Zeta Global Holdings Corp. (ZETA) Earnings Call Transcript & Summary

[ Can you guys hear me okay? Is this thing on? I'll get the light right on this. ] All right. I guess we can get started. Thanks, everybody. The last one for the day, thanks for hanging in there. I am super thrilled to have Scott Schmitz from Zeta Global. He is actually stepping in for Chris for this session, so thanks for that.

Koji, thanks for having us. Thanks for having me.

Yes. So I guess just to set -- to level set the conversation here, maybe a little bit of background on yourself. What is your opportunity that Zeta's addressing? And how do you guys plan on really capitalizing on this opportunity?

Sure. Sounds good. So my name, like Koji said, Scott Schmitz, Head of Investor Relations for Zeta. I've been here about 8 months. Prior to that, Investor Relations at Dell and EMC. Spent a couple of years on the sell side and buy side and started as a software engineer. So -- but enough about me, Zeta. So Zeta is a marketing technology company that helps marketers acquire, grow and retain customers. So -- and we do it with a focus on lowering their total cost of ownership and improving their return on investment. And so how do we do that? It's all delivered. The primary solution is delivered through our Zeta Marketing Platform or ZMP, and that consists of 3 primary components: so a data element, a proprietary first-party data element, a software and AI layer and then the ability to activate on those -- on that. And so I'll dive into those a little bit. Our first-party data, I know -- I think we're probably going to get into that, but maybe to preempt it a little bit here. How do we source this data? So we have data on 235 million U.S. individuals. It's sourced through kind of 3 primary components. So we have a publisher network. We own and operate a distribution network, and we have a large partnership network. So on the first one, on our publisher network. The largest piece of that is a company called Disqus, which is the largest commenting platform on the web. Our code is embedded on 5 million publisher sites. So if you think about the commenting section, a lot of those sites and our code and our authentication sits and is embedded in the term and service of, like I said, 5 million-plus websites. So that's a -- it's a large source of identity data and signal data as people log in and comment on the Disqus platform. The second -- or kind of maybe not second, but other sources of publisher networks are some of our recent acquisitions. So we acquired a company called Apptness and a company called ArcaMax. These are, again, kind of publisher networks. One runs a survey network. One runs an e-mail distribution network. Large signal and identity data that we can get from those sources, so that's the -- kind of the publisher side. There's several other pieces to that, but those are kind of the big components. The next part is our distribution network. So we operate one of the largest e-mail service providers, so we are one of the largest e-mail service providers. And through our proprietary identity data, we send acquisition e-mails using [ RI data ] to help customers acquire -- or to help companies acquire new customers. So we send roughly 6 billion e-mails a month. There's a lot of signal data, identity data that we can gather through that click-through and where companies land or where customers land, what websites they're visiting. So again, a huge source of data through our distribution network. We also own our own DSP or demand-side platform. So as ads are placed across the web through a programmatic channel, we can see that bid auction and get all the signal data from that source. Again, so the other sources within that distribution network, but those are, again, some of the bigger pieces. And then the last piece is our partnership. We don't go into all the details, but one piece we have talked about is we do source some credit card information from partners, and that helps provide kind of an off-line channel in terms of customer activity and again, more signal data and helping enrich our graph. And when you take all these 3 pieces and put them all together and create this rich identity graph, the -- our ability to kind of pull out the intent and signal scores from that data and then active or build marketing -- build audiences and activate that into any marketing channel, that's really the -- kind of the core value proposition of Zeta is delivering more deterministic audiences. So because we have that proprietary data set and everything resolves back to a Zeta ID, so we're not sharing personal identifiable information or PII, but everything resolves back to a Zeta ID, which helps us run better attribution and deliver a better return on investment for marketers. So kind of a long-winded answer. But the value proposition is kind of these 3 pieces that all work together, simplify the marketing stack for a customer and then delivers a better return on investment.

Got it. Got it. Thanks, Scott. It sounds like it's a big data play here going on. But before -- I'm going to ask you a lot of questions on that. But before we get into that, I am asking every company that we're doing a fireside chat with 3 kind of big-picture questions, one on the macro, one on the hiring front and one on compensation structures. Okay. So on the macro side, a lot of things going on in the world. Russia, Ukraine, European macro, China slowdown fears, inflation risks, interest rate risks, all sorts of fear of recession. Okay. Any sort of impacts you guys are seeing right now? How do you guys categorize that? And what are you doing to position the business for any sort of potential recession in the future?

