Part 2: ROI of TRUSTe Privacy Solutions – Total Economic Impact (TEI) Report

TRUSTe Webinar Series: Making the Most of your Data Privacy Management Investment

Part II - Total Economic Impact™ Report: The ROI of TRUSTe Privacy Solutions

Dave Deasy, VP of Marketing, TRUSTeNorman Forbush, Principal Consultant, Forrester

Dave DeasyVice President of Marketing, TRUSTe

Norman ForbushPrincipal Consultant, Forrester Research

Welcome and Introductions

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•Webinar Series Overview

•Privacy investment / budget challenges

•Total Economic Impact (TEI) Study Overview

•TEI Study Details - benefits, costs, risks

•ROI Estimator Overview

•Open Q&A

Agenda

Part 1: The New Privacy– It’s All About Context – 5/14

Part 2: Total Economic ImpactTM Report: The ROI of TRUSTe’s Privacy Solutions – 6/12

Part 3: Privacy Investment Success Stories – 7/24

Webinar Series Overview

TRUSTe Overview

TRUSTe enables businesses to safely collect and use customer data to power all their online channels.

15+years ofglobal

privacy expertise

5,000+clients worldwide

acrossall industries

140+team focused on

data privacy management

#1 Privacy BrandTechnology & Services

Data Is Critical To Your Business Success

Data Powers All Your Customer Channels

Technology• Third-Party Trackers• Opt-out Management• Behavioral

Advertising• DAA / EDAA Icon

Serving• Geolocation Info• Device Recognition

Technology

Customer• Consumer Trust

Questions

• Acquisition / Retention

• RFP Requirements

• Competitive Alternatives

Regulatory• APEC• BCRs• COPPA• DAA / EDAA• EU Safe Harbor• EU Data Protection

Directive• FTC / ICO Mobile

Guidelines

Data Also Creates Significant Privacy Challenges

Data Privacy Management Strategy

Address Global / Enterprise / Cross-Channel Needs

Compliance Controls

Privacy Assessments

Ongoing Monitoring

Assess, Operationalize, and Manage Privacy Across the Enterprise

Platform Certifications

• Validate practices vs. TRUSTe Privacy Program Requirements

• Web, Mobile, Cloud, Data Collector• APEC, COPPA, Safe Harbor, EDAA• Privacy Seals & Certification Letters

• Data collection & usage audit• Web and app tracker analysis• Global compliance gap analysis• Privacy Findings Report• Privacy Analysts + Technology Tools

• DAA / EDAA icon serving• Preference & opt-out management

for OBA and Cookies• Ad Network integration• Compliance reporting

• Regular tracker scanning and analysis for websites, apps, and ads

• Privacy risk scores & benchmarking• Analysis, reports, and alerts• Dispute resolution service

• New privacy regulations driving complexity & resource requirements

• Website Privacy Statement not enough – Address all channels, geographies, new products / vendors, etc.

Why We Launched the Privacy ROI Project

• Privacy Assessment not enough – Operationalize and Manage privacy programs to ensure ongoing compliance

• Budgets requirements growing – 2013 IAPP study: 60% of companies non-personnel privacy budget > $75K+, 35% > $250K

• ROI popular topic of discussion at privacy conferences• ROI popular question from our clients• Build a framework for businesses to evaluate privacy ROI• Partnered with Forrester to build a model

• Leverage privacy practice expertise • TEI framework experience

The Total Economic Impact™ of TRUSTe Data Privacy PlatformForrester ConsultingNorman Forbush – Principal Consultant

June 2014

12© 2014 Forrester Research, Inc. Reproduction Prohibited

TEI Study Findings

TEI Framework and Components


Total Economic

ImpactRISK

Benefits(Impact on Business)

Costs(Impact on Budget)

Flexibility(Options)

Perform due diligence

Conduct customer interviews

Construct financial model

Develop case study / ROI Tool

Conduct webinar

The TEI framework centers on quantifying benefits, capturing costs, evaluating flexibility, and adjusting risk

