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Edited Transcript of YOU.L earnings conference call or presentation 8-Oct-19 8:00am GMT

Full Year 2019 YouGov PLC Earnings Presentation

London Oct 9, 2019 (Thomson StreetEvents) -- Edited Transcript of YouGov PLC earnings conference call or presentation Tuesday, October 8, 2019 at 8:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Alexander George McIntosh

YouGov plc - CFO & Executive Director

* Stephan Shakespeare

YouGov plc - Co-Founder, CEO & Executive Director

* Sundip Singh Chahal

YouGov plc - COO & Executive Director

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Conference Call Participants

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* Bridie Anne Barrett Schmidt

Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst

* Fiona Catherine Orford-Williams

Edison Investment Research Limited - Director & Sector Head Media

* Ian Richard Whittaker

Liberum Capital Limited, Research Division - Head of European Media Research

* Jessica Pok

Peel Hunt LLP, Research Division - Analyst

* Paul David Richards

Dowgate Capital Stockbrokers Limited - Executive Director & Head of Research

* Sean Thapar

Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst

* Steven Craig Thomas Liechti

Numis Securities Limited, Research Division - Analyst

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Presentation

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [1]

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Thank you very much for coming. Some -- a couple new faces, I think. The button, here is this one. There we go.

So the headline numbers, which you all are seeing, they speak for themselves. Revenue growth up 17%, 10% underlying. That obviously reflects the difference between FX and acquisitions and so forth. The adjusted profit -- operating profit up 45%, and that is also 45% in underlying business growth because the things happened to equally equalize on either side on the up and down.

The earnings adjusted per share, up 30%; adjusted operating margin, 2 percentage points. Net cash balance is GBP 37.9 million, and the completion of the first 5-year plan. Now that is a big milestone for us, and we have exceeded our targets on this. We are recommending an increase of 33% to the dividend, and our current trading is in line with the Board's expectations. Those are the headline numbers. All looking pretty good.

We've had strong growth over the last 5 years, there are the numbers. And you'll notice a little tiny flattening off there at the end because we have, and we really have emphasized this, last year was an investment year. We put lots of money into our technology, into more panel, more tooling up for new products and so forth.

We did not reach this stretched target by cutting back on our spending, by saving anything, by cutting any corners; the opposite, we fattened up for the next. So the last year was actually the first year of the 5-year plan -- of next 5-year plan.

The 50/50 split that we had set ourselves, we achieved that about a year early. This is the diagram that shows what's happened to the various forms of business. The big part is -- at the bottom is the -- obviously, was the overwhelming part at the beginning is now under half of the total revenue is Custom, then Data Services and Products on top of that.

And again, one of the questions that arises is there's a flattening there, as everyone in this room, I think, knows that is a deliberate effect of the fact that we've been cutting away types of Custom Research, project-based complex stuff that isn't and never will be profitable to the level that we want it, anyway. And that isn't repeatable, that isn't predictable, we have downgraded that, deliberately cut that away. It's been replacing -- been replaced by what we think is the right kind of custom, the Cube-aligned custom, and you'll notice, as you'll hear later, that the profit margin on the custom is up.

Strong top line performance, slightly -- now we don't mean to be misleading, but obviously, we're focusing on the end of that. We haven't exceeded our targets by double the number, 0's back there somewhere. But nevertheless, 4% ahead of our stretch targets, which is on CAGR, which we think is really good. And we are very committed, as you know, to the planning, the next 5-year plan, which we will talk about more after the -- you look at -- you've heard the numbers and heard from the CEO by the operational update. But in brief, the first 5-year plan was BrandIndex, Profiles and Omnibus, huge emphasis on our products, on our syndicated data subscriptions and alignment of Custom Research, making it more and more about the multi-wave, multi-country, repeat custom rather than one-off projects, and of course, growing the footprint.

The U.S. has become substantially larger in relationship to everything else, and that will continue to be the case. APAC has gone from being very tiny to still being small, but a much faster trajectory than some of our regional groups.

The new 5-year plan. And I'll, again, I say on this more later, is based on technology. So Crunch, Cube, Collaborate are all new pieces, creating a universal platform. I'll show you how it all fits together afterwards. And we're really going from an international presence to a global presence. We want to be able to fulfill the really big pieces of work, the big trackers for the biggest companies without breaking a sweat, without leaving our own panel, without saying, oh, we haven't got local representation. We want to be truly global, and that is a big part of our next plan.

And you got direct, which fulfills a number of functions across actually all of these -- the other 3, because it's going to be a more global tool once it gets up and running because it puts up self-service on top of that, and it does new things, it goes into activation of data.

That is the quick summary, and I'll hand you over for the financial update, Alex.

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Alexander George McIntosh, YouGov plc - CFO & Executive Director [2]

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Good morning, everybody. Let's go through some of the highlights from our P&L.

Just to echo Stephan, it's been another year of incredible growth for the group, and we're pleased to be presenting such a strong set of results. Just to go some -- through some of the top line numbers, group revenue is up to GBP 136.5 million. We've included a number here for underlying business growth, just to sort of give some like-for-like comparisons. We have had a little bit of benefit from FX because we've been already focusing a lot of our efforts on building up a U.S. business, and obviously, the sterling rate has impacted that.

We've also got some of the acquisitions coming online. We've got about GBP 9 million of our GBP 20 million of absolute growth is coming through from acquisitions made throughout the period. And we've had some not quite discontinuing operations in a purest sense of the word, but as Stephan mentioned, this sort of restructuring Custom has been where we've taken out quite a lot of the revenue that was in the Custom team, and we're really at the tail end of that now. In the past, we talked about the Nordics, we talked about the Middle East, we talked about Germany. This is the final year of having that impact.

Continued focus on the higher-margin. Data Products has driven the group margins higher. Just to remind everybody, this is the new basis of our adjusted operating profit definition, where we're including amortization. And so we've restated the 2018 numbers to give you the like-for-like comparative, but a couple of points of margin increase for the year is something we're pretty pleased to have achieved, also in light of Stephan's previous comment about the fact that we have continued to invest in [our] operations.

We ended the year with a strong balance sheet. The group has no debt. The couple of things we've done in the year, one is -- has some pretty aggressive working capital management. You see our data base has come down pretty significantly, get to the cash flow, you'll see, we've had a pretty big benefit from that.

We're carrying contingent liability of GBP 10.1 million on the balance sheet. I know, we get asked this question a lot about acquisitions. We have had -- we've made 5 in the last 18 months, also not paying very much upfront for them. These deals are all based on an earn-out. So in a way, you can think about some of our cash as earmarked out to satisfy those future liabilities. But nonetheless, we end the year with GBP 13.7 -- GBP 37.9 million of cash, and I'll preempt the acquisition question which I'm sure is coming, we are actively in the market looking for target companies.

Cash flow, another year of good cash conversion. I mentioned the working capital point, that's helped us increase cash conversion to 124% of EBITDA. Investment is a bit particularly important point. We've obviously acquired some companies and spent GBP 6.8 million in the year on acquisitions, but we continue to invest in panel: GBP 4 million globally; and technology, GBP 5.5 million.

And as we go into FY '20 in our 5-year plan 2, now focusing on the panel and technology spend, we'll clearly continue. Dividend in the year was 3p per share, where -- which means the absolute number is GBP 3.2 million. We're increasing our dividend for -- to be up to 4p. So we'd like to take that as a positive sign for how we feel about our promise in the company.

Going to quickly go through some segmental notes. The group continues to be driven by Data Products performance. That's a fantastic result for us to increase revenue coming from Data Products up to GBP 41.5 million. You'll see there's a difference between the reported and the underlying. We're starting to see some of the acquisitions that we've made beginning to help contribute to some of the Data Products revenue, particularly in our sports business, where we've been able to repackage some of the existing Data Products we have, make a sports version of that and get into market. So we're pleased that the acquisitions can not only help us sort of contribute to overall performance, but help drive the strategy going forward.

