The Total Economic Impact™ Of Analytic Partners
Cost Savings And Business Benefits Enabled By Analytic Partners
A Forrester Total Economic Impact™ Study Commissioned By Analytic Partners, August 2024
According to a 2024 Forrester survey, 69% of data and analytics decision-makers will increase their budget for data, data management, data science, and analytics compared to last year.1 Decision-makers are making these investments because their marketing teams don’t trust the quality of data analysis, often forcing them to fly blind on their investments. Teams can address these challenges by investing in a data analytics partner that can provide the technology, data, and supplemental staffing with specialty know-how to achieve effective measurement.
Analytic Partners delivers performance insights using its core commercial mix model, marketing expertise, and its GPS Enterprise analytics platform. Organizations working with Analytic Partners can leverage its data and intelligence to improve their commercial business by optimizing across investment areas, including tactics such as online and offline media, operational efforts, CRM, promotions, and discounts. Analytic Partners factors into its analysis external data like competition, consumer behavior, economic changes, and geographical dynamics, such as weather, to provide organizations with a holistic view of influences on business performance. These views, coupled with Analytic Partners’ commercial decisioning platform, GPS Enterprise, enable organizations to scenario-plan for forward-looking decisioning.
Analytic Partners commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Analytic Partners.2 The purpose of this study is to provide readers with a risk-adjusted framework, covering a three-year period, to evaluate the potential financial impact of Analytic Partners on their organizations.
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Return on investment (ROI)
495%495%
Net present value (NPV)
$11.6M$11.6M
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed representatives at four organizations with experience using Analytic Partners. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a global, industry-agnostic organization with annual revenue of $3.5 billion and business operations across multiple verticals.
has an annual revenue of and of that revenue is dedicated to the marketing budget, excluding non-channel expenses like headcount and technology. Custom results are based on user inputs and the TEI case study.
Prior to working with Analytic Partners, the interviewees either attempted to analyze their business data in-house or leveraged other measurement partners to inform business and marketing decisions. Interviewees taking the do-it-yourself approach struggled with the amount of employee bandwidth and unique skills required to pull together data and create meaningful insights. For interviewees working with a measurement partner, they waited months for the partners to deliver insights that were not as comprehensive as expected, limiting their intelligence around business performance and ability to gain executive buy-in.
Analytic Partners streamlined data analysis for interviewees, providing them with regular updates on business performance that enabled a deeper understanding of levers driving commercial business. Interviewees made smarter decisions around changes to business operations and marketing investments that led to cost efficiencies while driving revenue gains. Based on performance improvements, interviewees gained executive buy-in and were able to make more impactful changes to their business strategy and forward-looking decisions to meet business goals.
Key Findings
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization, driven by their action taken based on Analytic Partners insights during this short-term period, include:
- Accelerated speed to marketing efficiency, resulting in $1.3 million PV. The composite organization receives updates from Analytic Partners on a monthly basis — much faster than the six-month wait time it saw with their previous measurement partner. This speed enables the marketing team to react 50% faster to performance indicators and make necessary adjustments, helping them realize marketing efficiency value sooner.
For , this benefit might be worth over three years.
- Increased contribution to business revenue, totaling $6.6 million in PV profit. Alongside smarter ad buying driving revenue growth, the composite organization experiences business growth from Analytic Partners’ tactical and creative insights. Through analysis of commercial business levers like product demand, supply and distribution, and pricing, the organization incorporates these insights to maximize business performance. These changes enable the composite organization to add $105 million in revenue in Year 3 alone and represents a 20% improvement in contribution to revenue.
For , this benefit might be worth over three years.
- Improved marketing spending efficiency, creating $6 million PV. Analytic Partners provides greater specificity on marketing performance that enables marketers to more wisely allocate their media spending. Rather than pouring ad dollars into lower-performing formats and channels, marketers dedicate spending toward ad placements that are more engaging with customers and drive more business. The amount of advertising budget at the organization remains the same, but the value of the dollars stretches further by yielding greater return on investment.