Yes. So I think the way we look at it is we're staying as close as we can to our customers. And we spent a lot of time on this going into our last earnings call. And I think the thing that we're really focused on is helping understand that buying pattern of a customer and what -- how are they going through the life cycle, what are the things they're looking at. So as we stay as close as we can to our customers, I would kind of boil it down into 3 pieces. So sales cycles. So as we look at kind of leading indicators that might tip us off until something changes, it would be sales cycles, contract duration and contract size. So when we go through our pipelines and look at those elements, there's really nothing that sticks out in terms of a major concern. We haven't seen any indication of a more macro creeping into the business. So sales cycles, for example, no change over the last 30, 60, 90, 120 days. It's been very consistent across the business. When you look at contract durations, they're actually extending for us. So if you go back to our IPO about a year ago now, contracts, our average contract was under 1.5 years or kind of 14, 16 months, something like that. We're closer to 2 years today. So we've seen -- in a tighter environment, you might see people less willing to commit in shorter contracts, but we've seen kind of an extension of our contract durations. And then the size, the data point we provided in earnings was the number of deals in our pipeline is up 40%, and the value of that pipeline is up 50%. So we're seeing larger deals. Obviously, good growth in the pipeline. And so we're encouraged by as much as we can inspect the pipeline and buying behaviors of our customers. We feel good about what we can see right now.

Expanding pipeline with bigger deals, it sounds good. Sounds great. Second topic, hiring environment. So 6 months ago, a lot of the conversations out there with the businesses is if people can find the right talent to bring in, and things are changing. So how do you guys think about managing your human capital? How are you thinking about the pace of hiring from here?

Yes. I think hiring has been a bright spot for us, quite honestly. So if you go back and especially on R&D and kind of our engineers and as well as our go-to-market functions, so if you look at -- those are kind of the hardest source -- hardest place to source people, but we've done a good job of adding in those areas. And I think maybe to focus a little bit on the sales and marketing side, we ended last year at 100 people, which was up 28. We added 28 new direct sellers throughout -- through the course of the year. We've maintained that pace in Q1, added 7 new sellers in the quarter. So we've been very successful in adding sellers. And we're adding more experienced reps, I would say. So if you look at -- the tenure of the average sales rep, it's -- they're coming to us with 20 to 30 years of experience, a Rolodex of customers. So it leads to a much faster sales cycle, and the ramp time is a little shorter than you might typically expect if you're hiring less experienced reps. So we've seen good progress. And the way we measure it, and we may get into this later as well, but we look at a very detailed pipeline metric of reps that have been with us less than 12 months, 12 to 24 months and greater than 24 months. If you look at the productivity across all those cohorts, very consistent close rates among each one. But what you do see is larger deals as you expand tenure. So good progress. We're very encouraged by what we're seeing in our pipeline and good ability to attract and retain talent.

Okay, okay. Since you're not Chris, answer as much as you can, but I'm going to ask the question anyway. Comp structure, how are you guys thinking about it? A big topic of conversation with investors today is thinking about stock-based compensation, the cash component, kind of the higher environment today. How do you guys think about it? You guys did have somewhat of a unique stock-based compensation mechanic on the IPO. So maybe any sort of color you could share about comp structure, stock-based compensation, the balance between the 2, thinking about the next 12 to 18 months.

Yes, there's been no change in that front for us. So we're believers in equity compensation for our sellers, and so no change in how we think about that. But maybe just to touch on the IPO compensation structure. For anyone who looks at the model, it does -- it's a little bit of a unique situation. The short story of it is we were -- we had to re-expense. So all of the equity that was granted in the company's prior 14-year history as a private company had to be re-expensed through the P&L. There's some technical reasons we can get into later, but all that had to be re-expensed on an accelerated basis through the P&L. So if you look at our stock comp, it looks kind of outsized, but it's all noncash IPO function that's running through at an accelerated rate, and that will lessen over time in the next few years. So you do see that stick out, but I think the normal kind of dilution that we would expect is about a 3% to 4% dilution. The other thing I can kind of comment on in terms of equity compensation is the one thing that has changed for us is how we align our sellers' compensation, and so not so much between -- a difference between equity and cash but our KPIs. So the other thing that we introduced in the February quarter was a longer-term target. We introduced what we call Zeta 2025, which is our goal to be $1 billion in revenue and at least 20% adjusted EBITDA margin by 2025, and we laid out a lot of detailed KPIs about how we get there. And what we've also done as part of that is incentivize our sellers right in line with that. So longer duration, right, more recurring revenue. So our -- the compensation structure aligns tightly with our longer-term vision and drives great internal alignment.

