forrester-urban airship tei study 09142015

A Forrester Total Economic

Impact™ Study

Commissioned By

Urban Airship

Project Director:

Liz Witherspoon

September 2015

The Total Economic

Impact™ Of Urban

Airship’s Mobile

Engagement Platform Cost Savings And Business Benefits Enabled By Urban Airship

Table Of Contents

Executive Summary .................................................................................... 3

Disclosures .................................................................................................. 5

TEI Framework And Methodology ............................................................ 6

Analysis ........................................................................................................ 7

Financial Summary ................................................................................... 22

Urban Airship Mobile Engagement Platform: Overview ...................... 23

Appendix A: Composite Organization Description .............................. 25

Appendix B: Total Economic Impact™ Overview ................................. 27

Appendix C: Forrester And The Age Of The Customer ....................... 28

Appendix D: Glossary ............................................................................... 29

Appendix E: Supplemental Material ....................................................... 30

Appendix F: Endnotes .............................................................................. 30

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3

Executive Summary

Urban Airship commissioned Forrester Consulting to conduct

a Total Economic Impact™ (TEI) study and examine the

potential return on investment (ROI) enterprises may realize

by deploying its Mobile Engagement Platform. The purpose of

this study is to provide readers with a framework to evaluate

the potential financial impact of Urban Airship’s Mobile

Engagement Platform on their organization to drive customer

communications, personalize content, and increase customer

engagement, loyalty, and spend while decreasing marketing

costs.

To better understand the benefits, costs, and risks associated

with an Urban Airship platform implementation, Forrester

interviewed several customers with multiple years of

experience using the solution. The Mobile Engagement

Platform includes complete APIs and out-of-the-box

capabilities to enable marketers to drive mobile engagement

without IT intervention, including push notifications, interactive

notifications, in-app messages, and rich landing page creation

with cross-channel audience targeting, marketing automation,

and analytics. From the platform, marketers can deliver

compelling, targeted content that increases app engagement, drives revenue, and boosts customer loyalty. In-app message

centers and digital wallets, as well as cross-channel data integration capabilities, can also be implemented with some IT

assistance.

Prior to using Urban Airship’s platform, marketers did not have access to an off-the-shelf solution for push notifications, in-

app messaging, and digital wallet, which are key components of their mobile strategy. One customer had built a push

platform in-house for order fulfillment but found that its significant use of engineering resources and lack of complexity would

not support ongoing marketing campaigns. Furthermore, staying current with mobile O/S changes and tuning a push

platform for ongoing integrations was not a cost-effective, long-term solution. With Urban Airship’s Mobile Engagement

Platform, customers were able to immediately increase app engagement, revenue, and advertising returns through the

mobile channel and drive customer loyalty without a complex technical integration. Marketers could interact with app users

regularly to provide personalized content and offers without having to rely on costly and busy internal developer resources.

Furthermore, they were able to extend the life cycle of an app without making an update because they could personalize

content and offers without fundamentally changing the app. Said one director of international mobile product management:

“This is like a communication platform: It's how we can reach customers in the most personal and contextual way. Much

more so than, say, email.” Said another head of mobile product for a media company: “Customers expect us to have a

modern mobile touchpoint. Our apps are meant for our super fan loyalist audience, and we really want our brand fans to love

them. There’s really no better environment to get people to love what you do for them than in an app.”

URBAN AIRSHIP GENERATES NEW MCOMMERCE AND INFLUENCES SALES

Our interviews with four existing customers and subsequent financial analysis found that a composite organization based on

these interviewed companies experienced the risk-adjusted ROI and benefits shown in Figure 1.1.See Appendix A for a

description of the composite organization.

The composite organization analysis points to three-year present value benefits of over $3.1 million versus platform fees and

implementation present value costs of $323,291, adding up to a net present value (NPV) of $2,837,444.

Urban Airship’s Mobile Engagement Platform can

increase mCommerce revenue and drive average

spend per customer while lowering email

marketing and app update costs.

The platform yielded an 878% ROI for the

composite organization, driven by the following

benefits:

A 10% to 70% increase in one-day

mCommerce sales from a product

promoted through a push notification.

A 15 to 30% increase in average spend per

customer.

A 20% increase in lifetime value of a

customer due to mobile influence on

purchase behavior.

An increase in app engagement and traffic

and sales driven to other channels.

4

With Urban Airship’s platform, sales of a product through the mobile channel increased by 30%, and the composite

organization experienced additional revenue generation through increased spend per customer. Furthermore, it saved

mobile development and email marketing costs.

FIGURE 1

Financial Summary Showing Three-Year Risk-Adjusted Results

ROI: 878%

Percent product sales lift with one notification: 10% to 70%

Payback: two months

Increase in spend per customer: 15% to 30%

Source: Forrester Research, Inc.

5

› Benefits. The composite organization experienced the following risk-adjusted benefits that represent those experienced by

the interviewed companies:

• A 30% increase in product sales through the mobile channel due to mobile promotions. The average

increase in mobile sales for a product promoted through push notifications was 30% within 24 hours of the marketer

hitting “send.” Customers were compelled to make their product purchases directly through the mobile device after

receiving a push notification, not through a website or other channel.

• A 20% increase in lifetime value of a customer due to mobile influence on purchase behavior. Customers

who opt in to push notifications spend, on average, 20% more than the typical customer within this composite

organization. Push communications and in-app messaging influence their online or in-store purchase, and they

spend more because push is personal, engaging, and increases loyalty.

• Savings of $231,660 in email marketing spend because push notifications and in-app messaging were used

as an alternative. The composite organization was able to save over $70,000 per year on email budget because it

could communicate more immediately and personally through push notifications and in-app messaging. The

average opt-in rate to email is 2%, compared with push notification’s cross-industry average of 43%.2

• Costs of $40,000 avoided by reducing the number of app updates required annually. Apps that previously had

to be updated to offer personalized content and features no longer needed updating because the marketing

organization could bypass the development team and customize user experiences through Urban Airship’s support

for rich content creation (landing pages, message centers, and digital wallets), its Actions Framework, and marketing

automation.

› Costs. The composite organization experienced the following risk-adjusted costs:

• Mobile engagement platform fees of $110,000. These are annual recurring fees paid to Urban Airship for access

to the platform, based on the app’s active audience size. They include fees for cross-platform push notifications, in-

app messaging, the message center, audience segmentation, location targeting, mobile analytics, and digital wallet.

• Implementation services fee of $20,000. This is an annual, recurring fee that is tailored to the business’ needs and

can include strategy consulting, technical implementation services, and escalated service-level agreements (SLAs)

for technical support. The platinum technical support includes year-round support, 24 hours and seven days a week,

including after business hours with its most responsive SLAs.

