System1 Group (LSE:SYS1) — Capital Markets Day

0:00 Good afternoon, ladies and gentlemen, and welcome to the SYSTEM1 GROUP PLC Capital Markets Day. Throughout this recorded meeting, investors online will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Just simply type in your questions at any time and press send. The company may not be in a position to answer every question received during today's meeting. However, the company review your questions submitted today, and we'll publish those responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. And if you could give you that your kind attention, I'm sure the company will be most grateful. I'd

0:31 now like to hand over to Rupert Howell. Good afternoon, sir. Good afternoon. Good afternoon, everyone, and welcome to our Capital Markets Day presentation. I'm Rupert Howell, recently appointed chairman of SYSTEM1 Group. By way of introduction, I admired Brain Juicer and SYSTEM1 from afar during a a long and me, some would say distinguished career in advertising and media as I shared their passionate belief in the power of creativity to grow businesses, and I'd seen how SYSTEM1 had helped major advertisers optimize their creative effectiveness. And during my executive career, I've grown a number of small and entrepreneurial as well as large and global businesses in the creative industries, and I've led two major digital transformations in the media sector. So I do know what it takes to succeed.

1:17 Consequently, I was delighted to be asked to join SYSTEM1 GROUP in 2021 as a nonexecutive director, but did find them somewhat lacking strategic clarity and, in particular, how to execute it commercially with the resultant lack of overall growth. So on becoming chairman late last year, I immediately instigated a full strategic review, which frankly was overdue. And we appointed two excellent new NEDs in Conrad Boner and Philip McCray to take major roles in that review. And a number of significant changes have emerged following it. Most of the heavy lifting in the review was done by James Gregory, then our COO, and it became obvious to all of us that he should be promoted to CEO to lead the business with over commercial responsibility, and he's made a truly excellent start.

2:06 Secondly, it was clear that in order to grow substantially, we had to conquer The US market. And John Kieran, our founder president, was the obvious person to move there and lead that, having already replaced the entire US team with high caliber talent who are already delivering. I've made a number of, significant introductions to John in New York to turbocharge his efforts.

2:29 Thirdly and most importantly, we updated and focused our strategy to reflect current market realities and opportunities, rejecting a number of alternatives which were not right for the business at this time. Our new strategy proposes a model that reflects how the world's largest advertisers buy our type of product now and for the foreseeable future, as well as developing more and larger strategic partnerships, particularly with the major digital platforms to scale the business amongst the mass market of advertisers serving them via our platform. Again, this has started very well, and I've introduced the team to the global advertising leaders of most of the world's largest digital platforms. So over to James and his team to take you through the details of the plan and the progress we are making. James.

3:21 Super. Thank you, Rupert. To introduce myself, my name is James Gregory, and I joined SYSTEM1 in August 2021, originally as the chief operating officer, where I was charged for completing the digital transformation for SYSTEM1 into a platform business while leading operations, IT, and consultancy teams. I felt that SYSTEM1 was an exciting opportunity for me because it allowed me to bring my experience in scaling digital businesses to businesses prime for growth. I was amazed by the progress that's taking place in building the products and the platform that turned the IP into highly commercial offering and wanted to help the business grow. As background, I have nearly twenty years leadership and experience in strategy, transformation, commercial and operational management of digital, distribution, and online retail environments. Past roles have all centered around scaling digital businesses, initiating and leading large scale complex transformations, and delivering new customer propositions.

4:13 For example, at Tesco, I led the online food business where a key highlight was launching a market first same day grocery customer offering that added double digit revenue and profits percentage growth to multibillion pound business. For today, I'd like to introduce four topics we'd like to talk to you about. Firstly, to share the key insights from the strategic review, progress against them, and how we're delivering the investment thesis. Secondly, I'll hand over to Robin Duchessere, our chief product officer, who will talk through how we're commercializing our IP through product development. I'll then hand over to John Evans, our chief customer officer, to share progress and plans for commercial execution, and John Kieran, our founder and president, to share our US focus. And finally, we'll move into q and a.

5:02 To start with, I wanted to refer to John Wanamaker. So he made his now famous quote in 1922 where he noted that over 50% of marketing spend is wasted. The problem, he says, is that no one knows which 50% of marketing this is. Well, this is the fundamental reason why SYSTEM1 exists. We're able to help markets make smart decisions and carry out marketing that provide highly profitable return on investment. SYSTEM1 was born from the world leading intellectual property that's created over many years as part of Brain Juice at PLC. SYSTEM1 has taken these prediction methodologies and has invested in turning this IP into market leading, repeatable, scalable products. Now SYSTEM1 is is a marketing decision making platform that provides our that provides our customers with predictions and improvements to improve their marketing effectiveness.

5:48 We believe the world's best at what we do and are laser focused on executing our strategy to grow the business, answering three of the most critical marketing questions for our customers on advertising effectiveness, brand effectiveness, and innovation effectiveness. Our business is focused on doing this throughout predict your and improve your offering. Historically, we've only talked about data, is which the predict your offering, and consultancy, which is a combination of the improve your data led consultancy, and finally, bespoke consultancy. Today and going forward, we split these out. The predict your data products in blue and improve your data led consultancy offering in yellow work hand in hand to help our customers create world class marketing and are both built into our platform service and offering. We've learned, however, that we need to retain the ability for bespoke consultancy, which allows us to help customers transition from what they're doing today to what they should be doing in the future.

6:43 We know this is only a very small part of our future offering and something we only want to offer to very large customers with high revenue potential to help get them on board. We are very clear that growth and success of the business will be measured by the predict your and improve your offerings.

7:00 To support this, we've fully built out the platform that delivers all of the predict your offering for data products as well as some of the improve your offering where possible. This end to end process used to take multiple days and weeks across multiple teams, both internal and external, and has taken significant investments over the last few years to allow us to reach this point. For clarity, we do still use RealPeaper's respondents as part of this process. AI is a hot topic, and we're investigating how AI could support in the future. However, right now, the quality of AI is not able to replicate human emotion in this process, would take away from our high levels of predictiveness. The platform is now integral to us. It allows us to offer predictions at market leading speed in under twenty four hours compared with our previous ad test offer that took up to two weeks, as well as allowing the business to scale without adding an additional labor cost.

7:52 We've also built out an express data consultancy offer served up by the platform in under twenty four hours, again, at market leading speed and down from the three days it previously took. The rest of our data led consultancy requires insight from our specialist consultants that cannot be provided automatically by the platform. The platform also operates as a results platform for customers to receive and view their predictions and improvements. We've invested in high quality UX in building out the interactive results platform that sets up our results across test your ad, test your idea, and test your brand offering. You can see from the images how we are able to bring to life top results, such as star and 30 rating on the top left image, through to live respondent feedback on a second by second basis as they view ads and the ones underneath it.

8:39 Customers are able to self serve results. And over the last year, we've invested in building out the platform, for example, to allow customers to share results across their teams and draw down credits for future work directly on the platform. A key insight that our customers fed back to us during the strategic review was that the reason they come back to us time and time again is for our predictiveness. We're the only company who is able to use emotion to identify profitable brand growth based on our IP, and Robin will help explain this in more detail. You may recognize on this chart, Kevin MacArrott, where we've helped Audi through McCann to build up one of the most successful Christmas campaigns by taking their early stage idea and turning it into a repeatable five star Christmas ad. Our customers also highlighted that while we're unique in predictiveness, we're able to lead the market with the speed in which we deliver our predictions and as well as the price points which we're able to offer, both due to our platform capabilities.