Data Services had another strong year. Just want to make a small note here where we've been talking for a while about some transitioning, some of the sort of low-profit, non-scalable custom work, trying to repackage that up to look like something that's more like a Data Services business. In the year, we've had sort of straight allocation, but we've essentially repackaged a lot of the Nordic custom work into a Data Services type offering. And so there's a small shift between Custom and Data Services, which explains a bit of the difference between the reported and the underlying.

Custom is -- has had a relatively flat year. That is as intended. We've really been, for this 5-year plan, focusing on Data Products and Data Services. And we get into the next time, we'll talk more about how we expect Custom to start contributing more to top line growth.

Looking at where we make our money. The Data Products, which to remind everybody, this is our flagship products, BrandIndex and Profiles. This is the part where we have a lot of operational leverage, and so the good revenue growth we've had in that department has really flown through into profit, and you can see it's contributing a lot of the growth that we've had at the group level. But across the board, we've got good profit generation coming from all of the departments, particularly pleasing is Customer Research, although revenue has been relatively flat. The focus on being on panel, using our technology, using Crunch as a delivery mechanism has helped us increase profit growth ahead of revenue growth.

A reminder for our geographic spread. We are continuing to invest in new geographies, but the group is still sort of primarily focused on the U.K. and U.S. in terms of where we generate our revenue, and that matches the market research industry as a whole. Just taking a step back, these growth rates, with the exception of Middle East where we've been sort of restructuring the custom parts of that team, these growth rates are well ahead of any of the countries that we, from a market research industry perspective, any of the countries that we currently operate in. So we're very pleased with U.K., particularly under this sort of political scenario, is growing so strongly, and we're hopeful that, that will continue into next year.

The U.S. has had, from a reporting perspective, good growth. Just want to make the point on an underlying basis, it looks a little lower than it has previously. That's really, it's because we're coming off of a really high FY '18 growth rate we have had in the states.

But I guess the standout on this slide is Mainland Europe, which for a few years in the group has been a little bit of a problem child. The focus that we've really had on sort of aligning that -- the entire sort of continent to be on strategy is really starting to pay off for us, good revenue growth, and especially in the second, we'll see good operating profit growth as well.

Just a final -- finalize the last point, just on geographic operating profit. The U.K. and the U.S., as I mentioned, they continue to be as the main profit drivers. You'll notice the margin has come down a little bit. As we've been going through our investment program, we've been -- we're starting to allocate more of our central overheads specifically to the U.S. and the U.K. So you look at the very bottom at a group level, that's been growing. Obviously, there's a little bit of shift between the U.K., the U.S. and central costs.

I do make the point, again, around Mainland Europe, that's a great result from the team there to really start to see some of the work that they've been doing to realign the operations there to be on strategy starting to come through. And 164% operating profit growth in year is a fantastic result.

And with that, I will hand to Sunny.

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Sundip Singh Chahal, YouGov plc - COO & Executive Director [3]

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Thank you, Alex.

So those of you that haven't met me, my name is Sunny Chahal. I'm Chief Operating Officer, been in the Group since 2005, took on role as Group COO in 2014. Merely a happy coincidence that the successful 5-year payment [is going fine in that way], but without further ado.

So those of you that have been with us before, you've seen us actually break out these 2 products separately in previous presentations. So BrandIndex and Profiles, increasingly we're selling this proposition together Plan and Track. Slightly the wrong way around, but the Track part of it comes from BrandIndex. So BrandIndex is a product that we launched initially in the U.K. in 2005. Every single day across 40 different markets, we interview thousands of respondents. All of those respondents are drawn from the panel. And those questions, essentially consistent. So if you are a marketing manager, for example, assigned in the U.S., you are able to track your brand across as many markets as we offer service, and you're able to track it across the same consistent measures.

You then get the data from our service the very next day. And there really is nothing like that anywhere in the world. So the largest market for that product is, obviously, the U.S. That's the case for the last couple of years. That's where most of our international buyers actually sit. The Plan side of it comes from Profiles. So you're able to track how -- what people think of your brand, who are the people that you really care about. So using our Profiles product, you're able to actually create segments.

How are you able to create those segments? We ask a huge amount of survey questions through our panel. It can be basic demographics, it can be attitudinal questions, it can be brand usage and preference, it can be media consumption, it can be online behavior. From that, you're able to identify your target segments. You can then take that segment and plug it into a digital advertising partner, and then basically target those audiences.

So together, the proposition is Plan and Track. We have to plan the segments, and they have to track how effective your advertising, your campaigns are to those segments. Very pleasingly, we've seen great revenue growth. So in the 5 years, we've been able to take it up fivefold. So starting from GBP 8 million in FY '14 to just a tad under GBP 40 million in FY '19. Pleasingly, over the last year, we saw a growth of 29%.

From the other division is YouGov Data Services. So this really was a bedrock of ours when we first started on this 5-year plan. This is really the fast turnaround research. So this is why clients come to us. They actually don't want analysis, but they want us to craft a survey for them, they want us to field it, and they want the data, usually they want it back very, very quickly. The reason why they come to us is the quality of our panels. They know they're going to get data that they can trust; mainly our clients in the U.K. for the Omnibus service, often in PR or media industry. People ask them who carried out your survey? If it's carried out by YouGov, they have a much higher chance of getting that data placed.

So here, we're attracting more and more multi-national clients, and that's leading to more and more multi-country work. In the U.K., we're the market leader, and we continue to grow globally. And again, this is also available in over 40 markets worldwide. Pleasingly, over the last 5 years, we've seen a tripling of that number, some [slide off of GBP 12 million]. So higher than the Plan and Track proposition, and we now have GBP 37 million. In the last period, we also grew that by 28%.

The final commercial division is Custom Research. So as both Alex and Stephan touched upon, over the past 5 years, we've actually been slightly restructuring that business. You can see that in the adjusted operating profit. You can see how that's jumped from consistently around the 8%, 9%, 10% mark to over 20%, so now about 22%. This type of work is bespoke. So this is why our clients will come to us, and they want us to craft a study for them, and they want us to analyze the data.

Generally, in market research, this tends to be quite heavy laborious, low-margin work. So we're very pleased with the margins that we've been able to extract. What we have done is we've been taking out the low-margin work and the work that doesn't differentiate us over the last 2 years. What does differentiate us is our panel. So if we can't connect that custom survey to our panel, to our connected dataset, we have no differentiation. Any company can do that custom survey, but only we can connect it to that underlying data from our products.

Over the past 12 months, we've been able to grow that operating profit by 10%. We're obviously continuing to invest in our development and our technology. So we're investing in our websites, our apps and dashboards. All of this to make it easier for our clients and public to interact with our data. So as a market research plan, we have some very different audiences. We have the public. So you know that in the U.K. that we are a very well-known research brand. We have people that come to our site to read about our data. They are not clients. They expect to come to us to understand what's going on in sports, in politics and entertainment, and we can give them that data.

We continue to invest in our proprietary technology. Those of you who's followed us for a while know that we have our own development stack, and we have our own tech stack. Crunch is our data analytics platform, and of course, we will continue to invest in that in this year.

We've also, hopefully, soon to launch a new version of the Screen, and that will be by the end of the year. The platform -- the universal platform is something that Stephan is going to touch upon in his slides to follow. None of this is possible without investment in the panel. So again, coming back to it: why do people come to us across these 3 commercial divisions? They come to us because of the quality of our data. Why do we have high-quality data? It's because of our investment in panels. Our global panel is over 8.3 million. That's spread across over 40 countries. We are very, very good at this. We've been doing it for nearly 20 years.

We know what it takes to engage and retain analysts. And that's been independently verified by various academic bodies, et cetera. And during the year, we also established a panel and operations in Canada, and also, actually, Mexico as well. So to Stephan's point, we'll continue to build out the network, the global network. We're also adding affiliate partners. Why are we going down the affiliate route? So if you look at this list of new markets, some of these are markets that we, as a company, would like to be in. So for example, Japan, we realized there's a lucrative local market, but also it's actually quite a difficult traditional market to break into. So there, by partnering with a local partner, we feel we increase our chances of local success.

