YouGov has reached a milestone in its plan to become a “true internet company”, as the market research group reported that full-year profits from data products had matched those from custom research.
Founded in the UK in 2000, YouGov has traditionally made money through one-off research projects involving conventional data collection – such as its political polls. But in recent years it has made big investments in scalable, higher-margin data products that can be sold to multiple clients.
The London-listed company reported that group revenue for the year to July rose 8 per cent to £67.4m, while net profits fell by almost 80 per cent to £417,000 after accounting for acquisitions and management restructuring.
Revenues from its data products and services division rose 30 per cent to £19.7m, while its custom research division grew just 1 per cent to £47.7m. Thanks to their rapid growth, data products now represent 29 per cent of group revenues, up from 24 per cent a year ago.
Data products are more profitable than custom research. Operating profit from data products reached £5.5m, hitting the same level as custom research for the first time.
After stripping out exceptional items, amortisation of intangibles, and central costs, YouGov operating profits increased 24 per cent to £7.4m.
Stephan Shakespeare, founder and chief executive, said that “what’s really getting us excited” is a new product that the company is set to launch in November called “Profiles”.
YouGov describes Profiles as a planning tool for brands and their agencies. It says it will bring together a wide range of data sets into a single tool to help marketers identify where to place their advertising and track the results.
“This is the first time that YouGov has a major product that goes into the heart of the work flow of any marketer,” Mr Shakespeare said.
Analysts at Numis said it saw “considerable opportunity” for Profiles, and predicted that in time it could deliver revenues of about £10m.
YouGov, which operates an online panel of 3m people worldwide, pioneered online data collection for market research when it was founded. To meet its definition of a “true internet company”, it wants to interact with panellists and clients through a single, online system. It also wants to collect and crunch as much data as possible in real time.
YouGov on Monday recommended increasing its dividend by 33 per cent to 0.8p per share.
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