9:33 Joint Evans will later pick up on our ability to reach CMOs with this offering to cut through any bureaucracy and red tape as often felt lower down in businesses. And our prediction is driven by the scale of the business. We are not a startup. We have significant legacy in IP and have tested over a 160,000 ads, ideas, and brands with over 11,000,000 survey responses. 24,000,000 emotions have been measured through FaceTrace, unique tool to translate innovations brand building equity, and across over 50 markets. Our strategic review also confirmed our target customer as the world's biggest advertisers. You can see on this chart lots of these who we are targeting working with through our predict your and improve your combined offering. And what we know working with the world's biggest advertisers is that they require more than just automated predictions from us. They require a world class consultancy to help them improve their adverts and ideas to become five star offerings.

10:33 You can see in the charts from the middle bar that over three quarters of our revenue comes from customers who buy a combination of our predictions and improvements, data and consultancy. On the left is the revenue from customers who only buy predictions with no data like consultancy, and on the right are some of our legacy customers who we retain, and they buy consultancy only. This analysis reflects the increased level of customer focus in the business. We know how our customers buy.

11:00 You will also see our success in this space where our top 10 customers are providing 35% of our revenue, and each of these customers in the top 10 are buying a combination of predictions and improvements. We've been very successful in winning work with the world's biggest advertisers, but the nature of our contracts mean we're not able to list them here. Instead, we've called out some of the leading companies on the global scale that's at the top of their categories, as you can see on this slide.

11:29 The strategic review also confirmed our partnership approach as one of the best levers to scale growth fast. We've got we we have identified four partnership channels that provide us with introductions to the clients as well as opportunities to grow fame together, strategy that John Evans will help explain later. While we've been working with LinkedIn and ICV in this space historically, this year we've onboarded three times the number of partners we've previously worked with, including expanding to ask home, digital video on demand, and global radio partners.

11:59 We've also identified that The US is our number one priority for growth from a geographical perspective. We're very lucky to be able to have JK move to New York to be able to drive new business and open doors to the founder of the business. He's had great success over the last two months, and we expect that The US to be our main share of growth of the business going forward. We've also significantly improved the quality of our team in The US, and John will be able to share this along with the commercial results in his section of the presentation.

12:28 Following the strategic review, we further built out the executive team to ensure we focus on commercial execution. On the left part of the chart, we have our revenue driving customer facing area of the exec, led by John and John, who are out there bringing in new business and driving revenue for existing accounts. They're supported by Robin in her new role of chief product officer, ensuring we're developing what our customers want and need, and by Orlando, who continues to build our fame and innovation. I am personally also leaning into the commercial space to make sure we have the right systems, processes, and targets that allow our sales teams to be fully customer focused. On the right, we have a world class operational side of the team. Mark, Chris, and Emma continue in their existing roles to ensure we have that we allow the business to function seamlessly. In the middle, my role is to coordinate across these areas to allow us to execute brilliantly.

13:16 We've created a new role on the exec, which is Rebecca's, which is focused on turning our strategy into action through management of the business plan.

13:26 To keep ourselves accountable, we've identified that we want to use the rule of 40 as our measure of growth. This will look at growth of our strategic products and predict your and improve your space as well as adjusted EBITDA, a percentage of total group revenue. For half one, the current for half one of the current financial year, predict and improve revenue grew by 25%, and group adjusted EBITDA represented 8.3% of group revenue. This resulted in a score of 33.3%, a few points below the long term objective. And we wanted to refer back to the investment case set out a year ago in our previous Capital Markets Day. We believe the case of SYSTEM1 is compelling. We offer world leading prediction and improvement methodologies and unique step change improvements in product value for customers, and we continue to invest and innovate in this space as you'll hear from Robin Robin in a moment.

14:20 The prediction improvement market dynamics remain very favorable, and I'll touch on that in a moment too. We're able to defend through IP, branding, customer and supplier relationships, and we're winning new customers, retaining and growing them as you'll hear from John and John later on. And finally, the platform offers strong scalability and operational gearing. With all of this, we believe we can take 10% market share, allowing the business to significantly increase its value and be worth over 1,000,000,000. And as noted in our previous communications, we have a massive opportunity as we shifted from playing in the pure market research space on the left of this chart at $43,000,000,000 to the marketing space at 1,700 billion dollars. What's an opportunity for us to grow the business? And with that, I'd like to hand over to Robin who'll talk through how we're commercializing our IP through product development.

15:13 Great. Thanks, James. Hi, everyone. I'm Robin. And as part of the strategic review, I've been delighted I'm taking on the new role of chief product officer. I'm a researcher by trade, and my career over the past twenty years has spanned client service, sales, and operations. I've worked in large corporations such as our competitors, Kantar, and startups like Streetbees. I'm really passionate about providing clients with confidence, helping them to make the right decisions to help grow their business. And so SYSTEM1's purpose is very much aligned with my own. Previously, I was chief research officer here where I led a team responsible for the consultancy that's delivered on top of the data products. I'll continue to do this, but in my new role, I'm gonna bring together the data and consultancy all under one roof.

16:07 Ultimately, I'm responsible for developing, launching, and improving products to ensure we create value for our clients and ultimately for our business. And it's a really exciting time to be here as we already have the predictive suite of tools all accessible via our platform primed and ready to grow. So over the past fifteen years, SYSTEM1 has been obsessed about understanding how advertising works, both from working with experts in the industry such as the IPA, that's the Institute of Practitioners in Advertising, but also from becoming thought leaders ourselves in the space where we've released our own publications. Orlando, our chief innovation officer, is now authored to two books, Lemon and Lookout, which are leading the thinking in the advertising space.

16:55 They are the best selling publications from an ad effectiveness authority, the IPA. Not only do these publications help build our fame, but they build credibility for us, and they are a great source of leads. We also use the the lessons from Lemon and Lookout in an advertising master class, which we use to onboard client teams. As chief product officer, my role is to take the IP and the thought leadership and embed this into the products to ensure we can deliver the best possible outcomes, predictive outcomes for our clients. So if we could play the first video, please. Illustrate here the the idea of baking the IP into our products with an example.

17:43 So in Lemon, Orlando talks about the concept of left and right brain features in advertising and their impact on advertising effectiveness. The left and right brain don't do different things. They do things differently. Left is about logic. Right is about feelings, and you can see two very different styles of advertising playing here just to illustrate the point quite nicely. The left brain features are good when you're in buying mode. So in an advertising context, this is helpful for short term activation. While right brain features are better at delivering on the long term and are effective at building brands. Okay. So we know this, but how do we measure it, and how do we clue include it in the thinking in our products?

18:27 So really, this is the crux of my role, taking the lessons from thought leadership, applying it with supporting evidence, showing it works, translating it into new products and features with an existing product. So in this example, to be specific, we take examples from left to right brain features from Lemon. We show they work. We know that ads with right brain features drive broad and lasting business effects, And then we add these to our products where respondents identify the presence of these features in an ad, and then a client will know whether they need to dial up or down dial down to hit particular campaign objectives. To give you another example of our ability is our ability to predict share gain from emotional response. So we know that if you feel if you feel something, you're going to do something.

19:15 It's a very good predictor of what you do. So we measure emotional response in ads, brands, and ideas through face trace. This measure turns into a star rating that is predictive of real business effects. And once we prove it works, as we can show in this example here, we combine together the reach with our star score to show a real correlation with of naught point eight three with actual growth. I saw that there was a question around competition and this is really where we are head and shoulders above the rest. We can prove it works. And of course, the star rating is then a key measure within our platform. You can see it on the right here. So as I mentioned, prediction is paramount.