Disclosures

The reader should be aware of the following:

› The study is commissioned by Urban Airship 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 report to determine the appropriateness of an

investment in Urban Airship’s Mobile Engagement Platform.

› Urban Airship 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.

› Urban Airship provided the customer names for the interviews but did not participate in the interviews.

6

TEI Framework And Methodology

INTRODUCTION

From the information provided in the interviews, Forrester has constructed a Total Economic Impact (TEI) framework for

those organizations considering implementing Urban Airship’s Mobile Engagement Platform. The objective of the framework

is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision, to help organizations understand

how to take advantage of specific benefits, reduce costs, and improve the overall business goals of winning, serving, and

retaining customers.

APPROACH AND METHODOLOGY

Forrester took a multistep approach to evaluate the impact that Urban Airship’s Mobile Engagement Platform can have on an

organization (see Figure 2). Specifically, we:

› Interviewed Urban Airship marketing, sales, and/or consulting personnel, along with Forrester analysts, to gather data

relative to its Mobile Engagement Platform and the marketplace for mobile app engagement.

› Interviewed four organizations currently using Urban Airship’s Mobile Engagement Platform to obtain data with respect to

costs, benefits, and risks.

› Designed a composite organization based on characteristics of the interviewed organizations (see Appendix A).

› Constructed a financial model representative of the interviews using the TEI methodology. The financial model is

populated with the cost and benefit data obtained from the interviews as applied to the composite organization.

› Risk-adjusted the financial model based on issues and concerns the interviewed organizations highlighted in interviews.

Risk adjustment is a key part of the TEI methodology. While interviewed organizations provided cost and benefit

estimates, some categories included a broad range of responses or had a number of outside forces that might have

affected the results. For that reason, some cost and benefit totals have been risk-adjusted and are detailed in each

relevant section.

Forrester employed four fundamental elements of TEI in modeling Urban Airship’s Mobile Engagement Platform’s benefits,

costs, flexibility, and risks.

Given the increasing sophistication that enterprises have regarding ROI analyses related to IT investments, Forrester’s TEI

methodology serves to provide a complete picture of the total economic impact of purchase decisions. Please see Appendix

B for additional information on the TEI methodology.

FIGURE 2

TEI Approach


Perform due diligence

Conduct customer interviews

Design composite

organization

Construct financial

model using TEI framework

Write case study

7

Analysis

COMPOSITE ORGANIZATION

For this study, Forrester conducted a total of four interviews with representatives from the following companies, which are

Urban Airship customers based in the US:

› A retail organization with $1.89 billion in revenue, specializing in DVD, Blu-ray, and video game rentals via automated retail

kiosks. The organization has around 6 million monthly app users and sends one to three push messages per month. It

uses Urban Airship’s platform and message center to enable

customers to sign up for loyalty programs, provide promotion

codes, make personalized product recommendations, and

facilitate communications and customer service.

› An American retail company with several billion dollars in

revenue and multiple global brands underneath its umbrella. One

of its key brand apps offers one push notification per week,

focused on a particular product or general info/rich content. In

general, it uses Urban Airship for product and sales promotions,

marketing and communications, geolocation-based alerts for in-

store events, and in-app messaging with links to YouTube

cooking videos to grow the basket size for its grocery store chain.

› A news app operated by a large television organization with

235,000 unique app visitors in one month. It uses Urban Airship

to deliver “alert” content to followers and create geo-based push

notifications.

› One of the top broadcast media organizations based in the

United States. One third of its app opens come from push

notifications, and app traffic has more than doubled since using

Urban Airship. This is due, in part, to the message center, which

enables users to star stories they want to follow and receive

updates on those news pieces. Its primary uses for Urban Airship

include sending out relevant content and breaking news alerts to

mobile users, geolocation and an in-app message center, alerts

linking to live video, and live streams for quarterly planned events

and monthly unplanned events.

Based on the interviews, Forrester constructed a TEI framework, a composite company, and an associated ROI analysis that

illustrates the areas financially affected. The composite organization that Forrester synthesized from these results represents

an organization with the following characteristics

› It is a US-based retail organization.

› It has $3 billion in annual revenue.

› It has a significant and growing population of app users, measured by downloads and monthly usage/activity.

› It has a significant and growing portion (43%) of users who have opted to receive push notifications.

“We’ve been using push to

grow the average cart size of

our customers — it is very

important to us. It drives

profitability. It is a tool that

enables us to recommend

specific products at the right

time and at the right place to

the right customers to get

them to grow their cart size.”

~ Director, international mobile product

management, global retailer

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› It has been using in-app messaging for six months and experiencing five times more in-app message opens from the

message center than from push notifications.

After evaluating the technology provider landscape for vendors that could provide a hosted mobile engagement platform, the

composite organization chose Urban Airship because it was uniquely qualified to offer those capabilities. It began

deployment:

› Implementation started in early 2014.

› The initial technical implementation was complete within hours, but the organization went through a four- to six-month

process to optimize its use of Urban Airship, including determining the frequency of messaging, throttling, and API

integration with the back-end systems.

› The platform required little training because it was very intuitive and easy-to-use — the organization estimates it spent half

an hour in training. The organization also credits the customer support offered by Urban Airship as a driver of fast

adoption.

› The organization planned and tested its initial push notification but found that response to the message increased

server/network traffic significantly. It determined that staging or throttling message delivery was required to handle the

resulting load on its infrastructure, which required some minor reconfiguring of Urban Airship’s implementation.

› It developed a predetermined frequency of push messages to avoid overwhelming or alienating the user (averaging two to

three per week). Furthermore, it enabled customers to determine what type of content they wanted to receive, which

increased their engagement further and mitigated the risk of the customer being turned off by too much content. The

composite organization adopted message center to reach all users — opted in or not — with rich content to consume at

their convenience.

› To link application users who opted in to receive push notifications or who viewed Message Center messages to the

company’s account and customer relationship management data, the organization encouraged app users to sign into an

account by providing incentives (e.g., special offers and coupons). This enabled the organization to map the user’s mobile

device to the customer in its database, linking together mobile data with everything else the organization knows about the

customer to enable customized cross-channel messaging.

› Six months after the implementation, the full use of Urban Airship could be transitioned to the marketing team from the

technical team to further refine the messaging pattern/regime and engagement strategy.

INTERVIEW HIGHLIGHTS

Once the organization determined that push notification and in-app messaging were the right approach for increasing the

engagement of its app users, it saw many opportunities to use Urban Airship’s capabilities to drive specific benefits.

