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• The demand for intelligent data analysis continues to grow
• Smaller but stable physical goods store

There are thousands of companies that make money collecting and selling your data. Thanks to modern marketing technology, companies can analyze these and influence consumers through targeted online advertising.

Now YouGov (YOU) is preparing the launch of a product that will allow users to earn money for themselves with their personal information. The YouGov Safe tool distributes cash rewards in exchange for accessing certain online behavioral data, such as: B. the Netflix viewing history or the Amazon purchase history.

“It’s not one of those creepy things where someone sucks your data without your knowing it,” says managing director Stephan Shakespeare of the YouGov Safe product. However, this new level of access gives the company deeper insight into (anonymized) individual habits, which it can then relate to age and gender. “We now have available datasets that would never have been available before. In some cases, we even send them back to the people they ported the data from because we know more about them.”

So maybe creepy for those concerned about the broader trend towards mass harvesting of personal data. Encouraging to YouGov shareholders as this should make the company’s products smarter – although a 37 percent increase in adjusted pre-tax profit to £ 13.6m in the first half suggests that demand for its data analytics tools is already robust.

Overall, however, the first half wasn’t easy for YouGov. The combined effects of the planned closure of the Kurdistan store and the headwinds in foreign exchange resulted in sales increasing only 3 percent. Meanwhile, reported operating profit fell more than a fifth to £ 7.4 million, driven by higher stock-based payouts on some of its recent acquisitions. This was in addition to a company-wide change in the account management structure, which it claims has created the conditions for a busier second half of the year.

This is not intended to undermine progress made in the six months that ended in January. It has closed a number of major contracts in mainland Europe that will help meet the second objective of the Five Year Plan (“FYP2”), which aims to double both group sales.

With such rapidly evolving, advanced technology (or “martech” if you’re trending), it’s easy to assume that the demand for physical marketing products – think hoodies and notebooks – is almost out of date. But judging by the performance of The Pebble Group (PEBB) there may still be life in free promotional items.

The marketing group, whose largest business is in “branding”, saw cash profits plunge 50 percent last year as the pandemic affected its trading. However, management has spearheaded a strong rebound towards the end of the reporting period that continues into the first three months of fiscal 2021. The previous order book has already risen by around a third compared to the same level in 2019.

In response to the release of these results, stocks rose 3 percent – although investors were likely more excited about the numbers from the smaller software business Facilisgroup. The division gained 26 new customers in 2020 to a total of 175 and gained five new customers in the first three months of this year alone. Meanwhile, Gross Merchandise Value (GMV) rose a quarter last year to pass the $ 1 billion milestone.

The first e-commerce store solution will be launched next month. Without a doubt, the company will fall back on its rapidly growing customer base. Pebble Group must seize every opportunity that presents itself to meet its new goal of $ 50 million recurring revenue (ARR) by fiscal year 2024.

It’s ambitious, but within reach. The pandemic has slashed marketing budgets across the board for almost a year as management teams prioritized the smooth running of core businesses over discretionary spending. Now that the vaccines are rolled out, a recovery looks on the way. We don’t think the marketing spend will be the same – digital advertising tools are proving time and time again that they are more efficient than the old ways of generating direct sales. However, it still makes sense to establish a physical presence, especially for Pebble Group’s corporate customers who are using their products to drive employee engagement. Free stuff isn’t dead – although it will likely be downgraded to a minor role as martech takes center stage.

Broker Peel Hunt seems to share the same view. Analysts predict the Pebble Group’s adjusted earnings before tax and earnings per share will rise to £ 8.7m and 3.9p in 2021, compared to £ 7.6m and 2.8p in the Year 2020. This is slightly above the projected growth rate at YouGov, where adjusted profit before tax is expected to be £ 29m for the full year, compared to £ 25.7m last year. We stick with the purchase on both points.

Last IC view: Buy, 1060p, Jan 29, 2021

Last IC view: Buy, 105p, Jul 2, 2020