20:01 We found that the star rating combined with the quantity of advertising is actually more predictive than if you looked at the value of premiership football team squad and the points scored in a season. So

20:18 where are we now? Well, we have a suite of fully automated products all available on our platform. Test your ad, test your brand, and most recently, your idea. And we continue to invest and grow our most valuable asset, the test your ad premium database. We test almost every ad in The UK and The US within twenty four hours of airing. This database has now reached 82,000 ads. And in addition to generating revenue through subscriptions, it's vital in supporting the work that Orlando does in thought leadership. It really helps us to understand why advertising works. So what's next? So you know from our strategic review that digital is a real focus for us, and we know that this now accounts for well over 50% of the global advertising spend.

21:10 So it's vital that we extend our extend our testing beyond TV to take advantage of this new revenue opportunity. Now since the strategic review, we've actually developed a digital ad testing product, which we're in the process of validating with a global social media platform to live up to our promise that it can predict real world outcomes in digital too. I'm gonna take the opportunity now to showcase the new products, which will be available on the platform in April. If you could play. Okay.

22:21 So with our digital products, I'm proud to say we've been able to go from conception to launch and currently validation in just over three months. So for the so those of you familiar with our products or the eagle eyed among you watching that demo, you'll see that we have an exciting new attention metric. Attention is a hot topic in advertising at the moment, and we're looking at the most predictive way of measuring it. We have further work planned with a joint project with the IPA that's just kicking off, which we hope might deliver a white paper that we can share with the industry and further promote our products. And then beyond digital, we want to ensure that clients are able to test all the elements of that of their campaign with us. So we're launching t y a audio in March, which would allow clients to test their radio and podcast ads.

23:09 So I have to say it's really exciting time to be with the business, building out our world class predictive products all through our platform. So I'm gonna hand over to John now, who's gonna take you through how we're going to commercialize our offer. Robin, thank you so much. And, ladies and gentlemen, it's lovely to be joining you this afternoon. My name is John Evans. I'm the chief customer officer at SYSTEM1. And I've spent twenty five years client side making advertising, launching innovation, and tracking brands. And perhaps what makes me most qualified, to do this role is I used to be a SYSTEM1 customer. So I've actually used the SYSTEM1 tools and methodologies, to measure the impact of tens of millions of pounds of advertising spend.

23:54 Because I can tell you when you're about to sign the check for that amount of money, you need to be able to go back to the CFO and justify that that spend is gonna be well made. And that's what makes SYSTEM1 unique. We can predict the big investments and often the most significant investments that a company will make in advertising, innovation, and branding.

24:15 And I'd like to share with you perhaps the sort of six ways in which I believe we're gonna grow as an organization. So starting on the left hand side, as I said, we produce products that give confidence to marketers to make good decisions. Effectively, we're using our behavioral science and our research and data to arm marketers with the confidence to make the right decisions at the right time. And speed and price, as James was talking about are very, very important ingredients to that mix as well. We're gonna become we are becoming and we will become famous for predicting, improving, benchmarking, and celebrating creative effectiveness. And we are very much punching above our weight in in growing our fame and share of voice, and I'll I'll talk about that in just a second. A really important decision that we've made as a business and and perhaps reflecting the success we've had as well is targeting the CMO.

25:07 The CMO is where the decision is made. It's where the accountability for advertising, innovation, and brand tracking is. It's where the connection between the creative agencies that make the ad, the media companies that air the ads. That's where all of it comes together. And we've had great success, pitching CMOs and converting them into SYSTEM1 customers. Now we're still a small medium organization, so the best way for us to reach the world and change the world of advertising innovation and branding is to develop a network of partnerships. Let's use the people that make the advertising and make money from airing the advertising to help them be more effective. Because if they're more effective,

25:47 they will tell their customers about SYSTEM1 and will be more effective as well. And as James talks about at the top of the section, we've got three times the number of partnerships now than we had a year ago, which is exciting to see. Now one of the first decisions I made when I became chief customer officer this time last year was actually to divide the team into those that are responsible for landing new customers and those that are responsible for expanding new customers. It's incredibly important in a growing business, and I've been part of three businesses that have seen transformational growth and led the new

26:19 business team in each one of those is you have to have dedicated resource focused on winning new customers. And I'm delighted to say we've increased our headcount from three to 13 in pursuit of that goal. The majority of those heads have only joined in the second half, so the impact is still yet to be seen, but we're committed to focusing the resource where it makes the biggest difference. And then how do we scale? Well, we scale by having a team of experts that can manage professionally those customers, and as Robin was talking about as well, giving world class consultancy to help customers improve. Now there is a reason I've put Kevin the Carrot, although you can't see Kevin very well behind this slide. Kevin the Carrot has helped Audi become the most successful grocery retailer in The UK. In the last four years, they've scored a five star ad.

27:08 They're the only company on our database to achieve that. They've won Christmas twice. In fact, last year, they were joint winners as well. But importantly, how did Audi do it? Well, they did it by working with our predictive products, using our consultancy to improve, and also subscribing to our database to benchmark their creative versus their competition. And it's that benchmarking that has enabled them to measure the effectiveness of advertising. They've won IPA Gold last year for their effectiveness. And as anyone who's read the news will know, they've now overtaken Morrison's to become The UK's fourth largest grocer. So the results very much speak for themselves.

27:47 So starting maybe at the top of the funnel, how do how are we at SYSTEM1 growing our fame to become relevant to the CMO, relevant to marketers, and relative to advertisers? Well, this is just a snapshot of what we've been doing just in the last quarter since we updated you about the strategic review. But we want to be where advertising is talked about. We want to be all over the most relevant topics, and we also want to be supporting the most relevant theory and information about marketing. So whether it's analyzing the the Super Bowl ads or whether it's breaking down the 12 rules of Christmas, whether it's talking about recession and how advertisers should respond, or whether it's talking about representation of older people or or underrepresented communities in advertising,

28:30 We have got a data backed point of view and guidance for customers to make advertising better. Also, in terms of theory, we talked about Orlando's book, which is genuinely world class and leading the way, Or whether it's theories like wherein versus where out, where we've been able to bring our data to back big decisions that advertisers need to make. Now, at the moment, where everyone's under pressure to make good investment, knowing whether your creative wears in and wears out is a really, really important point.

28:58 So let me give you a couple of quick examples just to bring this to life. Two or three weeks ago now, we celebrated Super Bowl, and within one hour of an advert airing during the Super Bowl, we were able to bring put the results up on our platform. Within twenty four hours of the Super Bowl finishing, we were able to put on a webinar reviewing all of the ads, what you can learn, who won the Super Bowl, and we even had a former NFL player join us as well for that conversation. Now what I'm particularly pleased to say is that since I've been working for

29:30 this company, we've got five times the number of people now attending this event. It's becoming a regular event in the calendar for many people who care about advertising on the world's biggest advertising stage. Similarly, if I move to The UK, we all know that diversity inclusion is a hot topic for many marketers, and we've just launched our new study looking at how older people are represented. So here's me, as you can see, alongside three wonderful other people that joined me to talk about that. We had Lorraine Kelly from, good good morning Britain, Alessandra Bellini, who's the CMO at

30:01 Tesco, Kate Waters, who leads strategy for clients over at ITV. Now that that webinar had over a thousand people attending and was the most successful webinar ITV have ever done. And that's a credit to the work that we have done together as partners building up the fame and the applicability of SYSTEM1 data. I just wanted to talk briefly. There's no point doing fame building unless it converts into leads, inbound inquiries that end up with, you know, end up pick up with new customers. And what I'm delighted to say is over the last year, in total, we've seen a 28% increase in inbound inquiries. In fact, it actually gets better that since Christmas, if you take q four, that's accelerated to 78%. And it's really because three main source of inbound inquiries from fame are really accelerating very nicely for us. On the first, on the left hand side is my own podcast that

30:52 I do to talk about SYSTEM1. That's grown at 335% this year, and it accounts for about 25% of all inquiries we get. In the middle is Orlando's, second book, Lookout, that continues to drive significant inbound inquiries, also accounting for circa 25%. And then our database of subscribers to SYSTEM1 news and information has grown this year by 35%. In fact, it now accounts it is now up to about 38,000 subscribers, and we are putting out communications two or

31:24 three times a week, all of it relevant to marketers and insight professionals around the world, and that's really getting great engagement. And all that adds up to a massive increase in inbound inquiries. But perhaps rather than me tell you about SYSTEM1, I thought it'd be rather nice for the world's most outspoken marketing professor, Mark Ritzan, maybe to tell you what he thinks about SYSTEM1. So on the next slide, I've got a short video from the man himself.