Then there's also other markets, which actually for various reasons, are slightly more difficult to navigate, so Russia, Pakistan, Egypt. Now in the case of Pakistan and Egypt, we actually already have existing panels, but we want to maximize local sales, and we're able to do that through affiliate partners.

In the year, we also did 2 very small startup tech acquisitions. The first of which was Portent. IO, which is now re-branded to YouGov Signal. So these guys essentially use digital touch points and sentiment analysis, and they combine that with survey data to essentially tell TV studios -- sorry, film studios and TV programs insights into what consumers think about their shows. We also then have Inconvo, which is a small U.K.-based platform, which enables us to engage with very hard-to-reach audiences.

In the prior year, we actually made 2 acquisitions, which have been integrated very well. So there's Galaxy, which is down in Australia, which is now re-branded completely to YouGov and is integrated down there, and there's also SMG Insight, which is re-branded to YouGov Sports and is our sports research agency.

There's also some development that we're carrying on our global level. We have panels in over 40 countries. We don't have offices in over 40 countries. What we've actually learned is the requirement for keeping those panelists engaged, but it doesn't necessarily mean [having to keep someone around]. The most important thing is to serve those panelists with a variety of surveys, engagement needs to be very, very high. We're able to scale by investing in our model of centers of excellence. So these are shared service centers. So we have 2 -- 3 relatively large service centers. So 2 for data operations and processing in Bucharest and Mumbai and a further one in Warsaw.

There is actually a slight typo there. So rather than being 2.8%, it's actually over 4%. We've been able to reduce the percentage spend on global operations from over 4% down to 2.1% in that 5-year period. So apologies for that typo. The area where we actually see where we can really exploit over the next 5 years is our focus on global key accounts. We know we have a great Rolodex of key clients. We have a huge opportunity to be able to sell to those clients across all of our 3 divisions. And over next 2 to 3 years, we'll be investing heavily in individuals who can help us to do that. Stephan?

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [4]

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Right. So we've built a very great platform, great base from which to grow further, and we are very ambitious. We want this to be a universal platform rather than what it is at the moment, which is a bunch of tools that fit together reasonably well. We want this to be a single platform. What we call the Screen, and we've used that term even before. It isn't really about a Screen, it is about the fact that we want everything connected as one platform. And activation, which I'll describe in a minute, will be the thing that drives that how you activate our data.

We want to be the leading provider of marketing and opinion data, and there are 3 strategic pillars, which we'll talk about in a moment: Data Integration, Public Data and Ethical Activation. So integration, data and activation are the 3 pillars of this strategy.

And it is defined, previously I've only used 2 of these bits, I said best data and best tools. That remains -- the best data, the best tools remains the way that we will talk to the public. The public doesn't know or care what a panel is. To people like selves or our clients, we start with best panel because one of the things that we've discovered in our market is that we are somewhat ahead, I think, of our industry. In fact, we've been a long way ahead for too long. And it's one of the things that we've been able to do in the last few years is adapt and align with the way that our clients actually work. We think they should all be incredibly data savvy and incredibly technical in how they do things. And actually, some of them are, they're fantastic, and some of them are not so technical and not so data savvy.

And one of the things that we know is that best panel is a way to reach every one of our clients because everybody needs the panel to be good to get good data. People are used to very mixed levels of sample SKUs and not being able to reach the right number of niche -- the right niche groups, or not to be able to get certain countries covered and so forth. A good panel is something that every client understands, and we probably haven't been good enough at explaining what is strong about our panel. We have such great ways of doing it. We refer to the famous, to us, famous Pew study, the Pew study, which said -- which was subtitled vendor choice matters. Incredibly important slogan for us because the conclusion of their big objective study, and in case you don't know, Pew is the big organization -- U.S. organization into opinion research and for opinion research to charity, opinion research and methodology. And they said there were 11 samples. One was head and shoulders above the rest, one was truly representative, the others weren't. The correct sample was i, sample i. That really irritated us because if we didn't know that we were i, then it was an 11-to-1 chance that we weren't any good.

So we prevailed upon them to reveal that i was indeed the YouGov sample. So it's very easy for us, especially in America, where Pew is very well known. Say, look, Pew has basically said we're the best sample. And here's why, in lots of detail. And that makes people know that the data they're getting is good. So it supports the next bit of the -- the next thing that we say, the next bit of mantra. And there was also recently a big article in the New York Times about Internet and leading into the big -- the start of the election cycle -- the hotting up of the election cycle. They were looking at polling and saying, what about the Internet polls? Actually, some of them been really good and then very specifically saying YouGov is the one. It has an average of 2% better from its survivals from the next best in terms of accuracy, average accuracy, average distance from the final result.

So we put these 2 things together, we can say, look, it's really clear we're the best panel, and we produce the best data. So it's something that we need marketing now to get across better, and we're putting -- we're investing quite a lot in marketing, especially systems that fit with our data. So our websites are becoming more and more marketing sites for us, lead generation sites.

So best panel, best data, best tools. Tools, of course, is Crunch. It's direct. It's MRP, which is an analytics tool and so forth. And we can easily evidence all of these things with -- not only with arguments and illustrations, but third-party endorsements for that.

What is the vision? Well, we have a vast continuous single source of data collection, that is -- and it all comes together in the Cube, analyzable through Crunch and activated through Direct. That is the sort of quickie way of saying, what are we actually doing. We're collecting data on lots and lots of people. We're organizing it in a way that nobody else does, connecting it. Everything is connected through the single source of our panel, and then we have a great way of -- literally, the most advanced way of crunching that data. You've heard us talk about Crunch before. It's still very much a work in progress. There's a long, long way to go on Crunch. But right now, it allows you in milliseconds to do what you normally need a Ph. D. to program and wait 8 hours. It allows you to explore big data sets very, very fast.

YouGov Direct, we'll hear more about shortly. So syndicated data, research services built on top of that, MRP being used to get greater accuracy at detail, Crunch to do fast and clever analysis of all of that stuff, Direct to activate it in -- as we'll see, in the real world, customization to let you build big tracking projects for the big companies all over the world because syndicated data is great, but of course, every company has its own products and wants information about its own products. We've been leaving that to the other guys to do. Increasingly, we can do that, and we can do that by connecting it to our data. So that customization means customization of -- on top of the syndicated data. And then targeting an activation, which I'll talk about in a moment.

It's a universal platform. That's probably what we'll start calling it more than the Screen. But as a universal platform, all the pieces being brought together in a single dashboard. That is the idea that we're moving closer and closer to. There's no big bang to this.

We're not going to suddenly announce here it is, because all the pieces would exist. Some of them are connected better than others, and that's just going to get better and better. And then 3 pillars, and we are seeing, I was looking for the pillars. First, of course, we have a bird's eye view of the pillar looking down on these 3 pillars. Data Integration, talk about all these things, amid public data and Ethical Activation.

So Data Integration means bringing all this stuff together. It means connecting the different types of data and uses of our data and creating more value by connecting them. Again, I'll describe that in a moment when we come to Self-Serve and Direct. Customization for clients. I will describe that building custom -- big custom trackers on top of the benefits you get from lots of existing data, as one of our new big clients said to me 2 days ago -- sorry, last week, Thursday, said, I just realized that every single thing that I ever do in a company, I've got starting data in profiles. And that's exactly really what we're trying to get across to our clients. It doesn't matter what you do, we already know a huge amount about you and about your market. And so everything is built on top of that data.

We're investing in our technology to facilitate this integration. So our websites are becoming more connected, that is to say our websites are containing data from the Cube, and you can start playing with that. We've had a little bit of that in ratings. We're about to launch, in the next month, a light touch -- a taste, if you like, of our data and being able to play with that data on the freemium model, where you can look up your brand, find out something about it, and then if you want to sign up, you get a little bit more. So we know who you are. We've developed a lead. And then if you want to get a bit more data, you pay a subscription. And by now, you are actually a client, and you're using our data, and you want -- we think, you want more and more. And so we send you someone to sell you the whole shebang.