TEI Approach and Methodology

Interview highlights

© 2014 Forrester Research, Inc. Reproduction Prohibited 14

Background• Four customer interviews

• Global technology company (Chief Privacy Officer and Assistant General Counsel)• Global telecommunications company (Director of Privacy and Compliance)• Global video game/app development company (Global Privacy Officer)• Global consumer packaged goods company (Associate Director of Global Digital Enablement)

• Fifteen customers surveyed• All customers have multiple years of experience using TRUSTe

Situation• Prior to using TRUSTe, these organizations relied on in-house lawyers and external law

firms for industry best practices, guidance, and legal advice• As these organizations expanded, they needed a more comprehensive data privacy

management program to manage:› Regulations across different geographies› Customer data across multiple channels› Compliance across marketing programs› Transparency and accountability around the collection and use of customers’ personal

information• It became too labor intensive and cost prohibitive to continue working with internal and

external parties to manage their data privacy challenges

The composite organization


Source: The Total Economic Impact of TRUSTe, a commissioned study conducted by Forrester Consulting on behalf of TRUSTe, June 2014

Based on 4 interviews and 15 in-depth survey responses, Forrester constructed an ROI analysis that illustrates the areas these organizations identified as having the greatest financial impact and consolidated them into a single composite organization model of costs and benefits.

The composite organization:• Is a public company with global operations• Develops and markets both B2B and B2C products and services• Has approximately 100 websites (including mobile & apps)• Has $5 billion in annual sales and 10,000 employees worldwide• Utilizes both internal and external legal services to assist in complying to global data

privacy laws

The composite organization implemented the entire suite of TRUSTe products, including privacy assessments and certifications, monitoring tools, and compliance controls.

TRUSTe reduces an organization’s brand and compliance risk and increases operational efficiencies

• Forrester was commissioned by TRUSTe to examine the financial benefit of the TRUSTe Data Privacy Management Platform

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Executive Summary

Three-Year Risk-Adjusted Financial Snapshot

© 2014 Forrester Research, Inc. Reproduction Prohibited


• TRUSTe helps organizations build and implement a privacy program that enables their business to quickly and safely adhere to privacy laws and regulations while minimizing their legal and brand risk

• Based on our analysis of customer feedback, Forrester has determined that deploying the TRUSTe platform has a three-year risk-adjusted ROI of 151% and NPV of $375,000.

Customers chose TRUSTe because the platform addresses top concerns



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Reduction of labor costs

Staying consistent with competition

Flexible service & support

Comprehensive privacy solution

Global presence

Brand protection

Privacy expertise

Building user trust

Trusted/strong brand in industry

Not at all important Somewhat important Neither important nor unimportantVery important Extremely important

Please rate how important each of the following was when deciding to use TRUSTe for your data privacy management solutions.

Costs include privacy assessment/certification, monitoring tools, and compliance controls

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Privacy Assessment/Certification Services• Comprehensive audit of the organization’s data collection and usage practices• Review of privacy practices• Assessment of risk, a summary of findings, and required or recommended changes• The right to display the TRUSTe Certified Privacy Seal upon adherence to the

changes recommended by TRUSTe

Privacy Monitoring Tools• Analysis and ongoing insight into the use of first- and third-party web trackers• Assessment of associated privacy risk, performance impact, and data leakage risk• Third-party privacy dispute resolution management

Privacy Compliance Controls• Real-time user notification and preference management to ensure behavioral

advertising practices and cookie usage are in line with US and EU requirements

Total Annual Cost: $100,000*



*Actual costs dependent on client implementation - number of sites / apps, geographies, etc - contact TRUSTe for details

The three-year risk-adjusted cash flow for the TRUSTe platform shows a ROI of 151%, a NPV of over $375,000

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Three-Year Risk-Adjusted Cash FlowInitial Year 1 Year 2 Year 3 Total PV

Costs ($0) ($100,000) ($100,000) ($100,000) ($300,000) ($248,685)