For , this benefit might be worth over three years.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
- Greater understanding of marketing insights. Analytic Partners depth of analysis and recommendations around effective changes help teams toward fully realizing benefit opportunities.
- Valuable customer service. Interviewees working with Analytic Partners appreciated its responsiveness to and support for requests, which foster strong relationships between customers and support staff.
- Newly surfaced business opportunities driving long-term benefits. Analytic Partners’ analysis extends beyond paid media performance, uncovering opportunities based on data like consumer behavior and economic changes. These insights help organizations create more value from different business levers over time.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
- Analytic Partners service costs. The composite organization pays an annual service fee based on the scale of intelligence Analytic Partners provides.
For , these costs could represent over three years.
- Implementation and training costs. The organization spends some time sharing its data inputs with Analytic Partners to set up analysis. Employees who review readouts from Analytic Partners spend a small amount of time in training to understand the insights derived from the platform.
For , these costs could represent over three years.
- Ongoing management costs. The organization allocates employees to oversee reviewing insights from Analytic Partners and carrying out those recommendations.
For , these costs could represent over three years.
The representative interviews and financial analysis found that a composite organization experiences benefits of $14.0 million over three years versus costs of $2.3 million, adding up to a net present value (NPV) of $11.6 million and an ROI of 495%.
might experience benefits of over three years versus costs of , adding up to an NPV of and an ROI of 0%.
Key Statistics
-
Return on investment (ROI)
495%495%
-
Benefits PV
$14.0M$14.0M
-
Net present value (NPV)
$11.61M$11.61M
-
Payback
<6 months <6 months
Benefits (Three-Year-Adjusted Present Value)
Increased speed to marketing efficiency with Analytic Partners Improvement in contribution to total revenue Improved marketing spending efficiencyTEI Framework And Methodology
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment Analytic Partners.
The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Analytic Partners can have on an organization.
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Due Diligence
Interviewed Analytic Partners stakeholders and Forrester analysts to gather data relative to Analytic Partners.
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Interviews
Interviewed six representatives at four organizations using Analytic Partners to obtain data about costs, benefits, and risks.
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Composite Organization
Designed a composite organization based on characteristics of the interviewees’ organizations.
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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 interviewees.
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Case Study
Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, 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 Analytic Partners 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 Analytic Partners. For the interactive functionality using Configure Data/Custom Data, the intent is for the questions to solicit inputs specific to a prospect's business. Forrester believes that this analysis is representative of what companies may achieve with Analytic Partners based on the inputs provided and any assumptions made. Forrester does not endorse Analytic Partners or its offerings. Although great care has been taken to ensure the accuracy and completeness of this model, Analytic Partners and Forrester Research are unable to accept any legal responsibility for any actions taken on the basis of the information contained herein. The interactive tool is provided ‘AS IS,’ and Forrester and Analytic Partners make no warranties of any kind.
Analytic Partners 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.
Analytic Partners provided the customer names for the interviews but did not participate in the interviews.
Drivers leading to the Analytic Partners investment
Interviews
| Role | Industry | Region | Annual Revenue |
|---|---|---|---|
| Senior analytics director | CPG | North America headquarters, global operations | <$5 billion |
| Senior director of data insights | CPG | Europe headquarters, global operations | $100 billion |
| Director of
integrated media VP, customer team |
Retail | North America headquarters, domestic operations | $125 billion |
| VP,
marketing VP, head of media |
Hospitality | North America headquarters, global operations | $10 billion |
Key Challenges
Prior to working with Analytic Partners, interviewees attempted to analyze their organizations’ customer engagement and paid media investments to inform decision-making. They took one of two approaches: analyzing data in-house with best-of-breed solutions or leveraging services from measurement partners. The interviewees noted how their organizations struggled with several challenges from these approaches, including:
- Expensive financial and time investment to build adequate analysis. Interviewees had a large amount of data residing across the various digital platforms they used to run their businesses. In-house data acquisition and evaluation was costly, particularly when taking a best-of-breed approach with analysis tools. Analysis efforts required extensive manual work from team members, including cleaning the data, creating customized data cuts, and reviewing data accuracy. These costly investments still resulted in a siloed view of business performance, and interviewees became concerned that they were at risk of overlooking business opportunities. These factors influenced them to consider working with an external partner with a new analytic methodology, incorporating economic and dynamic business factors, to assess data quality and accuracy.