31:56 Does sound like I'm, like, I'm doing some kind of advertorial for SYSTEM1. Like, really, John? That's amazing value. What incredible value. Tell tell the listeners again. Sign up here. Yeah. What a great value offer. But I'm genuinely blown away by I mean, I always like your data. Do know what mean? You were always been kind enough to send it to me. But you start thinking about how you can use it.

32:17 It's it's mind boggling. And I I'm not a fan of pretesting. I'm really genuinely I mean, I came on the podcast to have a chat with you, and it's the end of the year. I'm gonna get pissed later, I understand. But genuinely, right, you look at what you're knocking out here, and you just think, fuck, SYSTEM1, man. You know what I mean? The data's interesting. The insights are fantastic. You know what I mean? And it's Yeah. It's replacing the world of, I like this ad, and you like it too. That's it. Again, competitors looking at another competitor's ad and forming conclusions is pretty much the dumbest thing you'll ever do, right? But getting data for how the target market perceive the ad in real time Yep. Is a really different thing. You know what I mean? Yeah. Like, I I wouldn't trust a brand manager to rate their own ads or the ads of their rivals. For a decent sized national campaign, the fee to do the system one test, at least it's turning to Yeah. An advertising advertorial for you, but I'm I'm interested in this. It would be what? 5%? It wouldn't be 5%. Oh, less than one. I mean, yeah. I mean, talking 6 well, $6 for a test, let's say. Well, you'll you'll get

33:17 the numbers Yeah. Out now. Yeah. Yes. Exactly. I'll have one of them. Yeah. Yeah. Yeah. Yeah. So if it's $6 for a test, so we're talking about an average agency spend, let's say, $4,500 and Right? Yeah. For $6, you can effectively beat better, bigger players just by being smarter and spending $6 on research. And for $30, you can get every ad that ever read in your category. And for $35, you get that and you come around and wash their cars every week. There you go. You know you know what I'm doing the weekends.

33:47 Four out of five new campaigns aren't as good as the one they replaced. It's new Well, you've reminded me of something I usually do in pictures, which is I say, I'll save you half your marketing budget overnight. And then I go, how can you do that? I said, well, on my database, I'll tell you which half your ads aren't working, which half are. And just run the ones that are. Right? Don't have to produce anything new. Mind boggling. You know, I know. But but you can sense a disappointment. I've I've just served up some really good news, and the and the disappointment writ large going, well, I'm not gonna make a new ads now. You see you see your podcast seat. It's like most marketing podcasts are so full of and nonsense and pointlessness.

34:22 But that point just there, that's better than any point. Do it again. Say it again. So you're saying that. So I can tell was gonna wait, listen. Okay. Listen. Listen to me. You've you'd all listen to these podcasts, listener, and what you get is essentially no added insight and just two usually two blokes, unfortunate like this, talking to each other and not adding any value at all. Right? Well, John just dropped there in a very sort of, you know, casual fashion. He's like a real a double humdinger in my opinion. Scott, do it There you Alright.

34:52 So there you go. There's the world's most outspoken marketing professor. But actually importantly, Mark Ritson is perhaps the biggest influencer in marketing that there is today. So what he says really holds a lot of a lot of weight, and tens of thousands of people have signed up and been through his mini MBA, all of whom are now exposed to SYSTEM1 results and testing. Even this morning, in fact, if you read marketing week, you would see him writing a column based on our data. So, again, it shows that, you know, by working with partners like Mark, we can really

35:22 get the message out there. I'd like to talk briefly about, partnerships actually and how they connect with our products. And this is why I'm so excited by what Robin is doing, developing our products across a number of different channels. Because just in the last few weeks now, we've got not only of the Test Your Ad TV, which you'll be familiar with, but we've now got Test Your Ad Outdoor, Test Your Ad Audio, and test your ad digital. Now the reason that's important is most media is bought by channel. So by creating partnerships with different channels, we can influence and get and create connections with the world's biggest advertisers.

35:55 And as I said before, we've increased our number of partners by about three times, and this is where they're coming through. It's by applying our data and our technology to the challenges of that channel and adding value. Every media owner wants to be able to add value to customer. They want to be able to go and argue for more spend on their channel. They also want to be able to help their advertisers make better work. Because if the channel can help their advertisers make better work, guess what? Both win. The customer wins and the channel wins.

36:24 Now we've got partnerships developing or existing with US based TV networks, US and UK based media owners with for outdoor advertising, again, for audio advertising as well. We're also working with a number of global digital platforms. And this is a really, really exciting time where we're using these partnerships and our technology to massively expand our reach across the world and get to the biggest advertisers in the world. Let me just give you a couple of examples just to finish up on. I really want to explain both the fame building element and also the partnership element that gets us in front of big customers. This is, the wonderful Ty Heath over at LinkedIn. She's director of market engagement at the b two b Institute. She's also responsible for their d e and I program. Now we collaborated last year on the launch of, Feeling Seen USA, which tests loads of ads looking at how representation in advertising impacts on its effectiveness and how to get it right. Because I can tell you this, that every senior marketer is worried about how to get DNI done well. Nobody wants to be that one that

37:27 gets it wrong, and everyone wants to not only respond to the moral case, but also the commercial case to get representation right. So we we jointly did this study together, and what it means is that we're able to benefit from LinkedIn's endorsement, promotion on their channels, attending events, and generally building fame, you know, building fame in The US with a partner that is much bigger than us and far better able to get the message out there.

37:52 But it's not just important that we build fame together. We also need to create connections. And this is where we've we've developed something with LinkedIn, which is I'm hugely excited about, which is called the LinkedIn Edge program. As I was describing before, it's really important to a platform like LinkedIn to make sure their own advertisers' advertising is better. I'll give you a rather shocking statistic. James said about the make a quote up front, half my advertising is wasted. In b to b, four out of five ads are wasted. It's even worse. Now, of course, LinkedIn know this, they want their advertisers to make better advertising. Now the great thing about LinkedIn is don't think about them as b to b advertisers. Think about them as the world's biggest advertisers that also do b to b advertising. Because, actually, when you talk to you know, over the last twelve months with LinkedIn, we've done tests for IBM, we've done tests for Microsoft, we've done tests for Lenovo, for Intel, for SAS, for Salesforce.