Situation

The composite organization realized a unique opportunity to connect and communicate with its app users in a personalized

way. For its most loyal users, push messaging and in-app messaging provided another communication touchpoint to

increase their customer satisfaction. For new customers, a push notification would get immediate engagement, which is

critical for onboarding. Because app usage commonly tapers off after the initial download, the organization saw an

opportunity to provide immediate and relevant content and offers to app users shortly after their very first app open to

encourage habitual use. There was also an opportunity to expedite the integration of this capability using automatic life-cycle

lists, as well as the ability to update content by leveraging a platform that required little reliance on app developers to create

and launch rich landing pages and in-app messages. Furthermore, push notifications were becoming more impactful and

immediately relevant to customers than email, so the organization could reduce the number of emails sent. The composite

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organization recognized that mobile phones hold a unique position in customers’ lives, as they spend 1 hour and 53 minutes

per day looking at them.3 The growth in mobile influence on in-store sales and mCommerce were both significant trends they

wanted to take advantage of. Currently in the United States, users spend more time in smartphone apps than on desktop

computers.4 Furthermore, geolocation provides targeting and personalization options to deliver immediate offers that are

more likely to be relevant to customers. With Urban Airship, the composite organization wanted to:

› Promote specific products or special offers to increase sales.

› Improve the customer experience.

› Offer one-to-one communications, personalized content, and offers.

› Convert app users to known customers.

› Send transactional receipts through push notifications rather than email.

› Leverage mobile for cross-promotion, driving more engagement to social channels and SMS.

Solution

The composite organization selected Urban Airship’s solution for its broad set of capabilities to create rich, interactive app

messaging experiences for customers within an out-of-the box solution. Realizing that it didn’t have the infrastructure, time,

or resources to build these capabilities in-house, the composite organization looked to partner with a vendor and determined

that Urban Airship was uniquely positioned to serve it. Beyond delivering push notifications, Urban Airship’s platform

provided access to a full range of communication functionality, including interactive notifications, in-app messages, message

centers, wallets, and watch. Furthermore, the composite organization could rely on Urban Airship’s professional services

from account managers and technical and business strategists to set it on the right course for embarking on its first push

marketing effort.

Results

Interviews revealed that the composite organization experienced:

› Increased engagement and retention of its mobile app

users, both new and longstanding. The composite

organization saw an increase in app engagement and retention

after using Urban Airship. Message click-through rates and app

open rates increased significantly compared with the previous

months without Urban Airship. New customers engaged more

quickly, and loyal customers spent more money with the

company.

› An increase in sales, both directly through the mobile

channel and indirectly through influenced purchases. The

composite organization saw an immediate increase in sales

through its mobile app when it sent product offers through push

notifications. In fact, it had to throttle the messaging to avoid

generating too much server traffic at the same time. Product

sales lift through mobile could be anywhere from 10% to 70%

higher than a daily average after a push notification was sent.

Furthermore, the organization tracked the customer lifetime

value of those users who had opted in for push notifications and

“I think that what we’re able to

accomplish through Urban

Airship is light years ahead of

what we would be able to do if

we had to update an app every

time. They really help us to

find solutions and

workarounds without taxing

our resources too much.”

~ Senior manager, mobile marketing, retailer

10

those who hadn’t, and determined that, on average, opted-in users spent 20% more than those who did not opt in to push

notifications.

› Reduced or avoided costs because push notifications could accomplish what previously would have required

technical app updates or email campaigns. The composite organization described platform capabilities that enabled it

to avoid spending on email or updating its mobile app. As a result of the Mobile Engagement Platform implementation,

mobile marketers could bypass the typical app development process and queue. They were able to extend the life cycle of

the app while personalizing content and offers with little technical help. Furthermore, they quickly realized that notifications

and in-app messages were far more effective at delivering content than emails, so they could spend less on the email

marketing channel. One head of mobile product described the complex process of updating an app, compared with using

Urban Airship: “When you're shipping apps, you’ve got the development time and you have to go through the app store,

QA, and submission process. And then you have to get the users to download it and start using the features.”

› Increased speed to deliver location-based, targeted content. Two of the interviewed organizations making up the

composite organization are news media outlets. The speed with which breaking news can be delivered through Urban

Airship means more impressions and more advertising revenue opportunity for media companies. Furthermore, the in-app

message center that allows for personalized news feeds further increased engagement with news customers. Live

streaming of news events and geo-based alerts for breaking news garnered more streaming video views and increased

traffic to the website significantly for both customers.

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BENEFITS

The composite organization experienced a number of quantified benefits in this case study:

› Increased net-new annual profit due to product sales through the mobile channel (mCommerce).

› Increased spend per customer through mobile influence on purchase behavior (mCommerce, in-store, and website).

› Reduced spend for email marketing.

› Costs avoidance by extending the life of the app and reducing the number of app updates required annually.

Another important benefit mentioned by the composite organization was an increase in app engagement and retention,

leading to more traffic to other channels, including the website and in-store. While the impact of app engagement and

retention varies by the type of app and customer that it serves, it is a critical metric for marketers to watch as more and more

customers and prospects interact with their phones first to research purchases and get recommendations from others.

Furthermore, the message center was cited as a critical enabler for communicating in a personal way with all app users,

whether they opted in or not. Additional capabilities offered by in-app messages enable notification-type messages to appear

inside an app and reach all users on the latest mobile operating system versions. Said one head of mobile development:

“With features like in-app messages, you can reshape the user experience in the app. The level of customization and

creativity of the Urban Airship platform enables nontechnical users to create branded, engaging content.” For example, the

opt-in process can use rich in-app messages or landing pages to explain the value of these messages so that users will be

more likely to say “yes” to push. Also, customers mentioned the fact that push notifications can be seen above the lock

screen as another innovative way to engage app users — they don’t have to enter a password to see content. Media

customers of Urban Airship cited the speed of the notification and lack of lag time between breaking news and sending

notifications as a key benefit of the platform.

Increased Profit Due To Product Sales Through Mobile (mCommerce)

The composite organization indicated that a key benefit from the Mobile Engagement Platform implementation

was an increase in net-new product sales through the mobile channel (mCommerce). Prior to the Mobile

Engagement Platform, the composite organization expected to sell a certain number of units of a particular

product over the course of a day, week, or month. After using push notifications to promote an individual product,

the composite organization saw one-day product sales increase as much as 70%. In many cases, the promotion

notification in and of itself led to those sales, without a discount in price or special offer. More often it was the

timing, relevancy, and personalization of the offer that had the most impact on the increase in product sales.

Although this increase in profit can be expected to continue across three years of using the platform, the increase

in sales in years 2 and 3 are not counted in this benefit because it may overlap with the increase in spend per

customer in years 2 and 3 (captured in the next benefit: increased spend per customer). It is assumed, however,

that in years 2 and 3, about 10% of app users are newly opted-in and would not be captured within the “lifetime

value” benefit category. While these two benefits were separated within this study, an organization that chooses

to carefully track the customers who make both a one-time purchase and ongoing purchases will be able to

determine where these two benefits intersect or overlap. The total benefit resulting from increased profit due to

product sales over the three years was $2.34 million, or about $3.12 per app user who opted in for push

notifications.