- Lengthy waiting time to receive analysis. Interviewees who oversaw in-house data analysis work noted that it took weeks or months to complete their review. For interviewees who worked with a measurement partner, they had hoped to receive insights and intelligence much more quickly — but that was often not the case. Interviewees noted that the external partners could take upward of six months to deliver analysis on business performance, long after campaigns had been run and thus less relevant for influencing plans for marketing materials running over the next several months. Without a more frequent, regular cadence of insight delivery, interviewees found it difficult to strategize on how to improve their campaigns.
- Inability to act on insights. In addition to analysis arriving belatedly, insight delivery from either approach didn’t readily come with recommendations on how to act upon the intelligence and improve performance across channels. Interviewees had difficulty gaining executive buy-in for the changes they planned for operations and marketing since they couldn’t confidently estimate the impact of proposed changes. Interviewees felt they were leaving opportunities on the table by not being reactive to recent performance.
Investment Objectives
The interviewees outlined several objectives for a new measurement partner:
- Faster delivery of insights, arriving on a regular basis, to drive forward-looking decisioning.
- Deeper understanding of factors influencing performance and specific recommendations for improvement.
- Expanded analysis beyond advertising and marketing performance to identify opportunities around commercial business levers (e.g., pricing, operational efficiencies, product demand, etc.).
- Increased media spend efficiency and better key performance indicator outcomes (e.g., revenue, sales, traffic).
Composite Organization
Based on the interviews, Forrester constructed a TEI framework, a composite company, and an ROI analysis that illustrates the areas financially affected. The composite organization is representative of the interviewees’ four companies, and it is used to present the aggregate financial analysis in the next section. The composite organization has the following characteristics:
Description of composite. The composite organization is a multinational business with $3.5 billion in annual revenue. It is industry-agnostic, with operations across multiple business lines. Of the organization’s revenue, 10% is allocated toward all marketing expenses and totals $350 million annually. Prior to Analytic Partners, the organization worked with a third-party measurement partner that was slow to deliver insights that lacked the detail necessary for the organization to act upon them.
has an annual revenue of and of that revenue is dedicated to the marketing budget, excluding non-channel expenses like headcount and technology. Custom results are based on user inputs and the TEI case study.
Deployment characteristics. The organization works with Analytic Partners for them to intake its data sources. Following a brief training period on their analysis tools, decision-makers at the organization start making changes to its advertising and business operations in Year 1. As executives see positive results from the changes, they approve more recommendations by Analytic Partners to be implemented in the following years to further enhance performance.
Quantified benefit data as applied to the composite
The following table shows custom results for .
Total Benefits
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Increased speed to marketing efficiency with Analytic Partners | $0 $0 | $0 $0 | $1,680,000 $1,680,000 | $1,680,000 $1,680,000 | $1,262,209 $1,262,209 |
| Btr | Improvement in contribution to total revenue | $1,512,000 $1,512,000 | $2,835,000 $2,835,000 | $3,780,000 $3,780,000 | $8,127,000 $8,127,000 | $6,557,491 $6,557,491 |
| Ctr | Improved marketing spending efficiency | $1,680,000 $1,680,000 | $2,520,000 $2,520,000 | $3,360,000 $3,360,000 | $7,560,000 $7,560,000 | $6,134,335 $6,134,335 |
| Total benefits (risk-adjusted) | $3,192,000 $3,192,000 | $5,355,000 $5,355,000 | $8,820,000 $8,820,000 | $17,367,000 $17,367,000 | $13,954,035 $13,954,035 | |
Increased Speed To Marketing Efficiency With Analytic Partners
Evidence and data. Interviewees received monthly updates from Analytic Partners containing insights highlighting opportunities to improve their business. This was in stark contrast to their previous measurement solution partner, which delivered analysis on campaigns that had run several months prior. The senior analytics director at a CPG company said: “We’ve gone to a monthly reporting cycle [with Analytic Partners]. They don’t have to spend a lot of time explaining how they got results. We see how close their intelligence matches what we see with outcomes, and that gives their voice weight for us.”
