Hello, everyone. I want to thank you for dialing in to this session of Day 3 of Oppenheimer's Technology Conference. I'm thrilled to have with us part of the leadership team from Zeta Global. Zeta is a regular here at the Oppenheimer Technology Conference. With us, we have Neej Gore, he's the Chief Data Officer, and Matt Pfau, who is the Senior Vice President of Investor Relations. Welcome to both of you. Maybe I'll just call it a jump ball, whether Neej or Matt wants to take the first one. You know, we may have new listeners in the audience that are unfamiliar with the Zeta Global story. Can we maybe just start from a high level, 20,000 feet view? Can you please share the company background and the problems that Zeta Global is solving for your customers?
Sure. Matt, you want me to take this one?
Yeah.
Great. Zeta Global is a marketing technology company. We primarily service the enterprise marketer that focuses on B2C marketing, so consumer marketing. Those marketers, since the beginning of time, have had some very consistent challenges. Their challenges are to acquire new customers, to grow customer value, and to retain those customers for longer. If you think of the biggest brands in the world, from anyone from T-Mobile to American Express to even TJ Maxx to other retail stores and outlets, they have the exact same types of challenges. Zeta Global is unique in the market for two very specific reasons. The first is that we allow enterprises to both acquire, grow, and retain all within one platform. Historically, this has all been done in point solutions.
When the world moved to consolidating data for the purposes of AI into Databricks and Snowflake and other, our platform had a tailwind behind it because marketers wanted to do more with single-source solutions, again, across acquire, grow, and retain. The second thing we do exceptionally well is we have our own data asset that helps enterprises see intelligence outside of their four walls. What can we tell them about their business and their opportunities that they wouldn't already know themselves? This helps with acquire, this helps with grow, and helps with retain. It really positions us differently in the MarTech landscape than any other provider out there. Those have been two big sources of our growth. Obviously, we are also a pioneer in AI and marketing technology. We like saying we've been doing it for seven years, not seven months.
Now it'd be longer than seven months at this point for those that had started it with the ChatGPT boom. Even my background, I joined Zeta Global eight years ago, and my company was very focused on AI. Zeta Global acquired our company, and then that same infrastructure we brought here, and that has been a real boon for us in the company in terms of our ability to adopt new AI technology, incorporate it into client workflows, including our own workflows, and then bring the benefits of that to ROI that we deliver for customers.
Thank you for that intro. That was really good. Why don't we bring Matt into the discussion here? Matt, maybe we can do a look back in terms of the first half, business highlights. You just reported earnings last week. Your Q2 results looked really good for the business. You exceeded your guidance. You raised your annual targets. Tell us, what is working well for the business in the first half of 2025?
Yeah, thanks, Brian. I think there's a few things to highlight, and then Neej can chime in with anything I missed. I think, first of all, our agency business is performing quite well. That's both within the Holdcos, where we're gaining more traction with the large agency holding companies, as well as we've seen good success with independents this year as well. Going into the year, we had about three independents that were platformed. We've well more than doubled that number this year, so that's an area where we're seeing really good traction. We also, this year, have put more emphasis on our One Zeta initiative, which is showing good signs of early success. We've had a lot of nice cross-sell this year. We called out a few of those customers on our last earnings call. That's still early, still getting started, but good signs of initial success.
I'd also call out that the LiveIntent integration is going quite well, and that's certainly reflected in the scaled customer count, where we've had good success cross-selling a lot of LiveIntent customers with Zeta products. The pipeline of deals with the programmatic email product that we've derived from the LiveIntent assets is showing good promise as well. Neej, anything I missed?
No, I think that's right. Again, to reiterate something you said, our ability to provide solutions to marketers that allow them to acquire, grow, and retain in one platform has become more important than ever before. Those are some of our largest customers, some of our happiest customers, and they give us the greatest opportunity for growth as well. We're seeing really growth on all of those vectors, but the One Zeta model is really coming into light here.
Neej, I wanted to ask you about the data advantage of your platform versus the competition. You did talk about the comprehensiveness advantage of the platform and the all-in-one. Every marketing software company that I follow says they have the best data. Share with us how Zeta Global is differentiated versus those other suppliers from a data capabilities perspective.