Got it. Got it. So kind of in your opening remarks, you're talking about really the competitive differentiation of Zeta. And so I guess please correct me if I'm wrong, but it definitely sounds like the data component is your differentiator. So first part of the question, is that correct? And if that is correct, why is it the 1P data that you guys have so difficult to collect and build over time?

Yes, maybe a partial correction. So data is important, key. I think of it maybe a 3-legged stool, right? So data is a key piece, software AI and activation. All of those are the key pieces of the story. So the data piece is difficult to source. If you kind of went through it in a high level, but we have a lot of different sources that build to our graph. And so if you tried to replicate that, I'm not saying anyone couldn't, but going and finding all those different pieces and the ability to find identity data where it all ties back to a physical person, there's not a lot of sources that are -- you're able to acquire. But let's say you are, you can purchase it through partners. Data is available. People can -- people have a lot of data, and you hear a lot of data as a commodity. So it's what do you do with that data? How do you make it more intelligent? And so our software and AI is taking that data, finding the signals in that data and turning it into intent scores, which then we can activate in our platform. So I think the value of the platform is -- data is a key piece, but it's how we're using that data and how we're analyzing the data to find when is the best time to reach a customer, what channel is the best customer -- what channel is the best to reach them on, how do I attribute attribution back across these channels. So it's that piece of it, I think, that's probably even more valuable, right, as it analyzes that data. And we can do that using a customer data as well. So we -- I talked about kind of our internal sources of first-party proprietary data. But we're also able to then take a customer's data, match them together, which we have a very high match rate, and enrich their data and drive even better insights. Again, that's all through kind of the software that's doing the analytics and the matching and the underlying intelligence of it. So I think that's kind of the key piece and what separates data.

Okay, okay. And you mentioned this a little bit in the -- in your introduction, too, but I wanted to dig into it. The sources of the data. So thinking about it with the 2025 target, the $1 billion in revenue 2025, is the sources of data or maybe even the volumes of data that you have now enough to drive that 2025 target? Or do you have to get more data to get there? And if you were to get more data, where would it come from?

I think we're always looking to enhance the signal strength of our data, right? And I might look at how we think about a marketer or how we're working with the marketer of our brand. We're trying to drive the best return on investment for that brand. So the better our data is, the better the return on investment for them becomes. And we get the question sometimes, if I opted into being e-mailed 6 months ago or 6 years ago, am I still part of your graph? And -- right? Are you counting that? The answer is you might still be in there, but we might suppress you for marketing, right? If you haven't interacted with any brand or anything in 6 years, we don't really want to use you as someone to advertise to or -- because the return on that's going to be very low, right? You're less likely to respond. And so we're trying to find only rich-intent signals. So the answer is -- short answer is I think we have enough data, but we're always looking for -- to enhance the signal strength of our data. We do have 235 million U.S. individuals, which is largely the U.S. adult population. So to the extent that we can enhance the signal strength of that, which you've seen with ArcaMax and Apptness as well as alternative sources of identity data. So everything that just enhances the graph, we'll continue to pursue.

I want to dig into this a little bit, Scott. And I think it's very interesting because one of the things we hear a lot with data platforms out there is we have 25 years of customer data, 30 years of customer data. But what it sounds like is that the quality of intent using long streams of data might not actually -- it's not the -- I guess said another way, it's not the volume of data but the quality of data that you guys are able to see to drive that intent. Is that the right way of thinking about it?

I think that's a perfect way to think about it. And if you talked to our Chief Data Officer or Chief Technology Officer, they'd tell you the same thing. We're not after volume for volume's sake, which some companies are. We're after strong signal data. And so the other piece of our kind of data graph is its circular in some way. So as we send e-mails, like I talked about the e-mail acquisitions that we're able to send, that's using our own graph and using our own data. But we're sending on behalf of a customer, not using any of their data, by the way, just our own data. And so we'll send acquisition e-mails on behalf of a client, and that just further enhances our graphs, right? It gets smarter over time and continues to get better. And that's what we're after, right? We're not after large quantities of data just to advertise a big number, we're after what drives the best return on investment for a marketer.