So websites, apps, interfaces and dashboards. We're continuing with the development of Crunch into what we call 3D, 3-dimensional Crunch. So crunch at the moment looks at a square, which is to say, it takes all the data that's come in now and analyzes that. We want it to be able to analyze time series with data visualizations in a way that says, oh, my brand is changing, how is everything else in the world changing alongside that? And which parts of it are relevant and which aren't? That's 3D Crunch.

It will take a while. Nobody has this. You can't buy this anywhere. You can't get anyone to program this for you. This doesn't exist at complexity, it exists in very times here, but not in complexity.

And we can now connect tracking data from social media listening as well. Sunny mentioned YouGov Signal. YouGov Signal, indeed Crunch scrapes lots of data that's out there, more than anybody else. I mean everybody does Twitter. Most people do Facebook. We add Instagram, we do Wikipedia, it was first developed for Hollywood studios. The buzz actually starts quite strongly in Wikipedia because pages are created and then people add and read those pages. Reddit and a variety of others platforms, which I don't recall now, it has more data than anybody else. Our panel on those social media sites, so we can track our panelists. And through that, YouGov Signal is able to impute demographics for everybody on the web. Obviously, that is sometimes -- where there's a lot of data, we can impute it pretty well, and where there's not a lot, it's less good.

But that's, I think, a unique feature of connecting our data with social media data.

Public data is essentially, yes, what we give to people, what we give for free, and this is one of the reasons -- what is the reason actually why we're well-known because especially at election times, but lots of other times, we get a lot of you are visiting the website. And we're going to increase the amount of data we make available and increase the value of it by adding some other tools. And of course in doing so, we advertise to everybody the things that -- the kind of data we have and the tools you can buy because you'll always be asked to go to the next stage and subscribe to something, it'll be a lead-generation tool as well.

You have ratings, is an important part of that. So it's an extension of people are looking at politics more than anything. That's our single biggest thing that people come to our site to look at, but ratings has increased in the U.S., it's increased by tenfold, the amount of site visitors we get. Ratings are picked up by various people. And when Trump came here -- this is political, when Trump came to visit, some lobby group projected YouGov Ratings slides for Obama and Trump onto the House of Parliament, and comparing their different ratings. That's one particularly large use of that to welcome Trump. But it's also curated by Google in a lot of things, when you look up the popularity of something, you'll see curated YouGov Ratings card. And it is a good way for us to get a lot more visitors looking at things other than politics because most of the things on ratings are in entertainment, sports and consumer.

Yes, that's just a tenfold increase in visits. YouGov Daily is a daily short survey, which I think will become -- in elections, will become more and more visible because that's when you tend to want very, very quick reaction. Again, using the app that we've built for YouGov and YouGov Direct, we'll be able to get answers actually in minutes. I'm not sure we'll do it that fast because we're practicing. It will probably take a little bit longer, but it is as near to instantaneous as you can get and high quality. It's easier to get things instantaneously. It's not easy to get instantaneous and predictive perfect samples.

Our future plans include a lot more trackers in the daily polling part as well with social and cultural trends, not just political, and tools for the public to explore that data.

Then we move to Ethical Activation. This is -- activation is the process of using data to create targetable audiences for online advertisers and delivering marketing to them. I'll show you that in a moment. That is a narrow and the main sort of industry use of the word activation. So when you take data and you use that to create targeted campaigns. Our YouGov audience data proposition seeds audiences and does -- uses look-alike modeling to assist clients to do activation and it's highly GDPR-compliant.

We'll show you -- I'll show you quickly how this works. So first of all, this is the sort of narrow case of just normal activation as is understood by the industry. We create seed audiences, using profiles or other YouGov data. So you might say, okay, I've decided I'm going to use -- I've got my collateral, I want -- who likes this, who's going to buy this, I find out which audience is most interested in the offer that I've got using some sort of Custom Research with our panelists to say, who is responding to this offer. And that tells you -- YouGov Profiles tool tells you who that target audience is.

You now take that seed audience and you compare it to the audiences that a partner audience activation platform has, which is, of course, is tens or hundreds of millions of people, and they follow them with cookies and so on. And our guys, our audiences also have cookies, and they compare them and they create look-alike modeling for that. And they then, without modeling, they remove our audience from that. So our audience doesn't get the -- they can't target our audience. They can't send ads to our audiences, that is to say our panelists, but everyone who's left is then targeted by those ad-targeting platforms.

Now at the moment, our bit is totally GDPR-compliant because we have total opt-in for those. More than one opt-in. We already have the first opt-in, when you join the panel, you know you're using -- you're giving us data to be used in various products. We specifically have gone back to panelists to say, this is what we do with your data. Are you happy for that? Are you not happy for that? That's in a survey, and nearly everybody is happy, and if they're not, then we know that, we don't use it for that. Most importantly, with YouGov Direct, which we'll be talking about in a second, there's a third where you, very actively, you actually put your data up for sale for this purpose.

So that's highly GDPR-compliant. When I talk about cookies and all that stuff, that's stuff, that -- how the agencies do it is coming under huge scrutiny. It's been acceptable to the regulation until recently. The regulators have said it's not going to last much longer, guys. That is to say there's a few months left in that for what they do, not what we do. What they do comes under scrutiny to be compliant. And obviously, we'll work with people who are being compliant, and our bit will always be super compliant anyway. And I think the whole industry will see what they do. I mean, we don't have any control over that. But I'm sure -- there's been very stiff fines now. I'm sure that's going to become a big part of the whole advertising story.

And then the Ethical Activation of YouGov Direct. So YouGov Direct does something that is more than simply create seed audiences. It allows you actually to talk to our panelists directly. It is, on the one hand, a self-service tool. It's going to be a very sophisticated self-service tool. There are plenty of self-service tools out there. If you want to buy sample and run your surveys to them, there are people who'll supply that.

The difference with the YouGov one is twofold. First, the level of detail of targeting data that you have, the samples you can create, will be very, very specific. So people who are interested in jewelry, who like buying jewelry, you can specifically target. And there are hundreds of variables that we can use for that to create very, very specific audiences who have, as I will repeat 15 times, who have individually decided that their data should be used for the purpose of targeting them.

So it's -- YouGov Direct is about this. This is why you get onto YouGov Direct. We call it -- we call members of it members because they've really joined a platform which gives them benefits from their data. When -- with YouGov Direct, they make their opinions and behavior data available for in-depth, targetable research and in a marketing context, they actually can switch on and off which data they want to put up for sale. It's a very simple dashboard at the moment, where it is just on or off for each different bit of data. But they can, in subsequent versions, they will be able to set the exact settings down to these kinds of companies can use it and these kinds can't. And one day, not yet, we can make it the proper market and say, here's the price level that I expect for it or whatever. But that's maybe way off. The data can be used because it's GDPR-compliant and the security and accountability of all these permissions is highly visible.

So although I doubt that very many people of the 15,000 that are currently on the U.K. YouGov Direct app and available for use, I'm not sure how many of them ever look at the blockchain, but they can look at their receipt in the blockchain on that app to see what data was used, for what purpose, and when and so forth.

So if anything happens, goes wrong, they have a way of going back to say, okay, this data was used. How did they get it? When was that sold by me? Oh, I see, it was or it wasn't. Of course, if it's from us, it won't be and it wasn't, but it makes everybody accountable in the process.

So progress so far. The first pilot was in May 2019. It was very successful, everything worked beautifully. A commercial version of the app has since been developed. We have 7 partner clients who are -- we haven't actually got to charging them yet. They're not client -- they are clients of ours, but they're using this with us to test it. And those include an ad platform, a newspaper, a major agency, a phone manufacturer, a Hollywood studio, a big charity and a TV broadcaster. And it's working really well.