38:45 You know, we we've we've done work for many of the world's largest advertisers, and some of those advertisers are now becoming customers. So so by forming these partnerships, not only can we get our name out there, but also we can create the connections that lead to business. And this really is the perfect way in which I believe we will grow this business in the future. Now we're talking about a US based big media company, so this is the perfect opportunity for me to hand over to John, our founder and president, to talk more specifically about our wins in The US. John, that was fantastic. So I'm dialing in from a a very snowy but beautiful New York,

39:26 and it's thanks so much for joining us. It's The US, The US, The US, as you as you gathered because it is massive. It is basically 53% of global advertising market and 43% of the market research market. And the size of the prize here is just exponentially bigger than even sort of major UK brands. And as those that have been following us know, we've rebuilt the team here in New York. So Jason Chabib, who joined a year ago, so he was basically head of market research for Diageo, the world's largest spirits brand, and effectively number two globally.

40:14 And we've recently hired Steve Alensky. He's a very experienced, well, researcher and marketeer with links, let's say, to a a significant number of c suites of the FTSE sort of 500 companies. And we've built rebuilt the team. You know, earlier in the year, we had we didn't have a full complement, and now we've got a full team, and they are firing on all cylinders, let's say. So proof of the pudding, just to just to talk you through to the degree that we can describe them. So The US wins in in h two. So let's just do them. So a top three global FMCG or or CPG company as they call them here in The US. I'm I'm getting used to The US phraseology.

41:10 We've won two very large US grocery retailers, which is fantastic. So, hopefully, we can we can build on the LD sort of fantastic work that we've done in Europe. A top three global online recruitment platform. The US division of a top three spirits company, and The US division of a top three global cereals company. And I spotted in in the questions, you know, there was a question about finance, you know, sort of companies. So if we go to what's coming up in the pipeline, now we've only included things that are real in the sense that we're actually working with them, but we're at the early stage.

41:56 Because the way that the process works is all the fame building that John was talking about, you know, Orlando's fantastic books, the work that John does gets interest. We get engagement. We often end up doing a presentation to their marketing team, and then it tends to start with a pilot. So, you know, you get an RFP. You win the RFP. You then end up with a pilot, and then the pilot is what drives the business. So at the moment, we're working with a top three US broadcaster. So you know we have ITV, you know, as a as a fantastic partner in The UK. Fingers crossed, it looks like we could have the equivalent in The US coming online.

42:44 Now we've also got a part you know, a pilot with a top three global online retailer. Okay? I'll leave it to you to imagine who that might be. A pilot with a global credit card company. So that's the, you know, the finance thing. And it's probably worth saying that we work across pretty much every, if you like, cat category including, you know, automotive in the in in Europe, but not yet in The US. And then we've got a pilot with two global social media platforms. So into the digital world and the digital capability that Robin was outlining earlier, you know, is obviously a big part of that.

43:31 And then finally, you know, a pilot with a US division of a top three dairy company. So the prospects and the team are working fantastically well, and it's quite exciting being here back on the front line, which which which is which was a bit new sort of for me given doing the CEO role, which James, by the way, is doing such a fantastic job on. But I have to say I'm really enjoying being back on the frontline working with a fantastic team, which I hope you've you've got a flavor of through the presentation. And with that, I'm gonna hand back back to James. Thank you.

44:17 SYSTEM1. Thanks, John. And to close out, I just wanted to share one final chart with you. Our strategy is working. The majority of the revenue of the new business now comes from predict your and improve your offerings. And as you can see on this chart, which talks about data only, the majority of prediction revenue is coming from new customers in the dark blue. We expect this to continue with laser focus to ensure growth of our business going forward. So thank you for listening today. And with that, we'll move into q and a. That's great. Thank you very much indeed, James, and to the rest of the presenters for your update, this afternoon. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated on the right hand corner of your screen. Before the company take a few moments to review those questions submitted already, I'd like to remind you that recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your Investor Meet company dashboard.

45:14 If I may, Chris, I'll hand back to you, if I may, to manage the the q and a. If I could ask you to read out the questions and indeed give the responses where it's appropriate to do so, I hand those out, that'd be great. I would probably invite everybody to bring their cameras up at this point so we have the cameras up. That'd be great. And as I say, Chris, if I may, I'll just hand back to you in the meantime. Great. Thank you very much indeed, Mark. I don't think I'm on camera at the moment, but Yes, we are. But, yeah, Chris Goldstein, chief financial officer of SYSTEM1 GROUP. Very good to meet you all virtually. If I could start the q and a with the question that came in first, thanks to the advanced question every week, which is what is the future of the original consultancy business, and why don't you ditch everything except data?

46:03 So if I could log that one at James Gregory. Sure. Thanks, Chris. Elaine, it's a it's a very good question. So we I think I talked on the presentation about wanting to retain the ability to deliver bespoke consultancy because it's very, very valuable in how we onboard the world's largest advertisers. So they often need specific supports while they transition into methodology. So what we know is we know that we want to retain the specific original consultancy business only to allow us to grow the future of predictions and improvements going forward. And so to be explicit, we're not going to market selling this capability. It is sort of a historic capability which we've retained and we will use to grow the predictions and improvements going forward. And then on the second question around why don't you ditch everything except data? There was a chart I shared which shows sort of the the revenue splits for those who buy data only, for those who buy data and consultancy together, and those who we've retained who just buy consultancy.

46:58 And what you can see there really, really clearly is that the majority of our revenue comes from customers who require more than just predictions and more than just They buy data, and they buy data led consultancy. Our top 10 customers all require those cut those offerings. Actually, our top 20 customers also as well. We don't want to lose these customers, and, actually, we're really clear that their revenues by only offering a data product will be severely limited. So there's appetite for data only, which we do service, but that tends to be lower priced and less frequent and requires a large commercial investment in marketing, sort of direct marketing, SEO, SEM, etcetera, to build that through the only if it was the only sales funnel. Great. Thanks, James. We've had a few questions that are broadly the same question, which is you've told us about the rule of 40 and that that's your key measure by which you balance growth and return.

47:48 We you've not told us about the supporting measures. And it's quite what what why not and in what areas will they be and what else can you tell us today? Yeah. And I'll pick that one up, Chris. So we've we've we've talked about them without the measures today. So the topics we've covered off are essentially where we would like those measures to be. So we've talked about US, yeah, so US revenue growth. We've talked about our customers, so customer churn, for example. We've talked about the number of top advertisers and the number of partners that we onboard. And we also want to talk about some recurring and repeatable revenue as well going forward. So we're very explicit on what those are. They'll be shared as part of our annual report, which we get through to in a few months time, and come back to you on that point. Great. Thank you. We've got a a question.

48:33 I think this is one is for, John Evans. Can you tell us a bit more about wear in and wear out? It's not, not a term this question has heard before. Oh, it's a lovely question. Well, anyone who's worked in a marketing department will know how much marketers like to change their advertising. So, typically, because most business work on annual planning cycle, every year, you you you sit down and write your brand plan, then you'll brief the agency and do another another new bit of creative. It's incredibly expensive to do that. It's very risky because the new ads you create may not be better than the old one you've just ditched. Now we've so one of the myths in marketing is there's this thing of wear out that the audience gets bored of the creative. Right? It turns out that's not the case. And we've got this lovely phrase at SYSTEM1, which is familiarity breeds contentment.

49:25 And, actually, we found the evidence for that in we've we've we've done a test actually with one of the world's biggest brands, won't say who, looking at all their ads over the last five years. And apart from a handful of ads linked to sporting occasions, obviously, the creative is very linked to a particular moment in time, every single ad actually gets better in terms of how the audience feel about the ad when we test it. We've also measured that. We've adjusted that for media spend, for frequency, for length of time. It doesn't matter which way you cut it, but actually most advertising, if it's good advertising, gets better. The reason that's so profound is when you're having to justify to, you know, a CFO like Chris here how you spend your money, it's often better to evaluate what works first and and put more investment behind that because then, ultimately, you spend more of your money on what works, less money on wasted production and and agency fees, and then you can get bigger share of voice and more effective.