Got it. Got it. I want to switch gears a little bit here. So Zeta CDP platform or CDP, right, customer data platform. Maybe help me understand. I guess I might not understand the category as much as I should. So Zeta is a CDP platform with 1P data. How does that differ from just a traditional off-the-shelf CDP? What are kind of the puts and takes there? Why would Zeta's platform, the CDP platform with 1P data be better?

Yes, I mean, we call it CDP+. And basically, it's everything -- it's what you just said. It's a CDP plus data, right? And so I think the traditional definition, if you look at Forrester, Gartner, CDP Institute, any of those companies, there's 4 different categories of CDPs. And so the basic category is just effectively a data repository, right, putting all your customer data in one place. The other layers then become the ability to do analytics, activation, all of the kind of audience creation in that CDP. It's effectively a marketing of our marketing platform. So not just the data repository, but the full ability to analyze that data into audiences and then activate on that all in the same platform, that's kind of what separates them. We did a study with Forrester a couple of months ago and put this out on our website, and we talked to over 300 large enterprises and asked them about their CDP. And what you find is that only 10% of CDPs are living up to the hype and what was promised, right? The idea was consolidate everything into one place. It's kind of your central hub and repository for all your customer intelligence, which then you can activate on in real time. It's not playing out. I think the average enterprise has 2.3 CDPs. And what you're seeing is they end up being just data repositories or another database effectively in a complicated marketing stack. And so we're starting to see cases, and we talked about this on our last earnings call, where we're replacing first-generation CDPs, which are just data management, database [ effectively ] CDPs. Because of the Zeta CDP with our own data is also the full activation CDP. So highest functionality. I think we were rated across some of these third-party reports, Forrester, CDP Institute as not only one of the largest but highest functionality CDPs out there. And so that's where we're having success and why we're differentiated.

Got it. No, thank you. Thank you for that. Wanted to ask you a question on -- when a customer comes to you, I guess, when a prospect comes to you, what is kind of the catalyst that brings that customer into Zeta's door? I have a problem. What is that problem? And what are they typically using or coming from?

Sure. So again, going back to maybe the very first thing that we talked about is use cases. So Zeta's value proposition is we're helping brands and marketers acquire, grow and retain customers. So in most cases, we have a fairly even split across those use cases, but we're helping a brand do one of those things. So as an example, we might have a brand come to us and say, "Hey, I'm looking to acquire new customers." And so a lot of times, it will start as a proof of concept or they'll say -- or we'll advocate, give us a shot, let's use our own first-party data. We often know more about your brand than maybe you even do, right? We have all this other data, we can see if they're looking at competitors or if they're looking -- if they're churning or, right, maybe this is a customer that might be willing to expand. So we can use our data, start with a single use case, run a campaign and then demonstrate the ROI for that brand. And from there, it grows. So our go-to-market is really land, expand, extend, and that's pretty common across how we penetrate customers looking to -- for that initial entry into the customer and how do we expand that, and we do that by permission as we can show better return on investment.

Got it. Thank you. Competition. I guess a natural question is competition, right? Where are they coming from? So the competitive environment out there. How would you describe the competitive environment? Has it changed at all over the past 18 to 24 months? And do you see it pretty static going into the future? Or do you see it evolving in the future?

Yes. Our primary competitor set, we're competing against legacy marketing clouds. And when I say that, we do compete against Oracle, Salesforce and Adobe, but we don't compete against their core franchise business. We compete against their legacy marketing clouds, pieces they bought 5 to 10 years ago that probably underinvested in quite right? It's not their core focus. Versus Zeta, where we wake up every day, this is our focus marketing cloud. So that's who we're competing against. And the differentiation, again, for us is really the 3 pieces of that stool, the 3 legs of that stool. It's the data, the software AI and the ability to activate all in 1 platform. If you look at the average marketing stack for a CMO, it can be hundreds of vendors, everything from data collection to data cleansing to analytics. So then if you want to go activate, you got to use several different -- someone for e-mail, someone for programmatic. And so it becomes very, very complicated. So our ability to consolidate that all into one platform lowers the cost of ownership for a marketer, and that's where we have success. I think the only thing that's maybe changed over the last, I don't know, a year or so would be the CDP place. And as I mentioned, right, a lot of those is starting to replace that first-generation, data-only CDP, where we're having good success going in and showing the full capability of the platform.

