April 2021

The Total Economic Impact™ Of Zeta Global

Cost Savings And Business Benefits Enabled By Zeta

Zeta logo

A Forrester Total Economic Impact™ Study Commissioned By Zeta, April 2021

Table Of Contents

Zeta provides data, technology, and services that help companies more effectively market to their customers. Zeta commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential value enterprises may realize by deploying Zeta's data product. The purpose of this study is to provide readers with a framework to evaluate the potential financial benefits of Zeta Global on their organizations.

To better understand the benefits and risks associated with this investment, Forrester interviewed four decision-makers at companies with experience using Zeta’s data.

Prior to engaging with Zeta, the interviewees’ organizations struggled with reaching certain markets, could not find affordable data and geolocation data to better target their marketing campaigns, and were concerned about data deprecation due to reduced access to cookie and mobile data and new consumer privacy legislation.

The organizations decided to engage Zeta to improve their marketing efficiency, gain a strong marketing partner, and implement Zeta’s data quickly into campaigns. This resulted in significant benefits, as detailed in this case study. Specifically, with Zeta, organizations reduced customer acquisition costs (CAC) and increased revenue.

For the purposes of this study, Forrester calculated potential benefits for three types of sample companies.

Consulting Team: Steve Odell, Jasper Narvil
Project Contributors:
“Zeta is always beating benchmarks, improving on metrics, and outperforming the solution we had before. On top of that, they’re a great marketing partner for us; it’s clear that they’re experts in this field. And when I need help on creative, they can step in there too. Zeta’s been a significant enabler of what we’re able to accomplish as a company.”

Associate media director, marketing and advertising industry

Quantified benefits. Risk-adjusted present value (PV) quantified benefits include:

  • Reduced CAC for a sample consumer services company, resulting in $1.1 million savings.

    Location-relevant consumer services (e.g., home HVAC and other professional services, local events, and moving services) can take advantage of Zeta’s geolocation data and audience segments to improve marketing spend efficiency, resulting in a significant reduction to CAC.

  • Reduced CAC for a sample self-service online product company, resulting in $2.1 million savings.

    Similarly, self-service online product companies (e.g., online retail, games, and financial products) can take advantage of Zeta’s audience segments to improve marketing spend efficiency, resulting in a significant reduction to CAC.

  • Increased store revenue for a sample company with physical retail spaces, resulting in $2.9 million in profit.

    Companies with physical retail spaces (e.g., department stores, convenience stores, and restaurants) can take advantage of Zeta’s geolocation data and audience segments to improve marketing spend efficiency, resulting in an increase in revenue driven by increased footfall.

Unquantified benefits. Benefits that are not quantified for this study include:

  • Strong performance on viewability, brand safety, and reducing invalid traffic.

    Interviewees mentioned that Zeta performed better than their alternative sources of data and consistently met threshold requirements for viewability, brand safety, and invalid traffic rates.

  • Transparent data quality.

    Interviewees noted that Zeta is transparent in how it derives its data and what drives specific signals. This gives clients confidence in the inputs when they utilize Zeta’s data within marketing campaigns.

  • Fast time-to-market.

    Interviewees noted that implementing Zeta data is an efficient and quick process. One interviewee stated that buying and implementing Zeta products is like “flipping a switch.”

  • Product hypothesis testing.

    Zeta’s data allowed companies to target segments of the market they did not have access to previously. In addition to using that capability to improve marketing spend efficiency, it also allowed them to test product and market intelligence in new ways. One interviewee noted that the company used Zeta in a campaign targeting a new audience segment; while the campaign itself wasn’t successful, it provided valuable insight in terms of how consumers viewed the product compared to competitors. This also allowed the firm to better understand its target demographic and improve its marketing models.

TEI Framework And Methodology

From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in Zeta.

The objective of the framework is to identify the benefit and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Zeta can have on an organization.

  • DUE DILIGENCE

    Interviewed Zeta stakeholders and Forrester analysts to gather data relative to Zeta.

  • CUSTOMER INTERVIEWS

    Interviewed four decision-makers at organizations using Zeta to obtain data with respect to benefits and risks.

  • SAMPLE ORGANIZATION

    Evaluated sample organizations based on characteristics of the interviewed organizations.

  • FINANCIAL MODEL FRAMEWORK

    Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewed organizations.

  • CASE STUDY

    Employed fundamental elements of TEI in modeling the investment impact: benefits, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.

DISCLOSURES

Readers should be aware of the following:

This study is commissioned by Zeta and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.

Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in Zeta.

Zeta reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.

Zeta provided the customer names for the interviews but did not participate in the interviews.