The VP of marketing at the hospitality organization shared that with more frequent updates, they made smaller optimizations in the short term that had a larger impact on their business in the long term than when waiting six months for strategic insights. For example, the marketing team took intentional short-term hits on their ROI from media investments by repositioning their marketing messaging, but in the long term, they built stronger engagement with customers to drive greater business impact. Between readouts from Analytic Partners on performance, members of the organization’s analytics team used the Analytic Partners platform to analyze performance and make incremental optimizations.
Interviewees appreciated Analytic Partners’ speed of delivery and felt that it fell on their own organization to accelerate analysis where possible. The senior director of data insights at a CPG company said: “In a direct-to-consumer business, we live and die at the close of every month. Not every business operates at that speed. But I want to explore ways to get them our data faster, so we can turn around analysis that much more quickly.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- This benefit only shows the impact on marketing spending for the composite organization. Revenue-related improvements can happen faster with Analytic Partners, but better results can also be influenced by seasonality, and interviewees could not isolate that impact.
- The size of the organization’s marketing budget that can be optimized, which consists of materials that don’t reach or engage customers, represents 30% of total marketing spend and amounts to $52.5 million.
- In Year 3, the organization becomes 8% more efficient with its marketing spend.
- By receiving insights an average of six months faster with Analytic Partners than with a previous measurement solution, the organization is able to make changes faster and pull in value that would not have been recognized until Year 4.
- Changes are made to marketing spending, helping the organization to recognize 50% additional value in Year 3. The benefit is not shown for previous years so as to avoid double-counting value with Benefit C.
Risks. Factors that could impact the size of this benefit for organizations include:
- The speed with which the organization received insights from its previous measurement solution.
- The scale of marketing spending at the organization.
Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.3 million.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Increased Speed To Marketing Efficiency With Analytic Partners
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| A1 | Annual marketing budget that is wasted and optimizable | CompositeScaled for | $52,500,000 $52,500,000 | ||
| A2 | Improvement in marketing spending efficiency with Analytic Partners by Year 3 | Interviews | 8%8% | ||
| A3 | Improved marketing spending efficiency | A1*A2 | $4,200,000 $4,200,000 | ||
| A4 | Improvement in speed to marketing spending efficiency with Analytic Partners | Interviews | 50%50% | ||
| At | Increased speed to marketing efficiency with Analytic Partners | A3*A4 | $0 $0 | $0 $0 | $2,100,000 $2,100,000 |
| Risk adjustment | ↓20% | ||||
| Atr | Increased speed to marketing efficiency with Analytic Partners (risk-adjusted) | $0 $0 | $0 $0 | $1,680,000 $1,680,000 | |
| Three-year total: $1,680,000 $1,680,000 | Three-year present value: $1,262,209 $1,262,209 | ||||
Improvement In Contribution To Total Revenue
Evidence and data. Smarter ad buying helped interviewees’ teams drive increased revenue by allocating spend toward higher-performing channels and formats. Alongside spending recommendations, Analytic Partners provided tactical and creative insights for organizations to consider.
The senior analytics director at a CPG organization worked with Analytic Partners to model household penetration of their product and identify factors that influence growth. By looking at advertising performance and incorporating considerations for product demand as well as supply and distribution, decision-makers saw there were growth opportunities in specific markets. The senior analytics director at a CPG company said: “When we started doing modeling for household penetration, that was a key turning point for us to better understand what drives growth. ... We were growing significantly by focusing on addressable TV spending, but managing that growth became the number one issue for us. We had to decide how to accelerate our media spending but also balance that with product availability.”
Analytic Partners’ analysis of the organization’s operational processes found production limitations that could stall growth. The interviewee used these insights to help justify the organization’s investment in building manufacturing facilities to increase product supply for higher-demand areas. These changes enabled the organization to more than double its household penetration over time.