50:20 Now you so whoever asked this, you would be surprised at how controversial what I've just said is. I know it seems very sensible to everyone on this call, but believe you me, this is a controversial breaking bit of news that has got a lot of traction. Great. Again, there's a there's a cluster of questions. It doesn't make sense to take one off the other, so I'll try and amalgamize them into one big, big thematic question. And the the two sides of the question question are, if you're being successful with through partnerships and growing new customers, why is the revenue not growing? So I suppose the flip side question is, how confident are you? Are we that the worst of the revenue losses are are are over in the old consultancy business? So, James, happy to Yeah. Sure. So you'll assume within our charts here, we talked about the predictors of the data revenue growth and where that is. So we're we're very clear, and I think I called out again within the rule of 40 where we're looking at data and and improvements, so click through and improvements growth, that we have significant growth in that space.

51:23 And what we've also been sort of facing into is the reduction in the old bespoke consultancy business. As I said, we aren't out there promoting it. We are still servicing some customers who we have good contracts with, and we're able to retain that revenue, but we aren't bringing new revenues. So what we've seen over the last few years, really, is that combination of as the as the new business has grown, the older business has declined. We've now reached a point, we believe, where we've actually sort of bottomed out on the old business. So, again, the charts I showed where they're consultancy only, we believe that we'll retain in a similar space for those customers who want to retain for a long time. And, actually, the new data, the predictions, and the improvements alongside it will continue to grow along the top. So that will translate into overall growth of the company. Does that answer all the questions, Chris? I think so. Yeah. If it hasn't, no doubt, get some follow ups. There was a question there was a very specific question about the financial services vertical, which dovetails in with another question. So how how important is that SYSTEM1? What's potential?

52:21 And there's a a similar question, which is let me just find this one. In which customer verticals are you strongest and weakest, and why why is that? So, John Evans, would you like to have a go at that? Yeah. No. I'd love to, actually. Well, one of the one of the things I personally enjoy about talking financial services companies is they tend to historically be underserved with the kind of information and, market research techniques that we have. So what I can say is that when when we're pitching for a for a financial services company, we're much more likely to be talking to the marketing department. They're much more likely to see the value in speed and the platform and so on. And they tend to move more quickly and see, you know, more obviously see the benefit of what we do. If if if count of that, if we're pitching for more traditional CPG businesses in South America, you know, it can be a bit more long term because they might have more established kind of alternative to SYSTEM1.

53:18 In terms of where we are where we're winning and where we're growing, actually, John got it about right in The US actually. There isn't actually one vertical. If I had to choose one, you might be surprised to know it's actually retail. So we again, I I have to be careful what I say, but we work with the majority of grocery retailers in The UK, and we work with a a number, a a a good number in The US already. And we've actually made a big investment in the last year in in adding retail to the test your ad database. When Robin said we test almost everything, that's a change we've made in the past year. And it's really paid off because, actually, retail as a category is one of the biggest and most frequent advertisers, as James will know from his Tesco experience. So that would probably be the best, but, honestly, we're working across, many, many, many verticals.

54:09 Yeah. And and just just to add to it, John, I think, with financial services, it's probably fair to say that the in in general, as an industry, they need a lot of help. So generally, the advertising and the the ideas that have come from that sector haven't been the strongest. So it is an area where we can definitely overplay our ongoing forwards. And, yeah, perhaps to add to that as well, it's the categories where the overt messaging is is too heavy. You know, those are the typical categories, and that's often also in tech. You know, some of the tech sort of stuff, electronics, but re retail historically. But it's about emotion. The more people feel, the more people buy. And that's in a way what we coach and we train and we basically, you know, hold the hand and, you know, the great the work that Robin's team do on the improvement side, that's where we actually change their habits and we get them to work with their ad agencies much, much more compellingly and and successfully to basically make adverts that we'll remember for years and years and years. And and they'll also pay for years and years and years.

55:19 It's the long lasting effects of brilliant advertising that, you know, need to be understood because there's gold in them hills. Question for James. What are you spending most of your time on, James, as new CEO? So the the best thing is now we're really clear on our strategy. My time is spent assessing over execution. Doesn't necessarily play to everybody, but for me, it's the most exciting thing there is. So the maturity of my focus at the moment really is on the commercial side of the business. What's really clear is that the operational side, so our products and our platform have been built out with brilliant standards. There's more product developments, and we'll always focus onto that. But in reality, we have a great operational platform and a great platform to serve our customers.

56:09 But where we'll be judged will be the success of our commercial space. So I'm working really closely with both Johns, Robin, and Orlando on that left hand side of the charts, our customer facing and revenue driving side, to really help drive forward that part of the business. Great. Thank you. We've got one here. I think if I start with Robin on this, can you elaborate or but if if it's not you, Robin, we can flick it to John Evans. Can you elaborate on the pricing model, please? I heard 6,000 for TYN, 35,000 for a complete dataset. Is there any subscription offering? There is a subscription offering. I am going to back that to John because it's very much in his his sweet spot on the commercials. Well, according to Mark Ritzan, it's incredibly good value, by the way. So, yeah, get in quickly before prices go up. The the way it works is so the the pricing model is very simple. So £3,000 so I'm gonna talk in pounds, so apologies if you're, dialing in from another country. But, £3,000 for basic data, basically, the data to tell you, your prediction data. £6,000 for pro, which is the diagnostics, which gives you the information you might need to improve your ads, and then, £12,000 if you want that, plus Robin's amazing team telling you how to improve it. So it it's and and all that's to the data delivered in twenty four hours, as Robin said.

57:30 And then the, advice can either be done in expressway, which is twenty four hours, or a full improvement way in three days. Now the £30,000 I was referring to, by the way, is the average subscription cost if you would like to see every ad in your category. So if you're let's say you're I'm pretending you're Audi Kevin the cat, you know, you're out of you're team Audi, and you want to see every other advertiser in your category. And in most categories, you've got hundreds of ads, so there's enormous value for money. A typical subscription, I I say typical because we do tier it by mega categories and and and standard categories, would be £30,000. One one point to make actually, and I think James touched on this in the beginning is all of our major advertisers, if I take our top five advertisers, they all subscribe.

58:19 Now the reason that, it it make it makes our proposition very sticky because if you, if you subscribe, you get used to seeing your competitors in your feed, you get used to being able to benchmark versus your peer group and so on. And, actually, that's the thing that makes SYSTEM1 really embedded in an organization. And, again, without naming our customers, if you go through all the top ones, one of the key reasons they stick with us and depend on us is because of that database. And, John, just to add, I probably should have said it in my piece, but I think it's four out of the five US new business wins that I that I went through Yeah. Have all subscribed to the database. Correct. It it's incredibly powerful as as you say. You know, when you can see how you're performing, which ads you're wasting, how are you performing on average compared to your competitors, you know, it's it's once they get into it, there's no stopping them.

59:15 Great. I think, John Kieran, this is this is a question very close to your heart, so I hope you're happy to take it. What intellectual property protection do you have in place to protect your technology? Well, we have trademarks on all of our methods. We have a patent on the mind reader, which we didn't mention, but it's the way that we get qualitative input to add to the quantitative prediction metrics. And we've got some very, very clever ways of actually formulas, if you like, for how we translate the answers to the clever questions that we ask into the simple one to five star rating, which we then know how to translate into market effectiveness.