They're getting great results. We're building up case studies. What happens when you use it, is you get a -- I don't know if you can read that, you probably can't. You get an invitation, it says, okay, you've got an invitation or a message or whatever it might be. Actually it's very hard to read that. I'm sorry. Maybe in your bundles it was probably easier to read. It then says, not going to read that either. But these are all of the invitations waiting for you. There's a daily invitation for a daily survey that doesn't pay, by the way, just to keep up engagement. So every single day they get 3 questions about news issues for fun and the results of that straight away. The -- and it looks like a normal survey, right. You get some questions. In this case, this is teeing you up for the video you're about to see. So it's saying -- this was done actually in the very first alpha test before Christmas, have you done any Christmas shopping yet and so forth, just so they're thinking about creating a context of what happens. They then watch typically a 30-second, it could be up to a 90-second advert, a trailer, whatever it might be. Afterwards, they get a question that says how much do you expect to spend or whatever. It can be what did you like about this ad, did you notice something in the ad, are you likely to buy this, or whatever it might be. And then uniquely, this is something you cannot do in any normal research context, but we're not in a research context here, we're explicitly in a market and marketing testing context, marketing context. That's a link through to John Lewis at the end, that they could have gone to, to respond to what was in the ad. So it gives you a real ability to see, does somebody actually go and buy. In one case, we had a movie trailer, and 6% of those that saw the trailer went on to actually buy tickets for the movie. That's -- it's an extraordinary result.

At the moment, this is the format that we're trying -- that we're using, trying -- that we're using, which allows you to do research but also market testing of ideas and to in fact, lead people on to downloading vouchers that they can use in your store or whatever it is that you might want to do.

We've most recently had a very exciting experiment. We -- using the PSD2, which you all know is the payment system directive number 2 from the EU, which is the open banking directive, which is to allow you to use your banking data more easily. And as a consequence of this enlightened bit of regulation, we had -- we offered people -- to a small group of people, 750, to give us access to their bank accounts in return for a payment. And 30% of them said yes. So actually, 250 -- just under 250 we ended up with. We have live access to their bank accounts, where we can see what they're spending on credit cards and so forth. It sounds a bit spooky when you -- until you realize this is extremely -- again, extremely explicit. They know what they're doing. The directive from the EU is precisely to allow people to get access to their data, after all the bank has it, their live banking data. They can see it, I guess when they look at the app, but they can't use it. They want -- the EU wants people to be able to use their banking data to get better offers, to switch to other companies, to change suppliers or whatever it is. So we are using this precisely what it's intentioned for. This isn't something that we're doing as a sort of side consequence of something. This is what it's meant to be for. And we will see how people respond to it later. I mean this is a test group and as I said, it's very explicit. And so this is the kind of data that we can mix with other data. There are all sorts of people that have banking data -- to have granular banking data linked with other bits of data that people have permissioned, that I think is unique.

We have long term -- sorry, that's really -- we can talk about that in a moment, more about that, I'm sure you all have some questions. Long-term growth targets, this is the final bit. We are now very stuck on these 5-year plans. Well, a second one anyway, I don't know, can't predict beyond that. But we do think that the ambition that we have can best be realized by being very explicit about where we're going and setting ourselves very explicit, difficult targets. It was because we did this 5 years ago, that it forced us to do lots of uncomfortable things. All that story about stopping Custom Research that wasn't profitable, that's extremely hard to do because the company is real people with jobs. And to say to researchers, you're not going to do this anymore, you're going to do this. We didn't sack anybody as a result of this, we allowed them to come across, it -- there wasn't that kind of thing. But forcing people because they -- you're not going to do what you want to do, you have to do this because that doesn't work and this does is really hard to do in a company. And we were determined to meet our targets and to fulfill the plan. And it made us do all the things that are uncomfortable. And this is going to happen again. This is -- we're going to have to do lots of uncomfortable things for us. We're going to have to force people to switch some of their assumptions about how to do research and so forth to meet these very tough targets. To double group revenue over the next 4 years. To also double the profit margin, which doesn't require huge mathematical ability to say that's a quadrupling of the profit, which is -- if it's smooth and it won't be smooth across the 4 years, it's annual compound rate above 30%. We think we can do this because until now we have been reasonably well aligned and reasonably focused on our market. I say reasonably, I qualify it, because we're still doing lots of things which we -- that are not optimal. We're still not connecting our data as well as we could. We're definitely not marketing ourselves as well as we could. Our marketing still is more about things coming to us rather than us being systematic in our sales and marketing around our differentiating factors. There's lots and lots of things that we can do better. You need to go from being reasonably good at the things we do to being really fantastically good at them, that means focusing very hard, doing things that people don't want to do, but which will get us to this very big target because we do intend to be #1 in what we do, which is syndicated data and the activation of data in the way that you've seen.

The group outlook. We have a strong pipeline of sales opportunities for our syndicated data products, there's no diminution there. And we are tooling up extensively in terms of salespeople and marketing as well as the online marketing platforms that I've mentioned, that is to say the public data that leads you further and further into our systems. There are continued opportunities for growth in the syndicated, aligned Custom Research. We have -- as you know, we do a lot of big trackers, especially in Silicon Valley. We're reaching out now and winning some big contracts in other parts of the world, in the same area, in the same type of work. We're continuing to invest in technology and geographic expansion. We want to be in 40 countries, 50 countries, and we're not putting a number on it for a particular moment in time. But we need to be able to service our major tracking clients to get those really big contracts. We continue to invest in technology as well, lots more of that to come. Lots of opportunities for YouGov Direct in the digital advertising ecosystem but also in self-service. The more people can do things for themselves at high quality the better. That's what people want to do. It's a bit ahead of the curve. Still most people don't, but increasingly they do. We've seen -- sorry, as you've seen, as I've mentioned, the first module from the so-called YouGov Screen or the YouGov system is launching within 4 weeks. Brexit, everybody wants to argue about that -- talk about that, argue about it, talk about it. You can't talk about it without arguing. Well, we are cushioned from Brexit by volatility I think because of the spread of our revenues. And indeed, obviously, this increased research that can come from it as well.

Trading for the current financial year is in line with the Board's expectations. And we think that the new targets are very ambitious, difficult but we will achieve them. That's it. Thanks.

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Questions and Answers

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Fiona Catherine Orford-Williams, Edison Investment Research Limited - Director & Sector Head Media [1]

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It's Fiona from Edison. Can we talk a little bit more on the client side about how much the growth came from new business and how much has come from the up-selling and cross-selling to the key accounts? And further to that, about where you are with the key account management teams, whether you're recruiting in or using internal resource? And secondly, in terms of these big global trackers that you're talking about being ambitious to gain more of, is there a sacrifice on the achievable margin given the scale of these projects?

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [2]

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So I'll hand it to Sunny for some of that and Alex probably have something to add as well. But just to talk about the very last thing, the big trackers do require teams or support. I don't want to say large teams, small teams to do things with the data, to customize them for the people that -- for the client. But Crunch is the game changer here. You used to have to have massive teams to do these because when you do a monthly survey in 40 countries, sometimes with mixed methodologies because you will end up doing something by telephone and something by Internet, with us possibly none or only a little bit by telephone. There's one project that we have that would -- which I can think of which will have some telephone. There's a lot of work to do making that data, cleaning that data and making it fit together and presenting it in a way that people can use. Crunch processes it all by itself. That huge thing where you used to have levels of, literally floors of TNS or whatever have -- and they still do, I'm sure, doing the data cleaning, we really don't need that. And our first big client for this, and you were involved in that Alex, bought Crunch precisely so they could stop -- get rid of that team, right. So what you're talking about is large teams of people. No, we don't need large teams of people. We need a small dedicated team of people who do a few little things, but it's basically coming off the system. And we have -- you talk about new clients and old clients. We have 3,000 clients. So the worst thing, the thing that we're really bad at is cross-selling. One of the changes that we've made, I mean there are 2 things in the structure that we're doing, is -- one of the things I discovered going around to see clients is that most of our clients who love us love the one thing they do with us and don't even know about the other stuff. Why is that? Sort of dirty linen and all that. But we're organized in different teams. No team wants its client to be seen by another division because they think probably wrongly -- well, I think definitely wrongly, and they may stop doing the work (inaudible) do it with them. So the thing that's happened on August 1 technically, although it'll take a year to put into place properly, is that all of the service, so all the clients belong to 1 person, 1 -- the Head of Client Service, that is to say 1 P&L. So the people in it have no P&L to protect. In fact, they maximize by doing the opposite of what they've been doing. Our internal mantra for this is breaking down the silos, it is to get cross-selling big. If we did nothing other than cross-sell to our 3,000 clients, we'd have a huge upside. But we are winning new clients too. Sorry. So I'll go to Sunny first and then, Alex, why don't you just talk (inaudible).