It's a great question, and it's an interesting one because I would make the claim that most marketing technology companies don't have any data of their own, right? They have data from their customers that they do things with. When I look at data assets, I think about scale and durability. How much data do you have? How durable has it been over time? The second thing I think about is governance. Is it consented? Where is it coming from? The third thing I think about is actionability. How closely is it tied into your ability to create a marketing outcome? We've made key investments over the last eight years and even before that to acquire data around identity signals and identifiers that are sewn directly into our platform. These aren't licensed data sets. The core of our data is our own. That data is consented in our framework.
We are able to bring that into intelligence that our brands can take advantage of directly through the Zeta Marketing Platform. That model of allowing enterprises to see outside of their four walls becomes incredibly powerful. We can do that from meeting number one, even before they've onboarded any of their data into our environment. We can start showing them value around acquire, grow, and retain, just using the assets that Zeta Global has collected. The closest model I would say this is to is not other marketing technologies or even advertising technologies. It is really close to the walled gardens because they also have scale, they have governance, and they have actionability. That model has been very successful for companies like Facebook and Google. We are the first and really only company to bring that same model into the MarTech landscape.
Thank you. You brought up AI. If I think about Zeta Global, they were an early evangelist for AI. The differentiation question, please share with us how Zeta Global's AI is differentiated from, say, an AI Agent Studio or those other MarTech suppliers in the market.
I think the key thing right now is the first is that I'd say we're 12 to 18 months ahead. You know, AI and an integrated platform that delivers against AI has been our ethos since I've been here for eight years. We aren't a loosely coupled set of technologies. We're one central technology that AI can perform operations on. Just having that infrastructure in place puts us in a better spot to start. We started to experiment with GPTs, Answers workflows, very, very early on. We have production use cases where you can come into the system, you can build end-to-end workflows, you can launch those workflows into activation, and then the AIs can also take advantage of optimization. There's a little bit of a lead there. Obviously, technology changes very quickly. We are blessed to have that lead, but leads can go away.
The other thing I'd say that is even potentially more important, and we're going to double down on what we have today and the lead we have, but the data that can feed our AI models is world-class. You probably have heard the expression, your AI is only going to be, and your outcome is only going to be as good as your data. The fact that we can synthesize data around identity, around intelligence that exists outside of the enterprise's four walls, and use our same AI systems around workflows, around agents, to then bring that into customer outcomes has been a big differentiator. That's one that's very hard to replicate. The types of assets we have consolidated and brought under the Zeta Global umbrella are not readily available. The way we've done it is not easy. It's taken years.
That's going to give us a competitive advantage for years to come. I'd say even from a functional perspective, if you have seen a demo of our platform, and I encourage everyone to see a demo at Zeta Live or in an investor meeting, if you have one set up with us, you will see is that AI is sewn into virtually every part of our operating environment. There's a good example of this. There's a famous retailer that has RFPed like 10 times in the last 10 years. They're very large. They've never switched from their original provider, their marketing automation stack because the switching cost is just too high. Think of all the campaigns you have to migrate, the audiences, the data model.
Now, with our new systems and with Zeta's new system called Compass, it really cuts the onboarding time and work by about two-thirds or sometimes even more. This might be the year, right? I think we think they're going to RFP soon again. It creates such a great opportunity for enterprises to take advantage of new capabilities and get in front of the curve if they've been laggards. Really, our AI is a powerhouse to enable them to do that.
Great. Let's shift to the monetization path for AI for Zeta Global. You do have an AI-driven platform, got all this AI functionality. How should investors think about a framework of the AI monetization path for the business?
Yeah, it's a good question. I know it's one that comes up very frequently. In the today world, I think that we're thinking of monetization primarily from a perspective of utilization. With AI, you're able to make decisions that are easier, faster, smarter. That encourages you to put more campaigns into effect and really activate your marketing with greater efficacy and with higher frequency. That leads to more monetization. We've seen the utilization of our platform increase significantly from clients that have adopted our AI methodologies and tactics and tools much faster than the ones that haven't. In our current world, we democratize the AI. We make it available because we feel like utilization is going to be the endpoint for monetization. There may be a future world where that changes, but in the current world, that's the rubric in which we're operating. We've seen some good success around.
The last question on AI is just, it's topical, but the pushback, you know, specifically that AI, it's going to be the end of software, you know, because of AI and ChatGPT. I think someone pointed out earlier, hey, Marc Benioff said that we were going to have the end of software 25 years ago, and here we are, we still have software. Clearly, it's topical. ChatGPT 5.0 came out last week, hit, you know, most of the software stocks that I'm covering. What is your perspective, you know, in terms of generative AI and the impact of software? Do you think it is going to be the end of software?