1:00:07 So it's it's it's a I suppose it is a complicated combination of things which we make it look incredibly simple, but it would be incredibly difficult to replicate because there's a there's there there are lots of clever algorithms in the background, which we've learned through all of that testing of tens of thousands of ads, ideas, brands that actually makes it predictive. And it's the prediction that matters, and then it's the improvement and the guidance from, you know, the clever experts that improves improves what they do. Great. Thank you very much, John. I'm just trying to just lost my actually, it's just a question of clarification.

1:00:57 This shows how cheap it is, John Evans. The question is, is the £30,000 average pres prescription sorry. Subscription Yeah. A month or per year? Oh, there we go. Well, there's there's a bit of feedback for me there, isn't there? It's an annual cost. I should say £30,000 is the standard price. £60,000 if you're in a super category that's got over a thousand ads. But, yes, that's a whole twelve months of data. Great. Thank you. Robin, sorry to spring this one on you. Can you actually, I think this is an opportunity to talk quite generally about the panel. Can you talk a bit about your panel, e g size, how you nurtured expense or capitalized? How integral is it to your proposition?

1:01:44 Yep. So we we we work with third party guys for our respondents, and we hold them to very, very high quality standards. We have our own quality metrics as well as their own. So it's, you know, we we absolutely have to ensure that the the quality of our predictions is based on the quality of our panel. So we have very close supplier relationships, and and we manage those very tightly. So not our own supply not our own panel. We we outsource that part. Yeah. And and on the financials, Chris, so that's treated as an OpEx cost as well. So we we run that through as a direct cost to the business rather than capitalized. Yeah. So so that's included. So so so that that gets expensed before our gross profit. Again, I've got a cluster of questions that are really about productivity in the commercial team and particularly trying to look at the number of new customers and the amount of new revenue versus the number and the cost of the commercial team. Now, of course, the commercial team includes the marketing department as well as the sales department. Yeah.

1:02:54 And and and so the the the questions are trying to compare, John Evans, the amount of new revenue generate versus the number of salespeople we have. So would would you like to talk about how we I would. Else? I I would. And and, hopefully, I can add some context. And, Chris, jump in if if if we steer off piste on this one. So a number of things actually. So firstly, in the last year, we've made some radical changes to our commercial organization. In half one, we ran with about a 30% vacancy rate, so mainly due to The US, by the way. And John was talking about this, but we we built The US literally up from scratch. So that that's a significant explanatory factor in in half one performance. Second thing to say is, obviously, as you all know, there's been a lot of global uncertainty, over the last year. So, basically, since February last year, a lot of marketing departments have either paused or canceled plans mark plans new marketing campaigns.

1:03:48 Now our involvement with our customers is at the early stage when they're thinking about planning for their next campaign. So when that gets put on hold, that's when our revenue suffers. We saw it in the pandemic. The difference is in the pandemic where it bounced back, obviously, in the last year with the war in Ukraine, we saw we saw a sudden reaction where customers started, you know, cutting back, and then it's gradually started to come back. But I'd say three of our top five global, customers that test with us are heavily exposed to Ukraine. So that's just that's just a bit of context for half one. Specifically talking about new business, and, Chris, just just, fact check me on this one. I think I'm right in saying that in terms of sheer number of new customers in half one, we equaled or slightly exceeded if you look at the last five years.

1:04:34 So despite the headcount being down versus versus, prior years, we actually still managed to deliver largely through our fame building being very effective because our fame as I talked about in my section, our fame buildings ramped up and due to our partnerships. We actually had a record number of new customers, coming in in half '1. I think it's six or seven more than we've ever experienced before. Obviously, can't talk about half two because we've not closed half two. Qualitatively, could tell you which would would be about right that we are busier pitching than we ever have done. So that's probably about as far as I can say without giving a number. But if I go on the how busy the team is, how busy John is, I'm sure you'll nod along to this one. But the fame building is translating into inbound inquiries, is translating into pitching, and, you know, we are certainly busy.

1:05:21 Can I can I just add to it, John, please? That's okay. So I think Please. Yeah. The other piece is around, I guess, so what does our sales team do? So our sales team, it's not just about necessarily winning that first pitch, but it's also then what happens. So as you said, they're we're out there pitching at the moment and winning some great contracts with some some of the world's largest advertisers. And when you get in the door, then a lot of work then to expand that. So you we've seen that we've been able to expand our largest customers to be worth over £1,000,000 worth of revenue. But, obviously, the initial piece of work we do, as John said, if if it was one test, might only be in the thousands of pounds. So what we have to do there is we have to expand both network within the biz or the business where we are talking to the customer across their different regions, across their different verticals, however they're set up, and really embed ourselves in their process. What you then find is when you have a customer where they really buy into what we do, and I think Robin, you picked up on this. They then are sort of using SYSTEM1 as the way they do marketing.

1:06:12 So for example, they will then be doing master classes on sort of Lemon and Lookout or Lando's books. They would use star as their rating of how good their ads are as an internal metric, and they'll use us within their annual planning cycle. So there is an opportunity for us to become absolutely great within these big companies, but it does take a moment. So when we talk about the number of sales team we have, the sales team are winning both those upfront pitches as well as that expansion once we've got them once we're in with those businesses. Great. Thanks very much. And there's a question that sort of builds on that selling, picking process. Let's get one for John Evans. Just inviting you to comment on the differences between the sale length of the sales cycle in Europe versus The US. Length is do you mean sales cycle in terms of onboarding and winning new customers?

1:06:59 It's more it's more a function of the size and complexity of the customer than their geography. So, typically I mean, the reason actually John talked pilots as an as an example is because of the type of customers we're talking to, they're very, very big customers. They've got purchasing departments that set standards for the level of rigor, you know, before they onboard new customers. So if we're talking about a global company with procurement departments involved in the process, we will have to jump through quite a lot of hoops. And that's why you typically go through an RFP. You might be one of five. We might win that, and we go to a pilot phase. And the pilot phase then signs off, and then you become onboarded as a supplier. So in John's section, what we're talking about there were US major global US companies who we've won the pit we've won the pitch phase. We're now in the pilot phase, and that should then turn into the onboarding phase. So I suppose by virtue of the fact that US customers typically tend to be global companies and typically have bigger spends, bigger, you know, procurement department intervention, it probably follows that that but I would say it's more a function of the size necessarily than buying patterns between US and UK because we've got examples of winning customers very quickly in The US, and we've got examples of winning them very slowly in The UK. So it's it's more it's other factors that are at play.

1:08:15 And it's it's it's worth saying, Chris, I know you're you're in your current role as brilliant question master, but Chris's team do an amazing job. And they've learned the tricks of the trade over the hard one years of how to deal with procurement, how to deal with the t's and c's, and get us onboarded, which which is not a straightforward or simple process, but we're pretty good at it now. Thanks, Chris. Yeah. Thanks, John. No. I often say that the the the world's the world's 100 biggest advertisers don't tend to buy things with a credit card. No. Like, there's a very large legal and procurement department so you can string things out a bit longer than the marketing leaders would like. Yeah. Great. Thanks so much for that. If I may as we have our chairman here, I've got a question that harks back to our approach to the strategic review, that's okay Yes. Rupert.

1:09:11 And that's asking what consideration, if any, was given to undertaking a formal sales process when we did our strategic review? Yeah. We sorry. I'm oh, yeah. Am sitting here, but sharing sharing a camera with Chris as we're together in the office. Well, it was absolutely part of the strategic review to to look at that. But what we, unanimously agreed quite early in the piece was this was not the time, to seek, a sale because it's so early in our growth cycle. So after a period of, well, frankly, zero growth for several years, our view was that we had the real opportunity to get back into growth. We're already seeing signs of that so quickly after the strategy review.