At the hospitality organization, Analytic Partners shared evidence that leaning into aspirational (as opposed to functional) messaging for several of its brands would improve performance. After some testing of aspirational messaging, the interviewees saw higher engagement with customers and business gains, encouraging them to incorporate the messaging across more marketing materials. Changes like this helped the organization to double its return on media investments.
The senior director of data insights at another CPG organization worked with Analytic Partners to expand their marketing measurement analysis to include promotions of their products across partner channels. The interviewee said: “We were backwards-looking with our previous marketing mixes. Analytic Partners’ scenario-planning tools help make us forward-looking. They tell us if some of our promotional material on an e-commerce channel is overheated, [so we can] knock down promotions and shift them into upper- funnel media.” By leveraging recommendations from Analytic Partners, the organization increased its market share by more than 1%.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- Of the $3.5 billion annual revenue generated by the organization, a portion is directly impacted by leveraging a solution with analysis of commercial business drivers. For the composite organization that amount totals $525 million.
- Based on intelligence and recommendations for marketing and commercial business decision-making from Analytic Partners, the organization realizes $42 million in additional revenue in Year 1. As the organization implements more recommendations across its business, the annual revenue driven by Analytic Partners reaches $105 million in Year 3.
- An attribution rate of 45% is applied to account for how people, process, and technology come together to drive new business. This assumption takes into consideration internal efforts taken based on Analytic Partners’ insights.
- An operating margin of 10% is applied to account for any additional organizational costs associated with the composite’s products.
Risks. Factors that could impact the size of this benefit for organizations include:
- The business size of the organization.
- The scale of opportunities to improve business.
Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $6.6 million.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Improvement In Contribution To Total Revenue
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| B1 | Annual revenue impacted from using commercial analytics | CompositeScaled for | $525,000,000 $525,000,000 | $525,000,000 $525,000,000 | $525,000,000 $525,000,000 | |
| B2 | Increase in contribution to revenue with Analytic Partners (based on more informed marketing driving business and smarter commercial business decisions; excludes ad spending efficiency) | CompositeTEI case study | 8.0%8.0% | 15.0%15.0% | 20.0%20.0% | |
| B3 | Subtotal: Additional revenue since working with Analytic Partners | B1*B2 | $42,000,000 $42,000,000 | $78,750,000 $78,750,000 | $105,000,000 $105,000,000 | |
| B4 | Attribution | CompositeTEI case study | 45%45% | 45%45% | 45%45% | |
| B5 | Operating margin | TEI StandardTEI Standard | 10%10% | 10%10% | 10%10% | |
| Bt | Improvement in contribution to total revenue | B3*B4*B5 | $1,890,000 $1,890,000 | $3,543,750 $3,543,750 | $4,725,000 $4,725,000 | |
| Risk adjustment | ↓20% | |||||
| Btr | Improvement in contribution to total revenue (risk-adjusted) | $1,512,000 $1,512,000 | $2,835,000 $2,835,000 | $3,780,000 $3,780,000 | ||
| Three-year total: $8,127,000 $8,127,000 | Three-year present value: $6,557,491 $6,557,491 | |||||
Improved Marketing Spending Efficiency
Evidence and data. Analytic Partners provided interviewees with greater specificity about marketing performance while delivering the intelligence on a monthly basis. Interviewees became smarter about adjusting spending in response to performance and to ensure that their budget went toward ads that reached and engaged customers.
The global marketing and media executive at a hospitality organization said: “Analytic Partners is giving us great intelligence, especially as we evolve our marketing approach. [They are] helping us understand how to spend smarter and areas we can lean into to help us double our ROI over time.” Analytic Partners’ recommendations for the organization ranged from the tactical to their creative. Early on, the marketing team received granular insights around the appropriate amount of spend to funnel toward linear TV without oversaturating the market. The organization received recommendations on how to best reallocate those ad dollars from a high-cost channel like TV to more efficient channels, maximizing impact in the market.
Interviewees appreciated the rigor with which Analytic Partners provided specific recommendations. The VP of the customer team at the retailer spoke to the specificity of recommendations to run 15-second vs. 30-second spots across streaming video platforms, or where to reinvest from printed circular ads into digital channels. Based on their scale of ad investments, it tallied tens of millions of spending efficiencies for the company.