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Alexander George McIntosh, YouGov plc - CFO & Executive Director [3]

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I'll cut in first. Yes, the majority of our growth does come from existing clients. That's kind of -- needs a little bit more explanation. Because we've got a variety of ways into YouGov, quite often you get a client who comes in, could be a very large client, but they can come in starting to spend small, and that happens often in research. People just don't give you a large amount of money straightaway, you have to build up credibility. So what we're typically very good at is somebody comes in, tests us for a little bit and then we just grow that account. Now obviously, on the data product side, that's coming from new clients or we're cross-selling new countries into our existing clients. So there's a little bit of a mix there. Just echo Stephan's point, this is where what we do well at in terms of landing a client and then bringing them up to a decent amount of spend. When we look at their budgets and our proportion of how much goes to YouGov versus our competitive set, now there's a lot more space for us to grow there. If we had a sort of next-level account management structure that was in place in order to sort of take sort of bigger contracts off them, take more multi-country work, this base would just be more coordinated. And on the sort of new sell side, we continue to think there's just a lot more opportunity for us to keep professionalizing ourselves and to step into the -- echoing a lot of what Stephan said, marketing ourselves better and actually driving more pipeline from a universe of clients we haven't already been talking to or building awareness within clients who know us for one thing, but really should be considering us for a variety of other products and services, we've got a massive opportunity there as well.

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [4]

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Do you have anything?

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Sundip Singh Chahal, YouGov plc - COO & Executive Director [5]

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I was just going to say, we've actually been through the exercise where we've identified what we think are global key accounts. So that was actually done by the senior management team in Berlin in July. The next stage of that is actually, we've already identified some of the individuals from the existing teams. So the existing team for new sales, client service and research, who we believe are already actually account managers or key account managers. Because [actioning the client form in] research who's managing to put your (inaudible) that client, for example, he's actually or she's actually acting as the account manager on that client. So we've got to identify those individuals. We're now going through the process of deciding which are key accounts based by location or which are actually based by sector. And we will be actually filling some of those positions with internal candidates, the ones we haven't already identified. So people are obviously encouraged to apply. And also actually be going out into the market as well.

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Paul David Richards, Dowgate Capital Stockbrokers Limited - Executive Director & Head of Research [6]

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Paul Richards from Dowgate. Three questions. In terms of having the best panel, is there an optimum panel size that you target per country? Second question is, obviously first-party data has become a hot industry topic, particularly of late. To what extent do you feel that your data can be fused with client's own data set and then integrated into their work plan? And then finally, the -- well, congratulations on the achievement for the first 5-year plan, an incredible achievement. But the second 5-year plan, do you anticipate that, that is something that will be achieved organically or with a few bolt-ons? Or in terms of the way that that's structured, if there were a more substantial transaction, would the targets be restated from that?

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [7]

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On the last question first, I mean we have a long way -- we have 3 vectors for this, one is to do better the things that we haven't done well enough. So I've mentioned the reorganization of sales and marketing. The second is new products, new technologies, YouGov Direct being the most obvious one of those. And the third is the geographic expansion. We've had very good success with Galaxy and with the geographic one and the sector one with SMG, and we'll be looking to do more of those if we can find them. We are -- we've been slow to do some of this. One of the dangers of saying you'll be looking to buy things, and this is a massive danger, and I've been through this in the first half of our development. You look for things and you start to -- you look at them with rose-tinted spectacles. You're out to buy, therefore, everything look groovy and it turns out to be horrible most of the time. So the reason -- we have actually been trying. And we will -- and as I say, I've mentioned some small acquisitions that have done very well for us. But we are going to be very conservative and very critical in looking at these because we can't afford some of the accidents we had back in 2005 and '06 and '07 and those periods. So yes, I think by doing smaller and very clear concept of what they're adding us, we can do well there. The first party -- and Alex may have more to say on that. The first-party data, it's -- any kind of data merging is really hard, and people do it badly and ineffectively. Again, and you'll hear me saying this a lot, these are repetitive things. You know I'm going to say, that is a task for Crunch, that is something that Crunch is supposed to address. Its whole structure is about taking different kinds of data and making them mergeable. Certainly, putting 2 types of data alongside each other is a relatively straightforward task, such as your advertising or your marketing spend compared to your BrandIndex number. But to go beyond that, we can often locate our analysts inside customers, obviously of those -- the customers of our clients. And with YouGov Direct it'll be possible to take that a step further and to actually follow them inside the company's data. So yes, we're interested in that. But it's very hard to predict when that'll come back. And I can't remember the first one, sorry, I'm...

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Alexander George McIntosh, YouGov plc - CFO & Executive Director [8]

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Best panel.

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [9]

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Best panel.

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Alexander George McIntosh, YouGov plc - CFO & Executive Director [10]

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So the panel size. So really it's a balancing act. It really depends on the market and it depends on the work that we have for that particular panel. So in the U.K., we're relatively abreast in terms of the work we're able to run off the panel. And so what we never want in any particular market is redundant panelists because we have to keep them engaged. They're coming and they're joining YouGov because they expect varied and exciting surveys to do. And so if we're just running profiling surveys, that's not good enough for us. So it's always a balancing act. We don't want to over recruit if we don't have the work because essentially, those panelists become irrelevant.

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Paul David Richards, Dowgate Capital Stockbrokers Limited - Executive Director & Head of Research [11]

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So there is an optimal size?

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Alexander George McIntosh, YouGov plc - CFO & Executive Director [12]

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Yes.

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Sean Thapar, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [13]

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It's Sean from Berenberg. I guess just one kind of broad question on competition. I guess as you guys are growing so significantly, you're coming up into the radar of the big guns in the industry. Nielsen, they've launched their own kind of sports band tool yesterday. Just kind of a word on relative kind of threats that you see. Do you think that the big guys can replicate and conceal this opportunity that you have for these products by not launching a like-for-like product, but just kind of replicating the offering in any way? And -- but also related to that, I guess you're not massively in big areas of where the market is, within retail for instance, for Kantar or TV ratings for Nielsen. On the opposite side, where are the opportunities, I guess to start addressing bigger pieces of the overall industry?

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [14]

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So in the case of sports, I mean we are #2 in sports, believe it or not, and Nielsen is #1. And we've been certainly growing relative to them. I haven't seen their product, but it sounds a lot like our product, as you rightly say. You need good panel to do that because you're looking at a section of your panel, a subsection of your panel. We think we have the best panel. By best panel, by the way, and we will be -- try to work with the industry to get better definitions of panel in the future because I don't think they're actually adequate analysis purposes. We use a number that is an industry standard number. If you wanted to know how many recontacts you're capable of from any of the panels you might look at, you'll find that number is very different to the number that is suggested, implied. To do proper audience research the way we can, we need high recontact rates. If we want to recontact from one wave to another, we can get 80%, not we can, that's what we expect. 80% recontact rate for a recontact study, that's exceptionally high. That's what allows you to create connected data. If you don't do that you cannot get truly connected data. In other words, you -- so that one -- you got the data in one survey and that's all connected because it's all in that survey. You can do another one and you only have 20% recontact rate, which are -- which is typical in the industry when they're trying, you don't have much over that. So it depends on -- we're always going to sell ourselves on the quality. It is absolutely possible to make cheap imitations of what we do. There are several companies that specifically have gone out to do that. Of course, they make some sales. They're not obviously hurting our growth, but we have to be highly aware of that. So Alex, you can go into a little bit more.