1:10:02 And it's only once you're in a growing company and you get to a position of strength in the marketplace that you become attractive to potential, you know, partners and acquirers. So, yes, it was something we looked at in the strategic review, but we were very clear that this was the wrong time for this business to consider a sale. And that when you're doing well and you're seen to be successful and seen to be growing, then people tend to come and talk to you, and then that's the time when you can consider whether any of those are suitable to turbocharge our growth. I think one of the one of the interesting things is we're starting to already get interest in The US from some of our partners who might in time become a little bit more than partners in terms of helping us helping us accelerate, particularly in The United States.

1:10:50 Yeah. To which I I I would just just just add that, clearly, we we took a a lot of advice during Oh, yes. During that process. And for good or bad, the final quarter of last year when we did the strategic review was probably the, you know, most pessimistic time in terms of fintech, martech, m and a that that I've lived through for sure. So Absolutely. So the the the context was not not So the wrong favorable. Definitely the wrong time, but something that as a board, we would obviously constantly keep our eyes open for because particularly, as I said, as we develop more and more partnerships, strategic opportunities arise. Great. Another question here back to The USA, and that's what can we say about what our what our growth goal is for The USA?

1:11:42 James, do you like to kick off on that? I'm sure JK will want to add some magic. Yeah. So when we'd be looking forward, we said that we expect over half of our growth in revenue to come from The US. So we know it's the biggest untapped market we have. I mean, John had some the stats in his past presentation, and he saw the case studies where we're bringing the work in already. And, yeah, we know that historically also it's been the largest part of our business, but right now, it isn't. So looking forward, over half of the revenue sorry. Over half of our growth in revenue should come from The US. Great. JK, anything to add? Hang on. Just un unmute myself. Yeah. You know, Rupert is actually you're over here next week, and both of us are leaning leaning into it. You know, James, you're right. You know, we're being we're being very sensible about getting The US to be at least, you know, half of our growth and, hopefully, you know, half of the business.

1:12:37 But as as we said, The US has the massive potential, and I think that includes, you know, getting interest to the previous question on how attractive we are as a business. You know, the more successful we are here, the more everything starts to work in our favor. So we've got a great team now, and momentum is terrific. So, you know, if if if it stops snowing and I can actually get out and meet more clients, we'll be alright. Brilliant. Thanks. Thanks, John. There's one here on the billion the the the billion dollar valuation goal and asking what sales number supports that. So what was the sales number attached to that 10% fully scaled share?

1:13:33 Yeah. So I think that the charts I showed on the size of the the marketing space is really what it is. So the the billion pound is a as a valuation is an outcome. Really, what we need be doing is taking 10% market share. If we can do that, then absolutely, our revenues will be significantly above sort of billion pound space, and therefore, you could translate that as the value of the business. Yeah. And and what's the trajectory to get there? And I guess that's that's about the shape of the business and how it would look then versus how it looks now and what what Yeah. So the the way that we'll get there will be through the predictions and improvements parts of the business. So we've we've talked about that sort of over a long period of historically and going forward, but we know that we expect our bespoke consultancy to remain remain very small. Actually, as a quantum, it might remain sort of very similar, and that percentage of it overall will drop going forward.

1:14:19 What you'll then see is the predict your and improve your offerings increasing. So as we're growing to take that 10% market share, the significant majority of that will be predictor and improve. Again, when we look within the predictor and improve, and we'll share more of this towards year end, and and, again, Chris, I'm oversharing at this point, but we see majority of the revenue comes through the data sort of over three courses with the improve your being sort of less than a quarter on SYSTEM. And when and there was sort of a way for us to get there. So the recognition that actually that we are we're a we're a small company. We we we are making great strides, and we are attempting to punch above our waist, and I think we're really starting to do that. But the partnership approach is a way for us to reach maximum value really, really fast. So when we're out there working with the partners and we become their trusted partner, introductions they can make are significantly more powerful than us going out sort of in the direct sales cold call space. Now we'll be going doing that continually ourselves as well. We are not the one one trick pony. We'll be pushing one avenues, but very clear that partnership approach will help us grow to that point too.

1:15:19 Great. There are there's a handful of questions that are primarily about when we're going to become profitable because, clearly, we are, if not unprofitable, only marginally profitable at the moment, and that's something we we signaled in advance. So what can we say about when what will need to happen and when we will be profitable again? Yeah. It's a good question, Chris. I I was wondering if you were going to answer it. I'm very happy answer it. Mean, we we we we're quite yeah. I've gone, Chris. For your question. Well, I think it's a very simple answer to this question. If you look back to the last Capital Markets Day in April last year, we put up a chart that explained how our cost base would change and behave as the business grew.

1:16:06 And apart from the direct costs, which, you know, and our gross profits are north of 80 percent, it doesn't change a lot as we grow. Conversely, it doesn't change a lot if we don't grow if we shrink, and that's the nature of the operational gain we have in the business. And therefore, the answer is we will become profitable when we move out of the current revenue range given that we're marginally profitable today. It's that simple. Great. And I think we might have time for one more question. Let me pick one here. Trying to avoid the repeat questions or things that are overlapping here. Oh, yes. How one for John Evans. How do you measure the return on investment on your fame building activities such as Wise Up?

1:16:56 Yeah. Great question, actually. Well, I tell you the answer to that. It's quite interesting because, again, I've got to be careful what I say. But WiseUp is funded by our partners. So what's lovely is our customers are actually paying us to do the kind of research that they then want to talk about. And we do we do track all inbound inquiries. We track, we track, you know, kind of customers that we run through it. And if I take WiseUp, WiseUp is part of our feeling seen range of, studies in diversity, which are our good friends at ITV have been funding and supporting and and helping publicize, which has been amazing. And if I test to take The UK, we are now working with a number of major grocery brands, a couple of major UK based banks as well, and those all came through the Feeling Seen series.

1:17:45 So the reason I'm not saying Wise Up is Wise Up only launched last month, so I wouldn't expect to see anything from Wise Up. But what I do know, and this goes back to John's point about the length of time from fame to acquisition, we're winning customers today that first talked to us two years ago when we did our Feeling Scene study for the very first time. So these things do take time, but the scale of them, the number of them coming at the moment is growing. So, yeah, we we do we do track it. But we're very fortunate to have partners that are willing to invest with us to make this work. That's great. John, and to the rest of the team from SYSTEM1 GROUP, thank you very much indeed for your time this afternoon. And thank you once again to everybody for your questions and your engagement this afternoon. And for any questions that we haven't managed to get through, we'll make those available to the company post today's meeting.

1:18:31 James, I know investor feedback is particularly important to you and to the rest of the Board. And I'll shortly redirect those on the call to give you their thoughts and expectations. But I wonder before doing so, if I may, just ask you for a few closing comments, after which I'll redirect investors to give you their feedback. Sure. And thank you all for coming today. I hope you found it useful. We're looking to a really successful year ahead. I think as we've mentioned a few times on the call, it's all about execution. That's where we're going to be focusing, and that's where we're going to be judging our results. So we look forward to seeing weeks to come. Please do share the feedback. And, if you want to reach out to us as a team as well, please do come through the normal channels. We look forward to seeing you soon. That's great, James. And to the rest of the team from SYSTEM1, thank you very much indeed for your time today. Can I please ask investors on the call not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order the company can better understand your views and expectations? This may take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team, SYSTEM1 GROUP PLC, we'd like to thank you for attending today's presentation.

1:19:31 Good afternoon to you all.