Interviewed organizations represented a broad range of industries, including retail, grocery/food, and media.

Since it is difficult to determine the average price per product across all industries, the results of this benefit could

vary widely. Furthermore, the average number of units sold per day varies by product type, category, and price.

To compensate, this benefit was risk-adjusted and reduced by 20%. The risk-adjusted total benefit resulting from

12

increased profit due to product sales over the three years was $1,872,000, or about $2.50 per app user who

opted in for push notifications. See the section on Risks for more detail.

TABLE 1

Increased Net-New Annual Profit Due To Product Sales Through The Mobile Channel (mCommerce)

Ref. Metric Calculation Year 1 Year 2 Year 3

A1 Number of weekly sends per user per week

Source: Urban Airship from app engagement

tracking analytics. Average for all industries

is 3.

1 2 3

A2 Weeks per year

52 52 52

A3 Average price per product pushed

$20 $20 $20

A4 Average number of units sold

20,000 20,000 20,000

A5 Percent sales lift due to notification

30% 30% 30%

A6 Average product profit margin 25% 25% 25%

A7 Percentage of sales made by new customers versus existing

10% 10%

At Increased profit due to product sales through mobile (mCommerce)

A1*A2*A3*A4*A5*A6 $1,560,000 $312,000 $468,000

Risk adjustment 20%

Atr

Increased profit due to product sales through mobile (mCommerce) (risk-adjusted)

$1,248,000 $249,600 $374,400


Increased Spend Per Customer Through Mobile Influence On Purchase Behavior (mCommerce, In-Store,

And Website)


was an increase in average spend per customer. In short, its app users became more valuable customers. Prior

to Urban Airship, the organization tracked the average spend per customer and linked it to the level of

engagement or loyalty the customer had with the brand, such as if the customer was part of its loyalty club, was

an app user, was opted in to push notifications, or received SMS texts. After implementing Urban Airship and

using its push notification and in-app messaging features, the organization was able to see a marked increase in

the average spend per customer who had opted in for notifications over a year of time. The organization

concluded that the more cross-channel interaction with loyal customers (through mobile, SMS text, in-store, or

website), the more the customer spent incrementally annually. This level of cross-channel engagement also

enabled the organization to target offers more effectively. This increase in spend could either be driven by

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incremental increases in cart size or more frequent purchases. For example, one grocery food chain pushed a

notification on a day of the week that wasn’t as common for its shoppers. This action prompted consumers to

move their shopping trip earlier in the week. Over the course of one year, this could lead to an increase in

shopping days annually.

FIGURE 3

Increase Spend Per Customer: More Channels = More Lifetime Value


Following the Mobile Engagement Platform implementation, the composite organization increased its average

revenue per engaged app user (a customer enrolled in the loyalty club and opted-in for push) by 20% in the

second and third years of using the platform, as illustrated in Table 2. As a result, with an annual app audience

size of around 1.5 million, the composite organization received around $1 million in incremental annual revenue

in years 2 and 3. The total benefit resulting from increased spend per customer over the three years was $1.98

million.

Interviewed organizations represented a broad range of industries, including retail, grocery/food, and media.

Since it is difficult to determine the average spend per customer annually across all industries, the results of this

benefit could vary widely. Furthermore, the size of the app audience is very unique to every organization and,

depending on whether it is smaller or larger, would have a significant impact on this benefit. To compensate, this

benefit was risk-adjusted and reduced by 20%. The risk-adjusted total benefit resulting from increased spend per

customer over the three years was $1,584,000. See the section on Risks for more detail.

Loyalty club

member

Opt in for push

notification

SMS text

recipient

Cu

sto

me

re

ng

ag

em

en

t

Average lifetime value of a customer

Engaged app user

↑56%

Revenue per

customer

14

TABLE 2

Increased Spend Per Customer Through Mobile Influence On Purchase Behavior


B1 Average spend per customer annually

$22 $22 $22

B2 Percentage increase in spend per customer who opts in to push notifications

20% 23% 25%

B3 App audience size

Source: Urban Airship, based on average for

organizations matching the composite organization

1,500,000 1,500,000 1,500,000

B4 Percentage of customers who opt in to push notifications

Source: Urban Airship tracks the average opt-in rate, which is currently

43% and 50% for organizations matching

the composite organization

50% 50% 50%

B5 Average product profit margin 25% 25% 25%

Bt Increased spend per customer through mobile influence on purchase behavior

B1*B2*B3*B4*B5

$948,750 $1,031,250

Risk adjustment 20%

Btr

Increased spend per customer through mobile influence on purchase behavior (risk-adjusted)

$0 $759,000 $825,000


Reduced Spend For Email Marketing

The composite organization indicated that a key benefit from the platform implementation was a reduction in

spend for email marketing. Prior to using Urban Airship, the composite organization relied on email

communications to send customers product promotions and information. Because consumers opt in to email

communications at a lower rate than they opt in to push, the composite organization realized it could use a more

effective communication channel and save email costs for certain content. After implementing Urban Airship, the

organization could reach customers more directly and immediately with push notifications and in-app messaging.

Furthermore, due to the pricing structure of its partners, the organization was not charged per push sent,

whereas it was charged for every email sent to customers. As a result, the composite organization was able to

save about $77,200 per year in email marketing costs, or $231,660 over three years.

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TABLE 3

Reduced Spend For Email Marketing


C1 Average marketing budget 11% of revenue 330,000,000 330,000,000 330,000,000

C2 Percentage of marketing budget devoted to digital advertising/marketing

13% of marketing budget

42,900,000 42,900,000 42,900,000

C3

Percentage of marketing budget devoted to email

18% of digital marketing

budget 7,722,000 7,722,000 7,722,000

C4 Percent reduction of spend due to push notifications

1% 1% 1%

Ct Reduced spend for email marketing

C3*C4 $77,220 $77,220 $77,220

Risk adjustment 0%

Ctr Reduced spend for email marketing (risk-adjusted)

$77,220 $77,220 $77,220


Cost Avoidance Through Fewer App Updates


was bypassing the lengthy, complex, and costly process of making development updates to apps to add new

content or functionality. Prior to Urban Airship, it had to rely on mobile app developers to update apps across

multiple platforms, and those developers needed to stay current on all changes to mobile operating systems.

After implementing the platform, the composite organization estimated that it avoids one app update per year

across two platforms — not to mention long wait times — to engage mobile users with new content. This equates

to about $40,000 annually of cost avoidance through fewer app updates. More importantly, it provides marketers

a rich, interactive way to personalize messages and content to mobile app users without the intervention of a

mobile developer.