I don't. I think it's going to be more like your teammate on Turbo. That's how I would describe it. I think the jobs to be done for enterprise marketing are complex. They operate across channels. They require supervision. I think AI is going to make us all better, right? It's going to make us smarter. It's going to make us faster, and it's going to make the work easier. Consumers over time have demanded more. They are going to want better experiences. AI is a tool that helps us get there, and it offloads the busy work so that we can think about more strategic work that's required for our clients. I don't think it's the end of software.
I think it's really going to be an accelerant for marketers and their ability to get the job done and provide great results to the brands they work for and the consumers that they are responsible to. That's my personal point of view on it.
Thank you for sharing it as the Chief Data Officer. Appreciate that. OK, let's take a step back and again look at kind of the market here, and let's talk about the moat and, you know, Zeta Global's right to win in your market. Why are you winning? The market you compete in has been around for a long time here. It's crowded. You've got these mega platform companies like a Salesforce and Adobe, IBM. You've got all these point providers like a Braze or Iterable out there. What gives Zeta Global the right to win? How is your business differentiated, you know, against those larger providers as well as those point providers?
I'll start, and Matt, maybe you can chime in after. I think this goes back to what I mentioned at the outset, which is that marketers are not looking for more tools. They're looking for better performance with the tools they have. As part of that, if you think again about the marketer jobs to be done, acquire new customers, grow customers at scale, and retain them for longer, Zeta Global is a platform that operates across all of those vectors. It can use a canonicalized set of data from the brands that we work with, plus our data, and it can bring new intelligence to bear. This is just a very disruptive operating model in a technology area where things haven't changed a lot over the last 10 or 15 years. The jobs to be done haven't changed, but now we've finally approached them with an entirely new vector.
Doing more with less is a key theme of what's happening today in the marketing ecosystem. It covers AI, but it also covers the solutions that you choose to partner with. The fact that you can acquire, grow, and retain through Zeta Global, your intelligence can lead you across all of those vectors. We help you understand and see opportunities that you don't see yourself. These are all difference makers in our ability to not just help our customers win, but they create a big moat around our business, which has been reflected in our growth and the adoption of our technologies.
It's also a flywheel effect too, Brian. The more you use Zeta Global across multiple use cases, the higher return on investment you're going to get. That ties into the One Zeta initiative we have. As Neej mentioned before, the clients that are using us for multiple use cases have a materially higher NPS score than those that are only using us for one use case.
Let's shift over to some of the growth factors here for the business. I think Matt pointed out your agency business is outperforming here year to date. Maybe let's start there first. If I think about the agency business, it's been around for a very long time. Why are you doing so well there? Why are agencies increasingly doing more business with Zeta Global?
Yeah, I can start. I think let's dimensionalize agencies into two groups to start. There's independent agencies. Typically, those customers of Zeta Global and partners of Zeta Global want to use all of our technology, right? They're never going to be able to make the level of technology investment that we can make. We've given them the ability to co-brand our tools and white label our tools. They want to compete with the Holdcos. In many cases, the independent agencies are also getting into use cases outside of acquire. They're getting into grow and retain as well. They use our technologies in a very similar manner to how an enterprise would. We give them this tool set that's, again, hard to replicate. The same reasons the enterprise selects us is the same reason the independent agencies will also be selecting us.
On the other side, with the large holding companies, where we are an activation partner for them, there's a number of things happening. First of all, our technologies are set up for scale. We can give them efficiencies in delivery and operation and fulfillment that they may not be able to achieve themselves. The second thing is that we've made considerable investments in the tech to actually deploy digital marketing with our data baked in. When you work with Zeta Global on an activation program, the Zeta Global data asset comes with to help power those solutions. At the end of the day, this comes back in all cases for independents and for the Holdcos to performance. We deliver industry-leading performance with our technology and our data assets under one umbrella. That's what's leading to growth and better outcomes for the business.
All of those together materialize in the growth rates you've seen. Certainly, the performance is an important part of how this all materializes as well.
All right. Why don't we shift to the Publisher Cloud, to LiveIntent? You've had this business now for a few quarters. How is the integration going? Are you achieving the synergies that you were hoping for when you acquired the company? Has anything surprised you about the technology or the company now that you have it as your business and you're running it?
