Setting the Record Straight on Zeta’s Data Collection and Accounting Processes

On November 13, 2024, a self-serving short-seller “report” was published in an attempt to discredit Zeta Global. This “report” is riddled with inaccuracies and falsehoods and demonstrates a fundamental misunderstanding of Zeta’s business. It even fails to correctly identify our Big Four auditor. Quite simply, the “report” was written with a clear agenda: to drive down the value of Zeta’s stock for the benefit of the author.

The following blog post summarizes the presentation we posted to our website on November 20, 2024, which corrects these false and misleading claims about our business. To be clear, we firmly stand by our financial statements, reviewed by our external auditing firm, as well as our data collection policies and privacy oversight, which are reviewed by external legal counsel.

In this article, we address the most egregious inaccuracies and reaffirm the integrity of Zeta’s operations, including our robust accounting processes and controls, data collection policies, and privacy oversight.

Zeta Correctly Accounts for Revenue

The “report” falsely claims that Zeta engages in misleading revenue practices, such as “revenue round trip” transactions. In reality, we report these transactions correctly—we rigorously adhere to Generally Accepted Accounting Principles and disclose all relevant accounting policies, which are reviewed by our Audit Committee.

Transactions between Zeta and its clients—from whom Zeta may purchase services—are distinct and fairly priced, and subject to thorough governance and oversight to ensure compliance. For example, while we have a major airline client that spends a significant amount on marketing with Zeta, we also purchase plane tickets from this airline.

The suggestion in the “report” that Zeta hid its third-party contracts and did not disclose them until the 2023 10-K, is also wholly false and misleading.

Zeta Data Collection Practices: Lawful and Trustworthy

Zeta Data Cloud is powered by diverse and reliable data sources

Zeta’s AI-powered Data Cloud leverages a robust and compliant ecosystem of trusted sources, contrary to the assertion in the “report” that Zeta operates “consent farms.”

We perform compliance reviews of websites from which we collect data, including sites that are owned by Zeta or by a Zeta partner. Zeta uses only fair, lawful, and legitimate means to attract traffic to its websites.

The data is lawfully gathered through partnerships and proprietary platforms, including Zeta DSP, Zeta SSP, Disqus, and LiveIntent. These sources, along with third-party partnerships, provide a balanced mix of identity, identifier, and signal data.

Zeta Data Cloud utilizes dynamic and static data

Zeta’s AI-powered Data Cloud combines identity-based behavioral signals, robust data governance, and real-time processing. It does not, as the “report” asserts, require new data from sources with at-risk business models.

The Data Cloud integrates static (“data at rest”) and dynamic (“data in motion”) information to deliver actionable insights. This sophisticated approach enhances targeting, personalizes experiences, and improves measurement accuracy.

Zeta Reaches Sustained Growth Through Strategic Innovation

Zeta’s remarkable revenue growth—nearly doubling from FY21 to TTM through Q3 2024—results from strategic execution and the ability to lead in a rapidly evolving marketing landscape, not reliance on any single subsidiary or data source. The Zeta Marketing Platform (ZMP) and AI-powered solutions have driven a significant increase in scaled and super-scaled customers.

Zeta has a Reputable and Trustworthy Customer Base

Zeta serves approximately 40 Fortune 100 companies and powers the marketing efforts of 475 scaled customers, demonstrating a customer base built on trust and credibility

Zeta’s Business Practices Deliver Value for Consumers

The websites we operate deliver real value for consumers and are categorically different than the intentionally deceptive practices the “report” alleges. 

Zeta operates with transparency and integrity and does not engage in the practices cited in regulatory enforcement actions against other companies like Fluent. For instance, Apptness job sites display legitimate advertisements from employers, providing real opportunities. Similarly, ArcaMax employs a rigorous double opt-in process to ensure user consent, delivering the newsletters and content that subscribers request.

Zeta Has a Diversified Revenue Mix

Contrary to the exaggerations in the “report”, Apptness and ArcaMax collectively account for less than 3% of total Zeta Global revenue in the trailing twelve months ended September 30, 2024, representing a decline on a percentage basis year-over-year. Additionally, revenue from Digital Media Solutions (DMS) represents less than 0.1% of Zeta’s revenue over the same time period. 

Similarly, Zeta never did a material amount of business with Kubient—and ended that relationship well before Zeta’s IPO in June 2021. Zeta recognized zero revenue from Kubient in 2020, a very immaterial amount in 2019, and no revenue prior to that. 

Zeta Leaders Act with Integrity

Zeta’s leadership team, led by Zeta Global CEO David A. Steinberg, is comprised of qualified executives with deep experience at industry-leading companies. The misleading assertions in the “report” linking Zeta executives to unrelated entities or practices are riddled with egregious errors, including where completely separate and distinct companies with similar names are confused and conflated.

Conclusion

Zeta Global remains committed to transparency, compliance, and delivering exceptional value for clients and shareholders. Despite baseless attacks, Zeta‘s robust business strategy and ethical practices stand firm, with a focus on sustained growth and industry leadership.