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Alexander George McIntosh, YouGov plc - CFO & Executive Director [15]

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Right. I guess directed to the Nielsen thing. That's a good example of the marketing, what we see as an opportunity because we actually came out on exactly the same day with our version of that, which is global [client] index. But clearly, the Nielsen marketing machine is just more effective within that particular space. Obviously, if it was politics, we would outgun them. That piece around really trying to systematize our marketing so that we can get the proper messages into the right audience is something that we're obviously still sort of investing in and developing. But then sort of when we talk to people within the industry, it is the quality of the product. So you can make a lot of noise, but fundamentally when people start using it, unless you can deliver, you'll get a lot of people who have been disappointed by some of the competitive products that they've been buying. And it really comes back to that point on, you can't just have a cheap imitation. Having connectivity behind it that then extends the utility of that product into the other things that you want to do because clients want to buy sort of solutions sets, that's the part where in the long term, you'll win out.

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [16]

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I mean with products, you can -- I'll come back to you. With products, you can try them out, right, that's the thing. And the product -- quality product of the product does come out. So we've always banked on that, that people who use us and see the data can realize it's much better than anybody else's, which is why we're going to be giving away more of that first level data. You might remember, we did it long time ago with Profiles Lite, which actually taught the -- certainly in the U.K., the market that we were not just politics, but we were all these other things. So we think the product itself is the best way to combat that, so.

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Bridie Anne Barrett Schmidt, Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst [17]

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Bridie from Stifel. I just wanted to come back to your comments on GDPR. And I mean from -- if I'm reading you correctly, you seem to think actually we've not yet seen the fallout from the tightening of the regulations there. So I guess 2 questions. Built into your targets, do you anticipate within that, is there some sort of GDPR market share shift towards year-end completed within those targets? And where do you see [do you] like the low-hanging fruit of where you can take the share? (inaudible) whiter than white mentality.

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [18]

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Yes. Well, it's very hard to predict how that will go because it's such a controversial area. It only applies to Europe at the moment. Will everybody else adopt it? I think they will, actually. But it's hard for me to say just where that will go and how the platforms will adapt to it. What we do know is that it puts a lot of pressure on them and that we are clearly highly compliant, and that it should give us some advantage. But we're not banking on that in anything that you're seeing here. In fact, when we think about YouGov Direct, we think about it as an extension of our data and what we already do as a self-service platform as an ability to get more out of the data we already have. We are clearly hopeful and ambitious about the area of broadening that and becoming an important piece of the infrastructure with regard to commissioning. But it's very hard for us to make a prediction about what will happen. I mean there are very big forces here. And we're not placing ourselves in -- we're not a Silicon Valley start-up that's sort of going (inaudible) after something and may or may not win, right. We play that somewhat carefully because they are also our clients. We're not -- we don't want to be their rivals. So it's very hard to talk about how this will play -- how that part of it will play out. I mean we know that we will be a useful part of it because through us, you can actually increase your compliance. The others can increase their compliance by using us. So it's -- it ought to play well for us. But I don't want to say what that could lead to, because we really don't know.

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Jessica Pok, Peel Hunt LLP, Research Division - Analyst [19]

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It's Jessica Pok from Peel Hunt. Just 3 questions, please. Firstly, on the general trading, Mainland Europe is doing very well. Could you give a bit more color at what's been changed there to see the improvements? Secondly, YouGov Signals, just to properly understand, are you using that just to get sentiment from the current panel for the broader population? And then it's the broader population, I know you've mentioned that and they're using it for the film and TV studios. Is there an offering right now that [you've got] for the rest of the YouGov products?

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [20]

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I'll do Signal and then Sunny or Alex will do the...

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Sundip Singh Chahal, YouGov plc - COO & Executive Director [21]

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The third question.

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Alexander George McIntosh, YouGov plc - CFO & Executive Director [22]

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There's a third question.

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [23]

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Oh, there's a third one. I'm sorry, I'm so sorry, please go on.

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Jessica Pok, Peel Hunt LLP, Research Division - Analyst [24]

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The third question is just on the ethical activation. I know obviously now you've got -- through the app, you can deliver trailers or advertising, et cetera. Have you had a use case where the client has actually used, [with] seeded the audience and then actually used it to go out to the wider public and been [cleared] to use it for targeted advertising? Or is that to come?

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [25]

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No. We've had a significant experiment in that area in the last thing you had mentioned. I can't tell you who, but a name -- a big name platform has done precisely that. So we were able to find a large number of people on our -- from our direct audience, who are their audience. And they were able to connect with their permission. Again, very explicit, they were getting paid to say, we are going to transfer -- we would like to transfer this data to them for this use, and that was permissioned individually. And as you know, accounted for in the blockchain and that was then used to create much bigger audiences in their own system. So yes, and with good success. The -- this is -- some of these things we can't -- they're client projects and so we can't talk about that. The second on Signal is easy to answer. It existed before being connected to us. So it is all about passive data -- sorry, collection of data that's been produced elsewhere. That is to say, the feeds you get from Twitter and so forth. And then we can connect it with our panelists to then impute demographics to the other -- to the non-panelists. And that was done for media audiences, for movie audiences that was what it was originally designed for. But it is now being used for brands. It's exactly the same process for brands or for anything that you put in, any search term, it always has to be customized, right, because you need to teach it to look for various words that are around. You don't just look for the name of the movie or for the name of the brand, you look for other words that connect with it to help you identify that they really mean that brand. So there's a bit of customization for that, and it can be used for anything that you search.

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Jessica Pok, Peel Hunt LLP, Research Division - Analyst [26]

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Is that part of the BrandIndex offering? Or is that separate? You have to pay extra for it or...

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [27]

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No, it's a separate piece. You -- I mean it can be bundled up, but it's a separate piece. Yes. Yes, you want to talk about the first one?

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Sundip Singh Chahal, YouGov plc - COO & Executive Director [28]

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Yes, so -- and Alex might have something to add as well. But in terms of Mainland Europe, so I think there's number of factors at play. There's certainly a network effect. So as the group has got larger and as we've become stronger in America, being strong in America means that we're able to sell more subscriptions for our products in other markets into those markets, if that makes sense. So we have international client sat in America who buy subscriptions across Mainland Europe. So the revenues sat in the U.S. and also sat locally as well. Also those markets as well. So we've got a couple of organic startups in the year as well, so that was last year, which was Spain and Italy. And also our original organic startup brand has been a strong performer. So that's also being happening. And then also as we've touched upon a couple of times, we've actually taken out some of the lower-margin custom and a big beneficiary of that was actually in the Nordics. And so there's a few things going on there at the same time, which led to a decent performance in Mainland Europe.

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [29]

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That's it.

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Ian Richard Whittaker, Liberum Capital Limited, Research Division - Head of European Media Research [30]

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It's Ian Whittaker from Liberum. Three questions. Just in terms of again, coming back to the cross-selling opportunity, from what you can identify in terms of the modeling, could you get to that doubling of the revenue target from sort of just increased cross-selling? And I guess sort of behind that question is when you look at the cross-selling opportunities and you talked, there's a lot of money you're leaving on the table. Is that something you know for a fact in terms of what you know from your clients? Is it more sort of aspiration? Is it more that you think you can sell these products that they don't think they know about? So a bit more detail on that, please. Second of all, just -- and sort of linked in with that, just in terms of the doubling of the margin. Can you just sort of explain, if you do cross-sell more of your products sort of in terms of the drop through rate, that we should expect those revenues? I mean presumably, we would expect those revenues to be high margin, obviously depending on what we were. But when you have new clients, you obviously have a startup cost that you wouldn't necessarily have with your existing clients. And the third question is just in terms of what you -- sort of the general sort of business that you do. So that's been touched on before, you have very, very good performance, even though when you look to the economies, sort of underlying weakness. And you're seeing this in some of the sort of advertising groups as well. Do you think that's an argument for saying in terms of the field in which you operate is becoming less cyclical? Yes, in terms of this that maybe actually the advertisers are seeing more as a sort of strategic strictly important spending and therefore, thinking less and less that you cut the spending in the downturn?

