advertising technology and data ecosystem.

4 DCS trends to anticipate in the future

Looking ahead, the future of DCSs will be shaped by several key trends and developments:

1. The integration of consent mechanisms in DCSs, with the ability to track the chain of permission on data at the component and attribute level, aligning with corporate privacy and broader regulatory standards.
2. The increasing adoption of a brand or media owner's first-party ID graph, serving as the referential base for enhancement and interoperability with third-party ID graphs.
3. The continued deprecation of identifiers, including cookies, along with restrictions on the use of IP addresses.
4. The potential for integrated marketing stacks to go beyond martech through customer engagement on owned and earned media and fully integrate paid media for holistic omnichannel orchestration, decisioning, activation, and measurement.

Looking forward, adoption and usage of DCSs is forecast to grow at a compound annual growth rate of 24% over the next three years. This growth will be driven by the advancing capabilities of DCSs, the increasing recognition of their value in enabling privacy-compliant data collaboration, and the growing need for data-driven insights across industries. As the market evolves, spend in the US is projected to range from several hundred million for standalone DCS platform licensing fees to billions of dollars when bundled with costs for identity management, storage, and compute infrastructure.

Data collaboration solutions are poised to play a pivotal role in shaping the future of data-driven marketing and advertising. As organizations navigate the complexities of permissions, consent tracking, identity interoperability, and platform interoperability, DCSs will enable secure, compliant, and effective data collaboration. The reliance on both internal and external solution teams will be essential to manage the evolving technology stack and ensure seamless integration across the marketing and advertising ecosystem. With substantial investment and growth projected, DCSs are set to drive innovation and transformation in the industry.

How Adobe can help

Adobe is excited to introduce Real-Time CDP Collaboration, a clean room application that delivers privacy-centric and marketer-friendly workflows so that advertisers and publishers can reach their audiences without relying on third-party cookies. Real-Time CDP Collaboration empowers brands to discover new audiences by working directly with publishers and reaching those audiences through activation across channels, with measurement built in for one centralized workflow. Today, so many challenges for collaboration stem from solutions being too manual, technical, or limited in connectivity. Real-Time CDP Collaboration aims to bridge these gaps in an easy-to-use and technology-agnostic way that democratizes access to collaboration for all brands.

Watch the webinar, then learn more about Adobe Real-Time CDP for Data Collaboration here.

Sam Garfield currently serves as the head of digital strategy for communications, media, and travel at Adobe where he provides thought leadership and works with companies on digital transformation efforts. In his previous role, he was the strategic lead responsible for setting the vision, strategy, and focus of AARP Services’ data infrastructure and analytics offering. Prior to that, Garfield spent 16 years at Discovery Inc. focusing on financial systems, process improvement, and data analytics. He was the vice president of data strategy and advanced audience platforms, providing leadership on the data strategy and roadmap for Engage, Discovery’s advanced TV product. He has received bachelor’s and master’s degrees in business administration from the University of Maryland.

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