Got it. Got it. So marketing platform, you have. You also mentioned a little bit of ad tech, too, and also CDP or CDP+. So it sounds like 3 big opportunities out there. How do you think about the go-to-market for that? Any big changes in the way -- CDP is a pretty new product. So any changes in the go-to-market strategy to adjust for that? Or how are you guys thinking about your go-to-market strategy?

Yes, I mean, at the end of the day, everything is -- that we sell is the Zeta Marketing Platform. So -- right? Still all-in-one solution, all-in-one platform. So I don't know that I'd fragment it by different use cases that way, but what I will say has changed in terms of the go-to-market for us is how we look at our sales force. So if you go back 3, 4 years ago, it was generalist AE. So generalist seller, everyone was a hunter trying to go out, find new opportunities. We've divided that into more of a hunter/farmer model. And what we realized is that there's a huge opportunity within our base. So we talked about the proof of concept where we might have an initial land at a customer, and then we weren't doing a good job farming that out and expanding within those customers. So we've divided our go-to-market into this hunter/farmer model where it's roughly 50-50 split hunter/farmer. And we've done a really good job expanding the base. I think the stat we put on our website last quarter was our -- we typically look at our customers, and we call them scaled customers, which is anyone who's done $100,000 or more on a trailing 12-month basis with Zeta. And we do also look at a cohort that's done more than $1 million on a trailing 12-month basis, where we'll call them superscale. The superscale growth last quarter it was up 41%. So we now have 99 superscaled customers, and that's a function of more use cases, more channel expansion on our platform through that farmer model. So that -- we've seen good success there. And then on the flip side, good success growing the new customer accounts. So we aim to add 20 to 25 new customers per year. A lot of our new hunters are -- have been with Zeta less than a year. I think 1/3 of them have been less -- with Zeta less than a year, but we do see good initial success with those customers and good initial close rates. But again, I think there's a lot of runway in terms of built them, ramping and larger deals coming in. So we've evolved the sales model. It's a lot more analytic-driven, a lot more pipeline inspection, coverage ratios. We do monitor pipeline creation, pipeline progression and close rates very, very closely. And then beyond kind of our own internal direct go-to-market, we've done a good job expanding partnerships. So we have a partnership with Dun & Bradstreet, a partnership with Snowflake. Just this week, we announced a partnership with AWS, where we're the first marketing cloud and the AWS marketplace. So expanding our reach that way as well.

Got it. Got it. You mentioned something right there about your scaled customers and your superscaled customers. Wanted to dig in a little bit right there. So what is it maybe from a catalyst perspective that really drives that customer from the scaled size to the superscaled side? Is it more products, more spend? Is it the change of sponsorship of how Zeta is positioned within the company? All of a sudden, it's in the C-suite and you want to do -- adjust more divisions to go on it? Like how do you think about that expand opportunity from -- to go from scaled to superscaled?

Yes. I think it's largely channel expansion, right, is a short answer to it, and so let me explain. When we look at a customer, we might start just doing an e-mail campaign. Or like I said, the proof of concept is one single use case, one single channel. And then the opportunity for us is to expand that. So we can run -- once we do an audience creation, we can run a campaign anywhere, any channel. So we can do an e-mail, programmatic, display video, we can do CTV. You name it, we can do -- we can run an add on any campaign. So the opportunity and what you've seen the good growth in the superscaled is our ability to expand our channels or our use cases within -- channels and use cases within a customer. But I do think there's a lot more runway there. If you look at our use cases, so that's just the acquire, grow and retain piece, 90% of our customers still only use us for one use case. So there's a huge opportunity for us to do a cross-sell of not just acquire but grow or retain, right? And I think there's a big opportunity for us. But where we've seen good success so far is expanding the channels within our customers. And I think the stat we gave in our earnings call this last quarter was, for the first time, more than half of our customers are using us for more than one channel. So we're continuing to expand within those customer footprint.

How easy is it for a customer to turn a new channel on? Is it a flip of the switch new channel? Or does it take months and months of integration? I mean somewhere in between?