Yeah, good question. First of all, we were always very impressed with their data asset. It's an identity-based data asset. They work with the world's biggest publishers and brands. Having that in-house and unlocking all of the value of that data asset and merging it with our data asset has been very powerful. That happened very early. If you may recall, we were already partnered with them to some degree before we made the acquisition. We were somewhat familiar with it, but then we acquired more of the data after the acquisition and brought it into our world. That's been a big advantage for us. The second thing is on the fulfillment side. LiveIntent essentially gives our platform an entirely new channel. Whether you want to call it inbox advertising or direct to inbox, it extends our ability to find individuals where they want to be reached in premium environments.
That model has been merged in with our deployment architecture. It's being used in conjunction with existing Zeta clients. Zeta technology has also been extended to LiveIntent customers, and that's around marketing automation. That's around identity resolution in the bid stream. There's been a lot of synergy on both sides happening. We're really seeing that flywheel around adoption from both sides and really adoption of new technology from where they didn't have it previously take hold. We'll see more of that in the coming months and year.
Is it a minute-based question for Matt? Is it fair to assume that the LiveIntent, the Publisher Cloud business accelerated in Q2 versus Q1 since that was the second quarter, since that was one of the drivers of the upside?
Yeah, Brian, we haven't broken out anything specifically from a revenue perspective for the Publisher Cloud per se, except for we did give the LiveIntent revenue, which was related to the acquired customers from LiveIntent and doesn't include some of the revenue synergies that we've gotten subsequently. Like I said previously, I think if you look at the customer count and the customer additions that we've had over the past several quarters, they've been very strong. Partly a factor of that has been our ability to cross-sell LiveIntent customers and get them above the $100,000 threshold to become a scaled customer. That's a piece there. I think the pipeline we're seeing with the Zeta Direct, the email product that we've developed with the LiveIntent assets, is very exciting as well.
It has been going very well post-acquisition, and the LiveIntent numbers that we've broken up don't necessarily tell the whole story.
OK, that's a good intro into my next question. I wanted to talk about the install base spend in the back to the base motion. You gave a key metric, which is your scaled customer RPO. That has continued to grow at a double-digit rate in Q2 and for a long time. It's actually up more than 50% since the IPO four years ago. We're talking big numbers. You know, that scaled customer RPO is now over half a billion dollars. How should we think about penetration within that scaled customer cohort, whether we think about consumption or from a product or maybe even a marketing IT budget basis? How long of a runway is there to continue to grow the scaled customer RPO?
Neej, do you want to give a big picture of what you see within customers?
Yeah. I would say at the highest level, we are underpenetrated in a major way right now with the One Zeta model. We started One Zeta about two years ago as a test. The basic idea was if we have customers that are using one, two, three channels with us, right? Channels would be things like CTV or display or audio or email. Would they want to be doing one, two, or three use cases with us instead? Use cases are a major point of leverage on revenue. Use cases, again, meaning acquire, grow, retain. What we found, and Matt mentioned this earlier, is that the customers that move from one use case to two to three end up being some of our happiest customers from an NPS perspective. We know that there is an amazing opportunity here.
Initially, we started with 10 customers that we wanted to get to $25 million in revenue by the end of 2025. This was just our initial kind of goal. What we found along the way is that the One Zeta model applies not just to our largest enterprises, but it applies across the board to Zeta Global's customer set. The majority of our customers want to be doing more with us. Moving them from one use case to two to three requires internal collaboration, which we're working through and we're learning more about. It also requires a different way to manage the customer and a different type of customer relationship, which we've also been building out. I'd say that the future for that model of moving from one to two to three use cases is very, very bright.
We have a low percentage of customers that currently do that with us. I think we have a high percentage of customers that are either interested in doing that with us or will be interested in doing that with us just because of everything I've mentioned. Really amazing growth vector for us just within our own install base that we've identified and we're seeing a lot of good success around in the early days here.
If we look back again in the first half with the scaled customer RPO, does anything stand out or interesting in terms of either from a use case or a product perspective that's been driving that growth in the first half of the year for that metric?
I think, you know, Neej, go ahead.
I think that, you know, if you think of a large enterprise and you think about how they spend money, they could spend, you know, up to maybe $5 million, $6 million, $7 million in annual commitments for their marketing automation stack. That same enterprise probably spends hundreds of millions in media. The opportunity to capture both marketing automation, CDP, and media gives us the most leverage from a use case perspective. Some of the large jumps we've seen in RPO are for customers that are now doing both marketing automation with us and now moving into the media space. That gives us, again, a tremendous amount of revenue leverage and stickiness amongst those enterprises.