NEXT SECTION: The Zeta Customer Journey

DRIVERS LEADING TO THE ZETA INVESTMENT

Interviewed Organizations

Industry Interviewee Annual revenue Number of employees
Marketing and advertising Chief revenue officer $20 million 20
Fintech Marketing analytics manager $1 billion 5,000
Marketing and advertising Associate media director $100 million 120
Marketing and advertising Associate media director $100 million 100

Key Challenges Before Zeta

The interviewees reported their organizations struggled with common challenges before their investments in Zeta, including:

    • Difficult-to-reach markets.

      Interviewees noted that they had significant challenges reaching certain markets before Zeta. They didn’t have the appropriate consumer data to target the audience segments they were interested in.

    • Expensive data before using Zeta.

      Some interviewees mentioned that they never pursued using geolocation data for their marketing campaigns before, since the price points were too high.

    • Impending data deprecation.

      Interviewees noted that marketers will need to pursue strategies that are less dependent on third-party cookies and mobile identifiers as browsers and operating systems increasingly restrict access to consumer data. A key strength of Zeta is that its audience data is based primarily on first-party data such as email addresses.

Why Zeta

Interviewees noted several reasons for investing in Zeta, including:

    • Efficient marketing spend.

      Zeta consistently performs at or near the top in terms of marketing spend efficiency with its use of data, geolocation data, and audience segments.

    • Strong marketing partner.

      Interviewees noted that, in addition to its data, they received access to Zeta’s experts and thought leaders, along with a flexible and responsive partner who valued the relationship.

    • Quick implementation and ramp-up.

      Interviewees noted that the implementation process with Zeta was simple, and they were able to get to market in only a few weeks.

“Zeta is ridiculously responsive. Their account manager is the best I’ve worked with and has gone through and redone our model, held extra meetings, and continued testing models to ensure they are doing what they should be doing.”

Marketing analytics manager, fintech industry

Sample Companies

Based on the interviews, Forrester modeled three types of companies that can see benefits related to implementing Zeta’s data into their marketing campaigns. For this study, benefits are calculated for:

  1. Consumer services companies.
  2. Self-service online product companies.
  3. Companies with physical retail spaces.
Sample companies
  • Consumer services
  • Self-service online products
  • Physical retail spaces
NEXT SECTION: Analysis Of Benefits

QUANTIFIED BENEFIT DATA AS APPLIED TO THE SAMPLE COMPANIES

Consumer Services Company Benefit: Reduced CAC

  • Evidence and data.

    Interviewees noted that using data provided by Zeta allowed them to significantly decrease their customer acquisition costs. Specifically, location-relevant consumer services (e.g., home HVAC and other professional services, local events, and moving services) can take advantage of Zeta’s geolocation data and audience segments to improve marketing spend efficiency, resulting in a significant reduction to CAC.

  • Modeling and assumptions.

    The modeling for the sample consumer services company assumes a CAC of $150 prior to using Zeta’s data. In marketing campaigns designed around Zeta’s data, the sample consumer services company reduces its CAC down to $75. As the company increases its use of Zeta’s data across more campaigns, the total cost savings of customers acquired adds up over three years.

  • Risks.

    This benefit can vary due to uncertainty related to:

    • Baseline CAC prior to Zeta.
    • How Zeta data is incorporated into campaigns.
    • Targeting the right customer segments during campaigns.

To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.1 million.

Consumer Services Company Benefit: Reduced CAC

Ref Metric Calculation Year 1 Year 2 Year 3
A1 CAC without Zeta $150 $150 $150
A2 CAC with Zeta $75 $75 $75
A3 Customers acquired via Zeta campaigns 3,000 6,000 12,000
At Reduced CAC for consumer services company (A1-A2)*A3 $225,000 $450,000 $900,000
Risk-adjusted ↓10%
Atr Reduced CAC for consumer services company (risk-adjusted) $202,500 $405,000 $810,000
Three-year total: $1,417,500 Three-year present value: $1,127,367

Self-Service Online Product Company Benefit: Reduced CAC

  • Evidence and data.

    Interviewees noted that using data provided by Zeta allowed them to significantly decrease their customer acquisition costs. Specifically, self-service online product companies (e.g., online retail, games, and financial products) can take advantage of Zeta’s audience segments to improve marketing spend efficiency, resulting in a significant reduction to CAC.

    Modeling and assumptions.

  • The modeling for the sample self-service online product company assumes a CAC of $300 prior to using Zeta’s data. In marketing campaigns designed around Zeta’s data, the sample self-service online product company reduces its CAC down to $150. As the company increases its use of Zeta’s data across more campaigns, the total cost savings of customers acquired adds up over three years.

    • Risks.

  • This benefit can vary due to uncertainty related to:

    • Baseline CAC prior to Zeta.

    • How Zeta’s data is incorporated into campaigns.

    • Targeting the right customer segments during campaigns.

To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk- adjusted total PV (discounted at 10%) of $2.1 million.