The senior director of data insights at a CPG company spoke to Analytic Partners’ support creating a sweeping shift in how their marketing team approaches advertising. The interviewee said: “Culturally, they’ve helped us create an environment where internally we think about how there’s money that can be optimized in a data-driven fashion, and that has to be prioritized. We’ve definitely seen an impact from GPS Enterprise. We’ve run tests to help understand how we’re performing based on their recommendations, and it’s a huge extension of our media dollar efficiency.” Their organization was able to achieve the same results it would have realized if it had spent 35% more than the media budget it had allotted for 2023.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The organization’s marketing budget totals $175 million when excluding expenses like headcount and technology. Marketing budget that can be optimized, which consists of materials that don’t reach or engage customers, represents a portion of marketing spend. For the composite organization this totals $175 million.
- The organization recovers ad spending to reallocate as it receives more intelligence from Analytic Partners on how to be more efficient with its spending and stretch each dollar further. As the organization implements these changes and continues to build insights into their performance, the savings increase from 4% in Year 1 to 8% in Year 3.
Risks. Factors that could impact the size of this benefit for organizations include:
- The annual marketing budget of the organization.
- The amount of marketing spending that can be optimized.
Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $6.1 million.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Improved Marketing Spending Efficiency
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| C1 | Annual marketing budget that is wasted and optimizable | CompositeScaled for | $52,500,000 $52,500,000 | $52,500,000 $52,500,000 | $52,500,000 $52,500,000 | |
| C2 | Improvement in marketing spending efficiency with Analytic Partners | Interviews | 4%4% | 6%6% | 8%8% | |
| Ct | Improved marketing spending efficiency | C1*C2 | $2,100,000 $2,100,000 | $3,150,000 $3,150,000 | $4,200,000 $4,200,000 | |
| Risk adjustment | ↓20% | |||||
| Ctr | Improved marketing spending efficiency (risk-adjusted) | $1,680,000 $1,680,000 | $2,520,000 $2,520,000 | $3,360,000 $3,360,000 | ||
| Three-year total: $7,560,000 $7,560,000 | Three-year present value: $6,134,335 $6,134,335 | |||||
Unquantified Benefits
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
- Greater understanding of marketing insights. The breadth of insights Analytic Partners shared with interviewees expanded their understanding of influential factors on media performance. Rather than thinking about where to place media budget based purely on performance, marketers were able to review the data provided and recommendations to understand how they should allocate spending. The VP of marketing at a hospitality organization said: “Analytic Partners played a critical role around helping with the change management piece. They’re really good at taking the time to help us better understand the data and how to read it. That’s helped us to better educate our executives that certain choices would be more valuable to the organization.”
- Valuable customer service. Interviewees spoke highly of Analytic Partners’ responsiveness and support. The director of integrated media at the retail organization said: “They feel like an extension of our team. They come across as fully invested in our business and wanting to drive it forward. We have found them to be spectacular partners.” The senior director of data insights at a CPG company highlighted Analytic Partners’ ability to listen to clients: “They are open to suggestions from us on strategy, but they come back with points of view on the challenges we would face based on that strategy. That’s influential for us because we see their role as making us better in our decision-making.”
Flexibility
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Analytic Partners’ services and later realize additional uses and business opportunities, including:
-
Newly surfaced business opportunities driving
long-term benefits. Analytic Partners’ broader level
of analysis than paid media performance, including ongoing economic changes
or consumer behavior, led to interviewees uncovering new business
opportunities to capitalize upon. These insights helped the $100 billion CPG
organization identify potential issues in its production operations, which
led it to create additional manufacturing facilities to increase product
supply.
In another case, the senior analytics director at the <$5 billion CPG organization gained benefits from pricing insights that illuminated which categories over- or underperformed based on the cost of the company’s products. Analytic Partners showed the market factors influencing the impact of pricing on sales, helping decision-makers understand how to optimize pricing. These changes helped beyond improvements to media spending to justify the organization’s investment in Analytic Partners.
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).
Quantified cost data as applied to the composite
The following table shows custom results for .