TABLE 4

Cost Avoidance Through Fewer App Updates


D1 Number of apps 1 1 1

D2 Number of platforms for which the app is designed

2 2 2

16

D3 Number of average app updates per year

4 4 4

D4 Average cost of an app update

$20,000 $20,000 $20,000

D5 Number of app updates avoided per year

1 1 1

Dt Cost avoidance through fewer app updates

D2*D4 $40,000 $40,000 $40,000

Risk adjustment 0%

Dtr Cost avoidance through fewer app updates (risk-adjusted)

$40,000 $40,000 $40,000


Total Benefits

Table 5 shows the total of all benefits across the four areas listed above, as well as present values (PVs) discounted at 10%.

Over three years, the composite organization expects risk-adjusted total benefits to be a PV of more than $2.9 million, or

$4.21 per app user who opted in for push notifications.

TABLE 5

Total Benefits (Risk-Adjusted)

Ref. Benefit Initial Year 1 Year 2 Year 3 Total

Present

Value

Atr

Increased net-new

annual profit due to

product sales through

mobile (mCommerce)

$0 $1,248,000 $249,600 $374,400 $1,872,000 $1,622,119

Bt

Increased spend per

customer through

mobile influence on

purchase behavior

(mCommerce, in-

store, and website)

$0 $0 $759,000 $825,000 $1,584,000 $1,247,107

Ctr Reduced spend for

email marketing $0 $77,220 $77,220 $77,220 $231,660 $192,035

Dtr

Cost avoidance

through fewer app

updates

$0 $40,000 $40,000 $40,000 $120,000 $99,474

Total benefits $0 $1,365,220 $1,125,820 $1,316,620 $3,807,660 $3,160,735


17

COSTS

The composite organization experienced a number of costs associated with the Mobile Engagement Platform solution:

› Mobile engagement platform annual fee.

› Implementation services.

These represent the external costs experienced by the composite organization for the mobile engagement platform and the

technical and strategic services to maximize its effectiveness.

Mobile Engagement Platform Annual Fee

Platform fees are annually recurring. The fee is based on audience size and is priced in bands. This calculation is

based on Urban Airship platform use for up to 1.5 million app users. The company has lower pricing bands for

apps with fewer users, as well as larger audience bands that would require additional monthly fees in increments

of a half a million users. The platform annual fee includes unlimited use of Urban Airship’s mobile engagement

platform (both through APIs and its web-based UI), including cross-platform push notifications, in-app messaging,

the message center, audience segmentation, location-targeting, and mobile analytics. The solution also includes

the Actions Framework (e.g. deep linking, dynamic segmentation, social sharing, and interactive notifications); up

to 50 automation triggers per app; three months of storage of app location history with the potential of tracking

longer time periods, including six months and 12 months; up to 1 TB of image hosting and optimized rich page

delivery (CDN); and a digital wallet (up to 25,000 wallet items in one year). Platform fees for the Mobile

Engagement Platform were incurred over three years and total $330,000.

TABLE 6

Mobile Engagement Platform Fees

Ref. Metric Calculation Initial Year 1 Year 2 Year 3

E1 Months per year 12 12 12

E2 Monthly fee based on total audience size (in millions)

$9,166.66 $9,166.66 $9,166.66

Et Mobile engagement platform annual fee

$110,000 $110,000 $110,000

Risk adjustment 0%

Etr Mobile engagement platform annual fee (risk-adjusted)

$0 $110,000 $110,000 $110,000


Implementation Services

Each year, for ongoing enhancements, the composite organization incurred an implementation services fee that

included strategy consulting, technical implementation services, and escalated SLAs for technical support. On

average, enterprise-size contracts have about 10% of their total value in services. The platinum technical

support, which the composite organization elected to use, has year-round support 24 hours and seven days a

week, including after business hours with Urban Airship’s most responsive SLAs. The three-year cost for

implementation services was $60,000.

18

TABLE 7

Technical Support, Strategic Consulting, And Implementation Services

Ref. Metric Calculation Initial Year 1 Year 2 Year 3

F1

Platinum technical support,

strategic consulting, and

implementation services

$20,000 $20,000 $20,000

Ft

Platinum technical support,

strategic consulting, and

implementation services $20,000 $20,000 $20,000

Risk adjustment 0%

Ftr Implementation services (risk-

adjusted) $0 $20,000 $20,000 $20,000


Total Costs

Table 8 shows the total of all costs as well as associated present values, discounted at 10%. Over three years, the

composite organization expects total costs to total a net present value of a little more than $323,000, or $0.43 per app user

who opted in for push notifications.

TABLE 8

Total Costs (Risk-Adjusted)

Ref. Benefit Initial Year 1 Year 2 Year 3 Total

Present

Value

Etr Mobile engagement

platform annual fee $0 $110,000 $110,000 $110,000 $330,000 $273,554

Ftr Implementation

services $0 $20,000 $20,000 $20,000 $60,000 $49,737

Total costs $0 $130,000 $130,000 $130,000 $390,000 $323,291


FLEXIBILITY

Flexibility, as defined by TEI, represents an investment in additional capacity or capability that could be turned into business

benefit for some future additional investment. This provides an organization with the ability to engage in future initiatives but

not the obligation to do so. There are multiple scenarios in which a customer might choose to implement Urban Airship’s

Mobile Engagement Platform and later realize additional uses and business opportunities. Flexibility would also be quantified

when evaluated as part of a specific project (described in more detail in Appendix B).

19

Opportunity to Increase Engagement of App Audience, Resulting in More Net New Revenue

The direct-response benefits that Urban Airship provides to its customers can be significantly compounded by an increase in

app engagement. Forrester Research calculates app engagement using an index that totals an app’s popularity,

commitment, frequency, and time spent among users.5 This App Engagement Index, which can be used to monitor app

performance, reveals that beyond social networking apps, most consumer apps have much room to grow in their

engagement level. The following results are possible if the app audience size grows:

• Increase in net-new revenue with audience size growth. In this study based on customer interviews, the

assumption of only 50% of app customers being “engaged” means that there remains an opportunity to double the

impact on net-new revenue through increased app engagement. Customers are embracing mobile interactions at a

steady pace, resulting in a rise in mobile influence on both purchasing and mCommerce.6 Today, companies have

the opportunity to increase this revenue impact through engagement in two ways. The first is to grow app saturation

among their customers, because today’s app audience size may only be a fraction of an organization’s total

customer base. Secondly, the level of engagement of existing app users stands to increase exponentially as mobile

supplants other forms of purchasing and marketers leverage mobile touchpoints and insights on customer

preferences to engage users more frequently. An organization that builds more engaged mobile audiences today

stands to monetize that engagement more quickly.