No, it's all on the platform, all easy to do. Once we have that audience creation and the platform will and our artificial intelligence will help you figure out what's the best channel to reach someone, right? Or we'll say, "This segment of the audience, we should reach them on this channel. This one, reach in a different channel. And what time of day should we reach in, right?" So the intelligence and all the data that we're gathering, it goes back to that data graph that we talked about, all of that is -- it's circular. So it's the data, the audience and then the ability to see and activate on any campaign. The other piece that drives our ROI to kind of expand on this a little bit is because we can activate on any channel and because we can use it against our own Zeta data graph and our Zeta ID, we can run attribution and tie it all back and drive better attribution. And so if we reach you via an e-mail channel or we reach you already on a display campaign, we can save your marketing budget by not duplicating or wasting spends, reaching you on something you've already bought or we've gotten in front of you on different channels. We can save dollars by not wasting it and hitting you over and over.

Okay, okay. That makes a lot of sense. We've got about 10 minutes left. So I want to make sure -- just in case if there's any questions from the audience, feel free to raise your hand. And if you have a question, feel free to ask Scott. Any questions from the audience?

You got them.

No questions. I got plenty more for you. All good. So I wanted to ask you a question about kind of the R&D product innovation cycles versus M&A, kind of going hand in hand. Zeta is not afraid to acquire. You've done lots of acquisitions in the past. So how to think about the R&D strategy, product innovation and the M&A strategy from here? I mean is it any changes to the M&A strategy? I mean companies are valued a little bit differently today versus a year ago. So how should we be thinking about that?

Again, no real change for us. So if you look at our R&D strategy -- or maybe just to hit on the leverage side of your question. We expect to continue to invest in our sales and marketing and our go-to-market function and probably at the same rate that we expect the top line to grow. Similar for R&D, maybe a slight bit less, but similar kind of investments in the R&D side of it. And then we do expect good leverage on our G&A side. We also expect some cost of revenue improvements or gross margin improvement. So at the end of the day, nothing has changed even with the environment and the change in kind of philosophies from the investment community. But we've always been a very balanced growth and profitability company. So even before this last year, when that was kind of the focus. And then when we laid out our Zeta 2025 targets, it's been a very balanced growth and profitability focus. Our Zeta 2025 would call for at least 150 basis points of adjusted EBITDA margin expansion every year. If you look at the prior 2 years, we've expanded our adjusted EBITDA margin by 300 basis points. We expanded it by 200 basis points in Q1. So good discipline, good focus on that, and that's always been -- it's embedded in our targets, embedded in our plan. But to circle back to your question on the M&A front and the R&D front, we'll continue to do internal development. I don't think there's any major holes in the platform today. And then the M&A side for us has been largely small tuck-in pieces, things that enhance our data graph, and I think that's kind of the playbook. I don't think you'll see anything majorly transformational or anything that disrupts the business model.

Okay, okay. I wanted to ask one question kind of on the political spend seasonality. We are heading into the second half of '22. There is the midterms coming up. Even presidential cycles have some sort of effect. Tailwinds become headwinds. Headwinds become tailwinds. So how do we think about the political spend? Could you explain that a little bit? And how should we be thinking about the midterms later this year for -- from a spend aspect?

Yes, let me maybe go back to the presidential cycle and the level set there. If we look at the 2020 presidential cycle, we saw about $50 million -- $15 million come through our platform presidential campaigns. We did call that out. We kind of broke that out separately. [ We grow ex presidential or with presidential ] because we do think that, that's a little bit more transient. It's not going to -- you don't expect that to repeat every year, obviously. And so that was kind of the baseline, $15 million in 2020. We think it will be about 25% of that for the midterm. So in the back half of the year, we'd expect anywhere from 20% to 30% of that $15 million we saw in 2020 come through. That's our current planning assumption, and we'll update that as it comes through, but that's kind of how we think about it.

Okay. Good. Remind me, your international as a percentage of revenue, I apologize, I can't remember what it is.

5%.

5%. Okay. But international, attractive category, right? So how are you guys thinking about international expansion plans from here, pace of go-to-market spend. I mean what are you guys doing for international?

Look, I think the focus is clearly more U.S. today. So I think the opportunity for us where our platform sits, the data graph in the U.S., we think there's a big opportunity for us to expand share. And so that's where the focus is today. Now that said, we do have a strong -- if you look at our data graph, I guess, 235 million people in the U.S., we do have another 300 million people internationally that all adheres to the GDPR standard, and we're fully privacy forward on all of that stuff. But I just think the investments and the opportunity today, we're just more focused U.S. And so that's where that's where you'll see it's a longer-term opportunity for us, but just not the -- not how we're positioned today.