Total Costs
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Dtr | Analytic Partners service costs | $0 $0 | $787,500 $787,500 | $787,500 $787,500 | $787,500 $787,500 | $2,362,500 $2,362,500 | $1,958,396 $1,958,396 |
| Etr | Implementation and training costs | $42,840 $42,840 | $252 $252 | $252 $252 | $252 $252 | $43,596 $43,596 | $43,467 $43,467 |
| Ftr | Ongoing management costs | $0 $0 | $137,500 $137,500 | $137,500 $137,500 | $137,500 $137,500 | $412,500 $412,500 | $341,942 $341,942 |
| Total costs (risk-adjusted) | $42,840 $42,840 | $925,252 $925,252 | $925,252 $925,252 | $925,252 $925,252 | $2,818,596 $2,818,596 | $2,343,805 $2,343,805 | |
Analytic Partners Service Costs
Evidence and data. Annual service costs for Analytic Partners varied across the interviewees’ organizations based on the amount of analysis that was needed, including the number of data models created and frequency of engagement with the Analytic Partners team.
Modeling and assumptions. Assumed costs for the composite organization reflect the amount of work carried out to achieve the benefits shown; this averages to $750,000 per year.
Risks. The scope of analysis carried out with Analytic Partners could impact the size of this cost for organizations.
Results. To account for these risks, Forrester adjusted this cost upward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $2.0 million.
For , these costs may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Analytic Partners Service Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| D1 | Annual costs with Analytic Partners | CompositeScaled for | $750,000 $750,000 | $750,000 $750,000 | $750,000 $750,000 | ||
| Dt | Analytic Partners service costs | D1 | $0 $0 | $750,000 $750,000 | $750,000 $750,000 | $750,000 $750,000 | |
| Risk adjustment | ↑5% | ||||||
| Dtr | Analytic Partners service costs (risk-adjusted) | $0 $0 | $787,500 $787,500 | $787,500 $787,500 | $787,500 $787,500 | ||
| Three-year total: $2,362,500 $2,362,500 | Three-year present value: $1,958,396 $1,958,396 | ||||||
Implementation And Training Costs
Evidence and data. Interviewees spent some time upfront to share their data inputs with Analytic Partners, reviewing and checking to make sure data was flowing accurately. This process ranged from weeks to a few months, depending on the amount of their organizations’ data the interviewees shared for analysis. Interviewees noted that they were supported by Analytic Partners throughout this preliminary process.
A small amount of time was spent on training for employees reviewing Analytic Partners’ readouts of data and its analytics platform, GPS Enterprise.
Modeling and assumptions. For the composite organization, Forrester assumes the following:
- Two employees engage in sharing their organization’s data inputs with Analytic Partners, spending 15 hours per week on the work over the course of 16 weeks.
- The fully loaded hourly rate for employees supporting these efforts is $80.
- Initially, 20 employees at the organization engage with the Analytic Partners team and GPS Enterprise analytics platform, and all of them participate in training. Each year thereafter, two new users replace team members leaving the composite organization and also participate in training. Each user spends 2 hours on training.
- The average fully loaded hourly rate for employees using Analytic Partners, who can range in experience levels, is $60.
Risks. Factors that could impact the size of costs for an organization:
- The amount of data analyzed with Analytic Partners and size of the team connecting data inputs.
- The number of users of the solution at the organization.
- Compensation of employees at the organization.
Results. To account for these risks, Forrester adjusted this cost upward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $43,000.