• Reduction in barriers to mobile purchase increase sales opportunities. Another barrier to mCommerce that will

erode steadily is consumers’ concern about sensitive information being compromised, which causes them to

hesitate to make direct purchases through mobile.7 As digital wallet options increase the security of transactions

within apps, consumers will feel more comfortable making purchases through mobile. These solutions will also add

convenience to mobile purchases, requiring less effort from the mobile user to manually type in credit card

information on the small screen, access loyalty cards, and redeem coupons, which will help facilitate mobile

purchases.

• Increase in advertising revenue garnered because of large app audience size. With increased engagement in

app audiences comes an opportunity to monetize the app through advertising. While not every brand will choose to

accept paid advertising within their mobile app for fear it will alienate or annoy their customers, many organizations

(depending on their business models) will choose to monetize the value of those app eyeballs. An increase in app

popularity will provide the opportunity to advertise to more users, and an increase in time spent within the app will

provide the opportunity to multiply impressions for a given user. Organizations that invest now in building a robust

app platform with push notifications and personalized rich content with in-app messages and message centers to

drive app engagement stand to gain more in advertising revenue down the road.

• Lower cost of acquiring a loyal app user. Driving app downloads is what enables an organization to reap the

rewards of getting a coveted spot in customers’ hip pockets. But driving awareness of the app and encouraging its

download requires marketing time and resources. Furthermore, most app users tend to be fickle to start — the

common industry assumption is that 70% of all apps are deleted within 30 days of download. So, converting an app

downloader to a loyal app user is critical for making a worthwhile investment in building and maintaining a mobile

app. Messaging functionality helps to reengage fickle users by proving timely, relevant information to drive them

back into the app. For example, push notifications viewable above the lockscreen provide customers easy access to

brand content and promotions and keep the brand top of mind. These notifications can also peak interest and drive

users back into the app or enable them to receive contextually relevant information served up by apps.

Opportunity to Increase Advertising Revenue for Media Companies

Two of the organizations interviewed for this research and included in the composite organization are media companies; they

generate revenue directly from the advertising that they sell. News and media apps rank fourth in popularity for opt-ins

among app users, behind only social networking apps, weather apps, and finance/banking apps.8 Because consumers are

accessing news sites more frequently from their mobile phones than desktops, the opportunity to monetize that audience

20

through advertising is significant. While mobile advertising revenue can range widely depending on the type of organization,

a safe and conservative assumption is that 20% of total advertising revenue for new media organizations is earned from

mobile advertising within apps.9 Push notifications grow audience size and time spent within the app, increasing the

opportunity for advertising impressions among an often coveted demographic. The figure below highlights the impact that

increased impressions can have on mobile advertising revenue growth.

It is impossible to project a single value around revenue increase from mobile advertising because several variables affect

the result for each app. Key factors include: frequency of ads shown in a given length of time; type of ad shown, such as a

rich media interstitial (which commands a higher CPM than a static banner); and fill rate. To calculate the benefit for an

organization requires accounting for the number of added impressions based on new unique app users, increased time

spent, frequency of ads served, and the eCPM that an organization’s app commands for ads. Sample numbers based on

this research and industry standards are provided in Figure 4.

Note: Digital native news entities such as The Huffington Post, BuzzFeed, Bleacher Report, and Business Insider had four to

10 times more monthly unique visitors than the mobile apps of traditional news agencies. This means potential for additional

advertising revenue based on their increased impressions.10

FIGURE 4

Impact Of Increased Impressions On Mobile Advertising Revenue


RISKS

Forrester defines two types of risk associated with this analysis: “implementation risk” and “impact risk.” Implementation risk

is the risk that a proposed investment in the Mobile Engagement Platform may deviate from the original or expected

requirements, resulting in higher costs than anticipated. Impact risk refers to the risk that the business or technology needs

of the organization may not be met by the investment in the Mobile Engagement Platform, resulting in lower overall total

benefits. The greater the uncertainty, the wider the potential range of outcomes for cost and benefit estimates.

Baseline — no

push notifications

3x increase in

impressions

5x increase in

impressions

Average monthly unique app

visitors for media sites = 7,500

(Source: comScore Media Metrix,

January 2015, US)

7,500 7,500 7,500

Frequency that the media/news

user accesses their mobile app

in one month

Once daily 3x daily 5x daily

Average amount of time spent using

news app = 4.5 minutes * = 9 30-second

opportunities per visit to target news/media

app users with ads

2,025,000 6,075,000 10,125,000

Average eCPM (revenue per 1,000

impressions) = $3 - $20 (Source: averages

based on industry reports from ad

networks and app publishers)

$6,075,000 -

$40,500,000

$18,225,000-

$121,500,000

$30,375,000-

$202,500,000

(Source: Forrester’s Technographics® 360 methodology, which combines behavioral tracking data,

online survey data, and market research online community responses.)

21

TABLE 9

Benefit And Cost Risk Adjustments

Benefits Adjustment

Increased net-new annual profit due to product sales through mobile

(mCommerce) 20%

Increased spend per customer through mobile influence on purchase behavior

(mCommerce, in-store, and website) 20%


Quantitatively capturing implementation risk and impact risk by directly adjusting the financial estimates results provides

more meaningful and accurate estimates and a more accurate projection of the ROI. In general, risks affect costs by raising

the original estimates, and they affect benefits by reducing the original estimates. The risk-adjusted numbers should be taken

as “realistic” expectations since they represent the expected values considering risk.

The following impact risks that affect benefits are identified as part of the analysis:

› Increased net-new annual profit due to product sales through mCommerce. Interviewed organizations represented a broad

range of industries, including retail, grocery/food, and media. Since it is difficult to determine the average price per product

across all industries, the results of this benefit could vary widely. Furthermore, the average number of units sold per day

varies by product type, category, and price. To compensate, this benefit was risk-adjusted and reduced by 20%.

› Increased spend per customer through mobile influence on purchase behavior (mCommerce, in-store, and website).

Interviewed organizations represented a broad range of industries, including retail, grocery/food and media. Since it is

difficult to determine the average spend per customer annually across all industries, the results of this benefit could vary

widely. Furthermore, the size of the app audience is very unique to every organization and, depending on whether it is

smaller or larger, would have a significant impact on this benefit. To compensate, this benefit was risk-adjusted and

reduced by 20%.

Other risks that were not quantified in this study include the average app audience size, which can vary dramatically by

organization; the quality of the app itself, which would have an impact on its likelihood of yielding the benefits described in

this paper; and the product and brand reputation of the goods sold.

Table 9 shows the values used to adjust for risk and uncertainty in the cost and benefit estimates for the composite

organization. Readers are urged to apply their own risk ranges based on their own degree of confidence in the cost and

benefit estimates.

22

Financial Summary

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 in Urban Airship’s platform.

Table 10 below shows the risk-adjusted ROI, NPV, and payback period values. These values are determined by applying the

risk-adjustment values from Table 9 in the Risks section to the unadjusted results in each relevant cost and benefit section.