Okay, okay. So you guys are a marketing platform. Clearly, it enables automation efficiencies. So how do you guys think about your platform helping businesses become more efficient? What is it about the platform that makes the employees that you're selling to better?

Again, it's going back to the complicated marketing stack, and I would -- I really think about the TCO. So aside from -- I'd like to talk about return on investment and the efficacy of our platform. But I think that aside, if you just look at the simplicity, what we -- everything -- maybe this is a good way to answer that. So every quarter we go through, we pin down all of our sellers and kind of get the win themes and loss themes. And then what are you hearing? What are you saying? And we boil that down into kind of the win themes and -- that are common across our sellers. And the #1 thing that we've heard is the all-in-one platform is resonating. So that ability to use one platform with data, which is kind of a differentiator, but also the audience creation and the intelligence within that platform and the ability to activate in that platform without having to use 10 different vendors for that process resonates. Lower -- simplifies things quite a bit. Maybe to kind of go off script a little bit, I -- my background is hardware. And if you think about the hardware landscape and the appliance landscape, there was kind of a -- you could buy the software and you could buy the underlying hardware and do it yourself may be cheaper, but it was so much easier for someone to do that all in one platform. Now I'm not saying it's -- and I think Zeta can do the same thing, where it's all in 1 platform, even cheaper because now you're paying less for all these 10 different vendors. So I think there's a real economic advantage in terms of how we can consolidate vendors and consolidate your environment and simplify our environment. One of the third-party research companies that I think Forrester put out when they evaluated our ESP says Zeta is a marketing company that simplifies complex marketing, and that's like kind of how I think about the platform.

Okay, okay. So customer data, you guys deal with a lot of customer data. So a question we get a lot, and I'm sure you guys do, too, is privacy. Big topic these days. How are you protecting your customers' privacy? How do you guys think about privacy? What are some of the things Zeta Global is doing to give comfort to not only the customers that you're selling to but all the people that are utilizing your platform that are opting in to the 1P data? How do you think about your leadership position in privacy?

Yes, we think about it all the time. And so for us, we -- maybe to start. We don't share any PII. So everything for us resolves back to a Zeta ID. So it is all traced back to a physical person, but that is never shared. And we don't sell our data to anyone, and we don't enrich our data with customers' data. So if you're a customer of ours and when we want to integrate our data together, we'll never take that. That is one-way stream. So we can enrich your data, but we can't use your data to enrich our data. So there's a privacy wall there. Beyond that, I think when we're collecting data, we fully adhere to the CCPA standard in the U.S., which is more strict than the federal standard today. And the way we collect the data and the way we source our code on all of these publisher networks, I mentioned Disqus is on 5 million websites, if there was a policy change that forced us to do something different, in real time or near real time, we can update our code across all those websites where they might say, "Hey, you need to flash in red fonts, what -- how you're collecting this data for everyone," so they fully understand even though it is in the terms of service today, but we can change and adapt to any policy change. And like I said, today, we're already one step ahead. We have a direct relationship with a customer. We're adhering to the CCPA standard everywhere in the U.S., which is one step further more than what's required. So those are kind of some of the highlights in terms of how we think about privacy today.

Okay. We're almost out of time, so I got one big-picture question for you. We're coming out of the pandemic here, hopefully. And I mean digital transformation is still a big topic out there. In your view, from the Zeta Global view, you guys sell to big, big, huge companies out there but you also sell to small companies, too. So thinking about the pandemic, coming out of the pandemic, the world has changed, what has changed permanently in the end markets that is beneficial for Zeta Global?

Good question. I think the thing that's changed is you have to reach people digitally and where they are, right? Clearly, there was a huge shift to digital channels, and we all know that, I mean, [ how ] the trade was, the COVID beneficiaries. But I think if you look at the shift to digital and how much -- how many dollars shifted online, and I think we're still in the middle of that transition in terms of the digital transformation, but the ability to go find customers where they are, reach them on the appropriate channel, I think that all plays to the Zeta platform and the strength, right? Our AI is aimed at figuring out what's the best channel to reach someone, what's the right signal to use, how do we find them. So that's, I think -- I don't think that's going away, and I think that plays to the strength of the platform.

Got it. Scott, we are all out of time. Thank you so much.

Thank you, Koji.

Thanks. Thanks so much.

Appreciate it. Appreciate you having us.

Thank you.