Yeah, Brian, we called that on the earnings call. We saw from a customer growth perspective the fastest growth was customers using four or more channels, as well as customers using two or more use cases. I think broader adoption of the platform is certainly driving that. The other thing I'd highlight is that the number we reported does include a headwind from LiveIntent. We didn't quantify exactly what that was. We did say in the fourth quarter that LiveIntent drove a five-point headwind to RPO growth. There was certainly a headwind from LiveIntent in the second quarter, as their customers are on average smaller than Zeta's customers.
In terms of the product, just thinking about when you land and bundling products, is there a common product or a common use case that you land with? Is there an interplay with the different channels and products? Are certain products like messaging, data management, do they always land together? Does customer success in certain use cases or modules pull in other modules or use cases?
I think generally what you'd find is there are two types of lands. One would be RFP-driven, and that usually involves marketing automation in your vernacular, messaging, and data management. There's another kind of land that involves media, right? Media means I need to acquire customers most generally. These run side by side. What we find is that when we land with marketing automation or CDP, which would be RFP-driven lands, they always get exposed to the media offering at the time of the land or sometime during the pitch. That becomes of interest to them very, very quickly. They say, if we're using this to manage our existing customers and you have all this intelligence, why couldn't we be using this to acquire new customers that look like our best ones today? It's very common to expand that way.
On the media side, if we land with a pilot around media, what they often say is, you have all this great intelligence. What happens if I give you my first-party data file? Could you build a lookalike against it? Could you help me segment that data file into new categories? The media land starts turning into what looks more like a data management land. They flow bi-directionally, but generally, an RFP-based land would be around CDP or ESP or marketing automation. The other kind of land would be a media-based land, which can also be driven by an RFP, but the cycles around that would be much faster.
The last question for the session is just thinking about M&A. It looks like you've had a really successful M&A here with LiveIntent and kind of expanding the platform. How do you think about the future strategy with M&A? Are you more interested in doing like a LiveIntent where you're expanding the breadth of the platform, or would you like to go deeper into your capabilities within your different MarTech product sets?
One of our core philosophies at Zeta Global is that anything we do needs to be able to be integrated into our stack, right? We look for capabilities that either are going to be fully complementary to the current offering or they make the current offering better. We're not looking for things that sit on the side or need to be loosely coupled. We think in this new world, technology needs to be integrated so that AI can operate most effectively on top of it. Nothing disruptive right now from our vantage point, but certainly opportunistic. There's going to be a lot of AI fallout from companies that have good tech that couldn't make businesses work, let's say, in the next 24 months. That's going to be ripe for the picking, right?
There's going to be stuff there we're going to like, we're going to want to integrate to reinforce things we're already doing. There may be some complementary, again, channels, use cases that fit well into the MarTech architecture that we'd also look at over that period of time. Anything, Matt, to add?
Yeah, the other thing that's important for us, Brian, is the ability to cross-sell an acquired customer base. If there is a customer base we're getting, and you can see this in LiveIntent, where we're able to sell them Zeta's products, and we're able to take LiveIntent's products and sell it to our own customer base. That's another key criteria that we look for.
Neej, I did get one question from the field that if you're willing to take one more, it's about large language models within the platform. The question, I'll just read it, is, do you use your own large language models or do you partner with some of the other large language model suppliers in the market, or is it a combination of both?
It's both. As of about eight years ago, we started building our first large language model at Zeta Global. That model is used to essentially categorize interest intent on the internet. When you're browsing and you're part of our consented graph, we can understand what you're reading, what you're shopping for, and then give you scoring against that. That's internally built. We've also obviously complemented that with all of the production LLMs and new foundation models that have come out from ChatGPT, Perplexity, Claude, Snowflake, Facebook, and others. Those are available to you in the platform when you build agents. You can decide which model you want to use. The interesting thing in our platform is those models can speak to Zeta data. They can speak to the Zeta LLM and scoring we've created for a user. They can also speak to customer data.
Eventually, they get put into eigenic workflows where they're taking large percentages of someone's work that might be the busy work or the really time-consuming work and making it into something that the eigenic system can actually deliver against. The answer to your question very simply is both.
Great. We're out of time. I want to thank Neej. I want to thank Matt from Zeta Global for spending time and sharing with us a very exciting story going on this year at Zeta Global.
Thanks, Brian.