For , these costs may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Implementation And Training Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| E1 | Employees involved with implementation | CompositeScaled for | 22 | |||
| E2 | Length of implementation (weeks) | Interviews | 1616 | |||
| E3 | Hours per week per employee spent on implementation | Interviews | 1515 | |||
| E4 | Average fully loaded hourly rate per employee implementing Analytic Partners | TEI standard | $80 $80 | |||
| E5 | Subtotal: Implementation costs | E1*E2*E3*E4 | $38,400 $38,400 | |||
| E6 | New Analytic Partners users | CompositeScaled for | 2020 | 22 | 22 | 22 |
| E7 | Hours spent in training | Interviews | 22 | 22 | 22 | 22 |
| E8 | Average fully loaded hourly rate for employees using Analytic Partners | CompositeTEI case study | $60 $60 | $60 $60 | $60 $60 | $60 $60 |
| E9 | Subtotal: Training costs | E6*E7*E8 | $2,400 $2,400 | $240 $240 | $240 $240 | $240 $240 |
| Et | Implementation and training costs | E5+E9 | $40,800 $40,800 | $240 $240 | $240 $240 | $240 $240 |
| Risk adjustment | ↑5% | |||||
| Etr | Implementation and training costs (risk-adjusted) | $42,840 $42,840 | $252 $252 | $252 $252 | $252 $252 | |
| Three-year total: $43,596 $43,596 | Three-year present value: $43,467 $43,467 | |||||
Ongoing Management Costs
Evidence and data. Interviewees’ organizations added or rededicated employees to review insights from Analytic Partners and implement those recommendations. These employees worked directly with teams to disseminate information and ensure changes were correctly deployed.
Modeling and assumptions. For the composite organization, Forrester assumes the following:
- The full-time equivalent of two employees support managing and implementing insights. (The number of employees overseeing management can vary, but it totals the equivalent of two employees.)
- The fully loaded salary of employees working with Analytic Partners is $125,000.
- Employees supporting management spend half of their week (20 hours) on this work.
Risks. Factors that could impact the size of costs for an organization:
- The scale of analysis carried out with Analytic Partners and amount of help needed to oversee it.
- Compensation of employees overseeing management.
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $342,000.
For , these costs may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ongoing Management Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| F1 | Full-time equivalent of employees dedicated to managing and implementing insights | CompositeScaled for | 22 | 22 | 22 | ||
| F2 | Fully loaded salary of employees working with Analytic Partners | CompositeTEI case study | $125,000 $125,000 | $125,000 $125,000 | $125,000 $125,000 | ||
| F3 | Percentage of time spent reviewing and implementing insights | Interviews | 50%50% | 50%50% | 50%50% | ||
| Ft | Ongoing management costs | F1*F2*F3 | $0 $0 | $125,000 $125,000 | $125,000 $125,000 | $125,000 $125,000 | |
| Risk adjustment | ↑10% | ||||||
| Ftr | Ongoing management costs (risk-adjusted) | $0 $0 | $137,500 $137,500 | $137,500 $137,500 | $137,500 $137,500 | ||
| Three-year total: $412,500 $412,500 | Three-year present value: $341,942 $341,942 | ||||||
Consolidated Three-Year Risk-Adjusted Metrics
Cash Flow Chart (Risk-Adjusted)
Total costs Total benefits Cumulative net benefits-
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
The following table shows custom results for .
Cash Flow Analysis (Risk-Adjusted Estimates)
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($42,840)($42,840) | ($925,252)($925,252) | ($925,252)($925,252) | ($925,252)($925,252) | ($2,818,596)($2,818,596) | ($2,343,805)($2,343,805) |
| Total benefits | $0 $0 | $3,192,000 $3,192,000 | $5,355,000 $5,355,000 | $8,820,000 $8,820,000 | $17,367,000 $17,367,000 | $13,954,035 $13,954,035 |
| Net benefits | ($42,840)($42,840) | $2,266,748 $2,266,748 | $4,429,748 $4,429,748 | $7,894,748 $7,894,748 | $14,548,404 $14,548,404 | $11,610,230 $11,610,230 |
| ROI | 495%495% | |||||
| Payback | <6 months <6 months | |||||
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
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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.
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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.
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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.
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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.”
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.
Appendix B: Supplemental Material
Related Forrester Research
The Marketing Analytics Landscape, Q2, 2024, Forrester Research, Inc., April 3, 2024.
Elevate Marketing’s Impact With A Layered Measurement Strategy, Forrester Research, Inc., March 5, 2024.
Role Profile: Performance Marketer, Forrester Research, Inc., February 20, 2024.
Appendix C: Endnotes
1 Source: Forrester’s State Of Data, Analytics, Measurement, And Insights Survey, 2024.
2 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.
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