FIGURE 5

Cash Flow Chart (Risk-Adjusted)


TABLE 10

Cash Flow (Risk-Adjusted)

Initial Year 1 Year 2 Year 3 Total Present Value

Costs

($130,000) ($130,000) ($130,000) ($390,000) ($323,291)

Benefits

$1,365,220 $1,125,820 $1,316,620 $3,807,660 $3,160,735

Net benefits

$1,235,220 $995,820 $1,186,620 $3,417,660 $2,837,444

ROI

878%

Payback period

two months


($500,000)

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Initial Year 1 Year 2 Year 3

Cas

h f

low

s

Financial Analysis (risk-adjusted)

Total costs Total benefits Cumulative total

23

Urban Airship Mobile Engagement Platform: Overview

The following information is provided by Urban Airship. Forrester has not validated any claims and does not endorse Urban

Airship or its offerings.

Urban Airship is leading the movement of mobile innovators. Mobile strategies must extend beyond app acquisition or risk

leaving 70% of users behind within 30 days after the download. Urban Airship helps brands build high-value relationships

from the moment of download, increasing engagement 4x and retention 2x to turn users into loyal brand advocates. The

Urban Airship Mobile Engagement Platform helps brands build their businesses by serving their customers with the mobile

moments that matter to them.

Only Urban Airship arms companies with the broadest set of possibilities for creating rich, interactive experiences that drive

new levels of reach, relevance, and immediacy with all mobile audiences. For example, ABC News lets users curate stories

of interest for personalized newsfeeds; Starwood Hotels provides frictionless check-in; REI provides store-specific service

messages and offers; Bankinter enables users to cancel stolen credit cards with a tap on a smartwatch; and Alaska Airlines

delivers mobile boarding passes and real-time gate changes.

INNOVATE FASTER

The world of mobile is moving at breakneck speed, which requires an innovation partner that is mobile-born and mobile-

focused. Urban Airship is the first to operationalize advancements in mobile technology, keeping at the forefront of what is

possible and extending those capabilities to customers with cutting-edge, out-of-the-box solutions. With Urban Airship,

companies join a movement of mobile innovators.

ENGAGE BEYOND THE APP

For the first time, companies can expand their reach beyond push notifications to give customers a “wow” experience across

the entire mobile surface area, inside and outside of the app, with interactive notifications, in-app messages, message

centers, wallets, and watch. Coordination across all of these touchpoints with complete location-targeting capabilities gives

brands the flexibility to create a holistic and personalized customer experience at every right moment.

Only Urban Airship offers unique, ready-to-use engagement actions that make sure every experience is relevant and useful.

In addition, Urban Airship delivers new levels of customer immediacy with notifications on wearables that users can consume

with a quick glance, respond to with a single tap, and trigger actions across the entire mobile surface area.

TAP THE MOBILE EVENT STREAM

Companies choose Urban Airship to take advantage of one of their most valuable assets: user data from the mobile channel.

Urban Airship allows customers to tap into the mobile event stream, adding this rich source of event data to existing

customer information to feed strategies that transform the business. This ability to combine comprehensive mobile data

along with data from business systems provides customer insights that power tailored experiences with new levels of

precision, relevance, and timing.

DELIVER THE MOMENTS THAT MATTER

Urban Airship gives companies the broadest range of capabilities to precisely engage the user in the moments that matter

most. For the first time, companies can serve the customer at every relevant, appropriate moment across the expanded

mobile surface area, using location, proximity, life-cycle state, customer attributes, and cross-channel data to power highly

precise mobile experiences.

24

RIDICULOUSLY GREAT CUSTOMER SERVICE

After working with the world's top mobile innovators over the past six years, Urban Airship understands that winning on

mobile is an always-on team sport. A team of dedicated account managers, technical wizards, and business strategists work

side by side with customers to guide and execute their mobile engagement road maps. Global implementation and support

services are always available, 24x7x365. With Urban Airship, customers have access to a partner with the best practices

and knowledge that turn mobile from a “checkbox” to a transformative force that drives the business.

Urban Airship helps leading brands engage their mobile users and build high-value relationships from the moment customers

download an app. Thousands of companies and some of the most demanding brands in retail, media and entertainment,

sports, and travel and hospitality trust Urban Airship to deliver the mobile moments that matter to their customers and to their

business.

25

Appendix A: Composite Organization Description

For this TEI study, Forrester has created a composite organization to illustrate the quantifiable benefits and costs of

implementing the Mobile Engagement Platform. The composite company is intended to represent a large retail organization

with about $3 billion in annual revenue and is based on characteristics of the interviewed customers.

The composite company has about 1.5 million app users and many times more customers. On average, about 50% of those

active app users opt in for push notifications.

In purchasing the Mobile Engagement Platform, the composite company has the following objectives:

› Promote specific products or special offers to increase sales.

› Improve customer experience.

› Offer one-to-one communications, personalized content, and offers.

› Convert app users to known customers.

› Send transactional receipts through push notifications rather than email.

› Leverage mobile for cross-promotion, driving more engagement to social channels and SMS.

› Encourage customers to tell their friends, in order to reach new customers.

For the purpose of the analysis, Forrester assumes that the composite organization is a product- or transaction-oriented

company that generates revenue through the mobile channel through product sales or advertising revenue. The composite

has one major app per brand (if it has multiple brands within its portfolio) across two mobile platforms. It also assumes that

the organization has been using push notifications for about two years and in-app messaging for six months. The

organization delivers about one to two messages per week to app users. The organization has a significant and growing

population of app users measured by downloads and monthly usage/activity. It also has a growing percentage of app users

who have opted to receive push notifications.

FRAMEWORK ASSUMPTIONS

Table 11 provides the model assumptions that Forrester used in this analysis.

The discount rate used in the PV and NPV calculations is 10%, and the time horizon used for the financial modeling is three

years. Organizations typically use discount rates between 8% and 16% based on their current environment. Readers are

urged to consult with their respective company’s finance department to determine the most appropriate discount rate to use

within their own organizations.

26

TABLE 11

Model Assumptions

Ref. Metric Calculation Value

G1 Number of product pushes per week 1, growing to 3

G2 Percentage of app users who opt in to push 50%

G3 Average product profit margin 25%

G4 Average marketing budget 11% of revenue

G5 Percentage of marketing budget devoted to

digital advertising 13% of marketing budget

G6 Percentage of marketing budget devoted to

email 18%

G7 Average number of app updates per year 4


27

Appendix B: Total Economic Impact™ Overview

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. TEI assists technology vendors in winning, serving, and retaining

customers.

The TEI methodology consists of four components to evaluate investment value: benefits, costs, flexibility, and risks.