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [31]

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Well, on the last point, the -- it may be the case. I mean I think we perhaps see some of that. But our performance is very high compared to our competitors. So I think these are just the effects of what's happening to the industry. The industry is pretty flat. And what is the average -- what is the official numbers?

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Alexander George McIntosh, YouGov plc - CFO & Executive Director [32]

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Around 3%. Just over 3%.

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [33]

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3% growth. And obviously, we've massively outperformed that. So I don't think you can put that down to industry effects. Our performance after that is no -- there's a tiny bit of that. But the first point about cross selling, of course it's easy to exaggerate it. I mean the reason that somebody buys something from you is because they have a perceived need for that and they may have not perceived the need for something else and actually don't have that need. The people doing tracking of their reputation are interested in your brand trackers and those people may have a great supply already for something else. It doesn't follow that if only we'd know about it, we would've bought that, it would -- that would be a big fantasy of mine that presents those kinds of opportunities. So if you have 3,000 clients, you've got a very, very big base to do some cross-selling from. And I think it could -- it would be substantially better if we could make use of that, but it's not enough. Obviously, it would be enough if they all bought all our products, but it -- that's unthinkable, right. So we haven't -- I don't think we've modeled it in that regard. On the second point, more one for Alex I think.

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Alexander George McIntosh, YouGov plc - CFO & Executive Director [34]

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Leaving money on the table, is that the one?

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [35]

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Yes.

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Ian Richard Whittaker, Liberum Capital Limited, Research Division - Head of European Media Research [36]

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Yes. Had to do with the margin for cross-selling. Is the margin naturally higher, the drop through rate?

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Alexander George McIntosh, YouGov plc - CFO & Executive Director [37]

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So in a traditional market research model, yes, that's true because if you win a big tracking piece, typically you have to invest in more headcount, during the investment process a lot of -- particularly at the back end, the data processing part of that, of the production line that requires more headcount. Figure for selling subscription products, where we don't have to add anything to, the drop-through is very high. A big part of the first 5-year plan was really focusing, anything that we do needs to be on strategy, needs to be selling sample which is on our panel, where we capture a lot of margin and obviously, using our technology systems. For the most part, as long as we can continue keeping it within that sphere and obviously, things we have to invest in are new countries and Sundip mentioned more as operational capacity. Obviously for a custom project, it won't all flow through, but we'd like to see the more work that we're going to get through will continue taking that margin up because capturing margin through high-volume numbers [obviously], the panel is what drives a lot of that margin. It isn't selling people's time. That's not our model where we're trying to sort of cost save and say, look, a consultant at this day rate is this, this, this. So we think the model of using technology -- using that technology to take out a lot of what traditionally is done by sort of labor, human process and also the platform accounts that we're -- that we have been developing allows you to automate a lot of this stuff. We just -- we won't -- we don't have the same operating model as a traditional market research company. So we won't be sucking as much costs upfront when we win some of these big contracts in the way that people traditionally would have had to have done. Now that's taken us years of investment to get to this point, that's obviously why we think in these long-term sort of cycles is so that the groundwork that we have been sort of putting into place over the last 3 or 4 years, we can now start to take benefit of that sort of going forward. But as I say, in order to continue expanding that, looking at geographic expansion is one of the critical things because these bigger plans that we're going for, we will -- we are targeting doing more multi-country work with them. And all of that is at a much higher sort of contract value.

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Sundip Singh Chahal, YouGov plc - COO & Executive Director [38]

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And just to pick up on the expression, because the expression we sometimes use, leaving money on the table. Sometimes we actually want to leave money on the table because the money we leave on the table is usually the lower margin, high consulting hours kind of work. And that was the whole model of Custom. So sometimes, we will leave it on the table, just -- yes.

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [39]

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Any more questions? Yes, Steve.

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Steven Craig Thomas Liechti, Numis Securities Limited, Research Division - Analyst [40]

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It's Steve Liechti from Numis. I guess I've just got 1 question or an observation. If you look at the last 5-year plan, really simplistic. So if you look at growth in the data products and services, I mean that really delivered the plan. I know different geographies and stuff like that, but it was getting the data product and services right. So if you look at your next 5-year plan, which one is going to super charge the performance and double your revenues and quadruple your profit here? Because it looks to me as though everything is just a bit doing what you're doing now, just a bit better rather than the game changer in this plan.

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Stephan Shakespeare, YouGov plc - Co-Founder, CEO & Executive Director [41]

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Well, a bit of it that we think could be a game changer is YouGov Direct. We have a sort of -- I always emphasize, and maybe I'm being too conservative here or low risk, that it's very much designed and we're going forward with it in a way that it should be a big -- make a big difference to us just as a front-end of the system. When I say just as a front-end to the system, this is where the way we've been looking at the business, taking stock, this is a big milestone for us. Yes, we're patting ourselves on the back for achieving something. But we're very much also in the state of mind of thinking, yes, we should have done, we could have done much better because the growth that you're talking about in BrandIndex and Profiles, I would say, this wouldn't die. But there's absolutely no question that, that data set is unrivaled in the industry. There is nothing like it. When a major ad platform says YouGov data is being used as one of its selling points when its own group has viable data, is telling you nobody in the industry who knows anything about what's inside this product and other products would ever think, would ever suggest to you that the other data is better. We have to look at Nielsen sports index or whatever it is compared to our sports index. So I can't tell that yet. But in terms of the main things that you're talking about, this is just the best thing. It's like that you wouldn't buy a cheap version of a Bloomberg screen, that's why we often compare ourselves to that, if you are in the industries in which the Bloomberg screen is critical, right. I mean there's nothing else to get then, I would think. I'm not -- I don't know enough about it to know that's true in all areas, right. But if you're a certain kind of trader, you're going to have a Bloomberg screen because you don't go for something that isn't as good as that or doesn't fulfill your needs as well. We are the best, we should be selling to everybody that is in there. And so there is a huge thing to be said about making our product more obvious, making it easier to use because it isn't that easy to use. It's what we talk about when we talk about data integration, that the data is integrated inside. But one of the reasons that some of these sort of sales you've been seeing recently of other kinds of company, the sort of Qualtrics type pieces, is they're incredibly well integrated with other peoples' systems. We're not, right. I mean to be clear, we don't do what Qualtrics does there. I'm not speaking of them as a rival to us. But obviously, there are other companies that do data that are -- that do that much better. And so for us, things like YouGov Direct, which essentially does make it easier to use, extends the value of the data, allows it to be much more visible because the dashboard for using it shows you all the data that's available and so on, these could make a very big difference to the products we already have that ought to be much bigger. But in the case of YouGov Direct, it's also allowing you to do things you couldn't do before. So I think it is a new -- significant new product. So I think there is a great deal forward in just becoming bigger. Remember, one of the things I say is that there are very few companies -- very few big global companies that use us as their #1 data supplier. That's because they wouldn't have considered us, right. They would have always gone to a Kantar, a GfK, Nielsen or whatever. We are starting to win those now. So that is a whole new field. And that's what Crunch and that's what the customized version of the syndicated data allows us to do. So these are different pictures for us to play on. It isn't just a little bit more of the same, I would argue.

And so I think we're just about done. Yes. Any last questions? Thank you very much, everyone.

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Alexander George McIntosh, YouGov plc - CFO & Executive Director [42]

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Thank you.

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Sundip Singh Chahal, YouGov plc - COO & Executive Director [43]

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Thank you.