Benefits $0 $251,149 $251,149 $251,149 $753,447 $624,571

Net Benefits ($0) $151,149 $151,149 $151,149 $453,447 $375,886

ROI 151%



Results- I. Productivity & Output

Incremental productivity & output Increased by 1,500 working hrs/year

© 2014 Forrester Research, Inc. Reproduction Prohibited20


TRUSTe

Data Privacy Management Platform gives the ability to crawl websites and report to companies their compliance

status

Without TRUSTe

Internal employees would have to manually go through each of the company’s websites & ads

to ensure compliance

Results- II. Legal Costs

Legal costs were reduced by 300 hrs/yr



TRUSTe

Provides insights on industry trends, privacy updates,

guidelines and advice on global privacy policies & regulations

Without TRUSTe

A company would have to hire additional legal resources to

monitor and provide updates on privacy policies

Results- III. Data Privacy Costs

The cost of data privacy breach was reduced by 25%



TRUSTe

Provides added assurance in compliance of privacy policy, protects company’s brand &

reputation

Without TRUSTe

Company’s are more exposed to data breaches

TRUSTe impact: Chances of having privacy

breach reduced by 25%

TRUSTe impact: Increased productivity in

privacy dept. by ensuring all sites compliantAverage time savings of 5

hours per site per year

TRUSTe platform benefits



Increase in output per worker

Three-year benefits:Annual: $150,000 Total (PV): $335,725

Avoidance of legal costs

TRUSTe impact: Average time savings of

300 hours of external and internal legal time per year

Three-year benefits:Annual: $60,000Total (PV): $141,751

Reduction in brand/compliance risk

Three-year benefits: Annual: $65,721Total (PV): $147,095

There is definitely less manual work related to managing compliance across multiple websites by using TRUSTe’s monitoring tools. – Chief privacy officer

TRUSTe gives added assurance to our customers that the privacy of their personal information has been independently verified... In addition, our company’s brand reputation is protected against mishandling our customers’ personal data. – Associate director of global digital enablement, consumer products company

TRUSTe saves us a lot of time because of their guidance and the processes they bring. Otherwise we would have to rely more heavily on our internal legal department. – Director of privacy and compliance, telecommunications provider

Disclosures

The audience should be aware of the following:• This document is an abridged webinar version of a full case study (Forrester Total Economic Impact of TRUSTe, June 2014).

• The study is commissioned by TRUSTe and delivered by the Forrester Consulting group.

• Forrester makes no assumptions as to the potential return on investment that other organizations will receive. Forrester strongly advises that readers should use their own estimates within the framework provided in the report to determine the appropriateness of an investment in TRUSTe.

• TRUSTe 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.

• The customer names for the interviews were provided by TRUSTe.

• Forrester does not endorse TRUSTe.




TRUSTe ROI Estimator

TRUSTe ROI Estimator: Overview

© 2014 Forrester Research, Inc. Reproduction Prohibited 26Source: TRUSTe ROI Estimator, a commissioned tool conducted by Forrester Consulting on behalf of TRUSTe

TRUSTe ROI Estimator: Inputs


Source: TRUSTe ROI Estimator, a commissioned tool conducted by Forrester Consulting on behalf of TRUSTe

TRUSTe ROI Estimator: Benefit and cost details



TRUSTe ROI Estimator: Summary results



Quantifying TEI for the TRUSTe platform

Key takeaways:

• All companies should assess their own risk profile

• TRUSTe customers are tracking metrics and seeing positive impact

• Contact TRUSTe Rep to estimate the financial implications of your current privacy investment:

– Determine a high-level estimate of the economic impact based on your specific business environment

– Begin value-based internal discussions on what have often been cost-focused budget decisions

– Create financial model to begin Privacy discussion with internal stakeholders


Summary

Privacy Landscape More Data…

More Complexity…

More Resources…

More Tools…

? More Budget

Forrester TEI Study Framework to Estimate

ROI for Privacy• Lower brand /

compliance risk• Lower legal team costs• Higher team productivity

Customize to your situation

Powering Trust For Over 5,000 companies

Thank You

Questions??

Resources Download TEI report at www.truste.com Contact TRUSTe to discuss the return on your

Privacy Investment 888-878-7830 or [email protected]

Mark you calendar for the 3rd and final webinar of the series Topic: Privacy Investment Success Stories Date: July 24th at 10am PDT Speakers: Chris Babel, CEO @TRUSTe &

Fatemeh Khatibloo, Analyst @Forrester