BENEFITS

Benefits represent the value delivered to the user organization — IT and/or business units — by the proposed product or

project. Often, product or project justification exercises focus just on IT cost and cost reduction, leaving little room to analyze

the effect of the technology on the entire organization. The TEI methodology and the resulting financial model place 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. Calculation of benefit estimates involves a clear dialogue with the user organization to understand

the specific value that is created. In addition, Forrester also requires that there be a clear line of accountability established

between the measurement and justification of benefit estimates after the project has been completed. This ensures that

benefit estimates tie back directly to the bottom line.

COSTS

Costs represent the investment necessary to capture the value, or benefits, of the proposed project. IT or the business units

may incur costs in the form of fully burdened labor, subcontractors, or materials. Costs consider all the investments and

expenses necessary to deliver the proposed value. In addition, the cost category within TEI captures any incremental costs

over the existing environment for ongoing costs associated with the solution. All costs must be tied to the benefits that are

created.

FLEXIBILITY

Within the TEI methodology, direct benefits represent one part of the investment value. While direct benefits can typically be

the primary way to justify a project, Forrester believes that organizations should be able to measure the strategic value of an

investment. Flexibility represents the value that can be obtained for some future additional investment building on top of the

initial investment already made. For instance, an investment in an enterprisewide upgrade of an office productivity suite can

potentially increase standardization (to increase efficiency) and reduce licensing costs. However, an embedded collaboration

feature may translate to greater worker productivity if activated. The collaboration can only be used with additional

investment in training at some future point. However, having the ability to capture that benefit has a PV that can be

estimated. The flexibility component of TEI captures that value.

RISKS

Risks measure the uncertainty of benefit and cost estimates contained within the investment. Uncertainty is measured in two

ways: 1) the likelihood that the cost and benefit estimates will meet the original projections and 2) the likelihood that the

estimates will be measured and tracked over time. TEI risk factors are based on a probability density function known as

“triangular distribution” to the values entered. At a minimum, three values are calculated to estimate the risk factor around

each cost and benefit.

28

Appendix C: Forrester And The Age Of The Customer

Your technology-empowered customers now know more than you do about your products and services, pricing, and

reputation. Your competitors can copy or undermine the moves you take to compete. The only way to win, serve, and retain

customers is to become customer-obsessed.

A customer-obsessed enterprise focuses its strategy, energy, and budget on processes that enhance knowledge of and

engagement with customers and prioritizes these over maintaining traditional competitive barriers.

CMOs and CIOs must work together to create this companywide transformation.

Forrester has a four-part blueprint for strategy in the age of the customer, including the following imperatives to help

establish new competitive advantages:

Transform the customer experience to gain sustainable competitive advantage.

Accelerate your digital business with new technology strategies that fuel business growth.

Embrace the mobile mind shift by giving customers what they want, when they want it.

Turn (big) data into business insights through innovative analytics.

29

Appendix D: Glossary

Discount rate: The interest rate used in cash flow analysis to take into account the time value of money. Companies set

their own discount rate based on their business and investment environment. Forrester assumes a yearly discount rate of

10% for this analysis. Organizations typically use discount rates between 8% and 16% based on their current environment.

Readers are urged to consult their respective organizations to determine the most appropriate discount rate to use in their

own environment.

Net present value (NPV): The present or current value of (discounted) future net cash flows given an interest rate (the

discount rate). A positive project NPV normally indicates that the investment should be made, unless other projects have

higher NPVs.

Present value (PV): The present or current value of (discounted) cost and benefit estimates given at an interest rate (the

discount rate). The PV of costs and benefits feed into the total NPV of cash flows.

Payback period: The breakeven point for an investment. This is the point in time at which net benefits (benefits minus costs)

equal initial investment or cost.

Return on investment (ROI): A measure of a project’s expected return in percentage terms. ROI is calculated by dividing

net benefits (benefits minus costs) by costs.

A NOTE ON CASH FLOW TABLES

The following is a note on the cash flow tables used in this study (see the example table below). The initial investment

column contains costs incurred at “time 0” or at the beginning of Year 1. Those costs are not discounted. All other cash flows

in years 1 through 3 are discounted using the discount rate (shown in the Framework Assumptions section) at the end of the

year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations are not calculated until 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.

30

Appendix E: Supplemental Material

Related Forrester Research

“Three Key Features That Increase App Engagement,” Forrester Research, Inc., December 10, 2014

“The App Engagement Index,” Forrester Research, Inc., November 10, 2014

“Mobile’s Role In The Consumer’s Path To Purchase,” Forrester Research, Inc., April 15, 2015

“Mobile Push Notifications: Do They Save Or Spend Consumers’ Time?” Forrester Research, Inc., January 12, 2015

“Beyond ROI: Showcasing The True Impact Of Mobile Marketing,” Forrester Research, Inc., January 13, 2015

“The ROI Of Mobile,” Forrester Research, Inc., January 11, 2010

Online Resources

“State of the News Media 2015,” Pew Research Center, April 29, 2015 (http://www.journalism.org/2015/04/29/digital-news-

audience-fact-sheet/)

Appendix F: Endnotes

1 Forrester risk-adjusts the summary financial metrics to take into account the potential uncertainty of the cost and benefit

estimates. For more information, see the section on Risks.

2 Source: “Mobile Engagement Industry Benchmarks: Push Notification Opt-In Rates,” Urban Airship, April 15, 2015 (http://urbanairship.com/lp/mobile-engagement-benchmarks-opt-in).

3 Source: Forrester Mobile Behavioral Technographics

® Research

4 Source: “The Global Mobile Report,” comScore, July 14, 2015 (https://www.comscore.com/Insights/Presentations-and-

Whitepapers/2015/The-Global-Mobile-Report).

5 Source: “The App Engagement Index,” Forrester Research, Inc., November 10, 2014.

6 Source: “Forrester Research Mobile Commerce Forecast, 2012 to 2017 (US),” Forrester Research, Inc., August 8, 2012.

7 Source: “Mobile’s Role In The Consumer’s Path To Purchase,” Forrester Research, Inc., April 15, 2015.

8 Source: “Mobile Push Notifications: Do They Save Or Spend Consumers' Time?” Forrester Research, Inc., January 12,

2015.

9 Source: Estimate based on annual reports of organizations interviewed for this research and statistics from Pew Charitable

Trust on advertising revenue for news/media outlets.

10 Source: “Digital News — Audience: Fact Sheet,” Pew Research Center analysis of comScore Media Metrix, January 2015,

(http://www.journalism.org/2015/04/29/digital-news-audience-fact-sheet/).

https://www.comscore.com/Insights/Presentations-and-Whitepapers/2015/The-Global-Mobile-Report

https://www.comscore.com/Insights/Presentations-and-Whitepapers/2015/The-Global-Mobile-Report

forrester-urban airship tei study 09142015

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