Reduced CAC For Self-Service Online Product Company

Ref. Metric Calculation Year 1 Year 2 Year 3
B1 CAC without Zeta $300 $300 $300
B2 CAC with Zeta $150 $150 $150
B3 Customers acquired via Zeta campaigns 1,500 6,000 12,000
Bt Reduced CAC for self-service online product company (B1-B2)*B3 $225,0000 $900,000 $1,800,000
Risk adjustment ↓10%
Btr Reduced CAC for self-service online product company (risk-adjusted) $202,500 $810,000 $1,620,000
Three-year total: $2,632,500 Three-year present value: $2,070,642

Physical Retail Spaces Benefit: Increased Profit

    Evidence and data.

  • Interviewees at companies with a brick-and-mortar presence noted that using data provided by Zeta allowed them to appreciably increase their same-store revenue. Specifically, companies with physical retail spaces (e.g., department stores, convenience stores, and restaurants) can take advantage of Zeta’s geolocation data and audience segments to improve marketing spend efficiency, resulting in an increase in revenue driven by increased foot traffic.

  • Modeling and assumptions.

    The modeling for the sample company with physical retail spaces assumes an annual store revenue of $4 million that increases by 5% when using Zeta’s data as part of its marketing campaigns. The sample company pilots the use of Zeta’s data across 10 stores the first year and, upon seeing successful results, increases the use of Zeta’s data to 100 stores in Year 2 and 300 stores in Year 3.

    Risks.

  • This benefit can vary due to uncertainty related to:

    • Baseline revenue prior to Zeta.

    • How Zeta’s data is incorporated into campaigns.

    • Targeting the right customer segments during campaigns.

To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk- adjusted total PV (discounted at 10%) of $2.9 million.

Increased Profit For Physical Retail Spaces

Ref. Metric Calculation Year 1 Year 2 Year 3
C1 Retail store annual revenue $4,000,000 $4,000,000 $4,000,000
C2 Number of retail stores using Zeta 10 100 300
C3 Same-store revenue lift from Zeta campaigns 5% 5% 5%
C4 Subtotal: Increased revenue per retail store with Zeta C1*C3 $200,000 $200,000 $200,000
C5 Subtotal: Increased revenue across retail stores using Zeta C2*C4 $2,000,0000 $20,000,000 $60,000,000
Ct Increased revenue and profit for physical retail spaces C1*C2*C3*C4 $100,000 $1,000,000 $3,000,000
Risk adjustment ↓10%
Ctr Increased revenue and profit for physical retail spaces (risk-adjusted) $90,000 $900,000 $2,700,000
Three-year total: $3,690,000 Three-year present value: $2,854,170
NEXT SECTION: Appendix

Appendix A: Total Economic Impact

Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.

Total Economic Impact Approach

  • Benefits represent the value delivered to the business by the product. The TEI methodology places equal weight on the measure of benefits and the measure of costs, allowing for a full examination of the effect of the technology on the entire organization.

  • Costs consider all expenses necessary to deliver the proposed value, or benefits, of the product. The cost category within TEI captures incremental costs over the existing environment for ongoing costs associated with the solution.

  • Flexibility represents the strategic value that can be obtained for some future additional investment building on top of the initial investment already made. Having the ability to capture that benefit has a PV that can be estimated.

  • Risks measure the uncertainty of benefit and cost estimates given: 1) the likelihood that estimates will meet original projections and 2) the likelihood that estimates will be tracked over time. TEI risk factors are based on “triangular distribution.”

  • PRESENT VALUE (PV)

    The present or current value of (discounted) cost and benefit estimates given at an interest rate (the discount rate). The PV of costs and benefits feed into the total NPV of cash flows.

  • NET PRESENT VALUE (NPV)

    The present or current value of (discounted) future net cash flows given an interest rate (the discount rate). A positive project NPV normally indicates that the investment should be made, unless other projects have higher NPVs.

  • RETURN ON INVESTMENT (ROI)

    A project’s expected return in percentage terms. ROI is calculated by dividing net benefits (benefits less costs) by costs.

  • DISCOUNT RATE

    The interest rate used in cash flow analysis to take into account the time value of money. Organizations typically use discount rates between 8% and 16%.

  • PAYBACK PERIOD

    The breakeven point for an investment. This is the point in time at which net benefits (benefits minus costs) equal initial investment or cost.

The initial investment column contains costs incurred at “time 0” or at the beginning of Year 1 that are not discounted. All other cash flows are discounted using the discount rate at the end of the year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations in the summary tables are the sum of the initial investment and the discounted cash flows in each year. Sums and present value calculations of the Total Benefits, Total Costs, and Cash Flow tables may not exactly add up, as some rounding may occur.

About Forrester Consulting

Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in scope from a short strategy session to custom projects, Forrester’s Consulting services connect you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit forrester.com/consulting.

Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to forrester.com.

Cookie Settings