A series of internal changes has left market research and data analytics company Pureprofile (ASX:PPL) ready to benefit from the massive growth forecast for the sector. Industry revenue is expected to grow to US$274.3 billion ($386.6 billion in AUD) by 2022, up from only US$189.1 billion ($266.5 billion in AUD) in 2019, based on Statista data. Pureprofile is looking to tap into that rapid expansion under the direction of newly-appointed CEO Martin Filz.

“The core business is very strong and has a solid base on which to build,” Mr Filz said. “We are firmly in the right area of insights and are well positioned to take advantage of the client move to data being faster, better, and more insightful” he added. 

Pureprofile’s $18.8 million recapitalisation plan (unveiled on 19 October) will reduce the business’ existing debt burden – with the business’ existing lender coming in as a major underwriter  through a debt-for-equity swap. The restructure will also boost the company’s cash holdings by $3.5 million.

The business already has a revenue of $25 million and operating profit of $1.6 million. Despite these strong fundamentals, the company is trading at roughly 2 cents per share (price at 21 October, 2020), as hesitant investors fixate on a handful of past decisions which hurt the business’ performance. 

Its current market capitalisation of $2.6 million, as of 21 October, 2020 – well below that of similar other businesses, reflects the legacy issues surrounding the business as it completes its corporate turnaround.

Data revolution

With close to half the global population using the internet in 2020 (4.2 billion users), digital platforms have become crucial to the success of businesses. Deloitte’s 2020 Global Marketing Trends report noted 90% of the world’s data has been created in the past two years and trusted data collection and analytics is underpinning a “Fourth Industrial Revolution”. The global COVID-19 pandemic has accelerated this trend with KPMG now predicting 80% of revenue growth to come from digital offerings and operations over the next three years, forcing businesses to find new ways of connecting and engaging with customers.

Pureprofile’s first-party data acquisition software places it in pole position to capture new insights for businesses.

The company’s unique, self-serve software-as-a-service (SAAS) platform also allows clients to commission their own surveys – data from which is aggregated by Pureprofile to enhance the business’ own analytical abilities.

This system effectively works like a flywheel – as more clients join, Pureprofile gathers more data and gains more valuable insights into markets, making it more attractive to new clients. These additional clients will join more than 600 agencies, panel partners, brands and academic institutions already using Pureprofile’s services.

The way Cookies crumble

The changes come ahead of a seismic shift in the digital data collection industry, as Google looks to ban the use of third-party cookies from 2022 onwards. These plain text files are used by online advertisers to track potential customers across numerous websites and serve them ads based on the sites they visit and searches they make. Often, users will not even be aware these cookies are tracking them – nor do they know who planted the cookies or what the data is being used for. Google says its decision to ban third-party cookies represents a win for user privacy.

But detractors warn it could be a deathblow for many online advertisers, and competition watchdog the ACCC noting the changes will have implications for other businesses – “Including potentially for Google’s rivals in the ad tech supply chain which use data to assist in the delivery of targeted advertising,” a spokesperson for the ACCC told the ABC. The ACCC encouraged concerned parties to write submissions on the matter, the ABC reported. Mr Filz commented, “Although this represents a make-or-break moment for many data analytics agencies, Pureprofile’s use of first-party data acquisition means its business model is already aligned to the regulatory changes that are taking place and we are strategically positioned to deliver real value in this changing digital landscape”.

On Wednesday 28 October we have invited Pureprofile CEO Martin Filz to speak at a special live investor briefing. Martin will be discussing the changes to data security affecting all businesses, this globally established and profitable first-mover is ready. If you would like to attend you can book your spot here. 

Reach Markets have been engaged by PPL to help manage their investor communications

Sources:

• Google wants to kill third-party cookies. Here’s why that could be messy
• Google Chrome’s cookie ban is good news for Google — and maybe your privacy
• Deloitte Insights
• COVID-19: Accelerating digital transformation in uncertain times
• 5 Stats You Need To Know About Digital Consumers In 2020
• ASX announcement – 19 October
• ASX Announcement – 13 July
• Big data and business analytics revenue worldwide 2015-2022
• Big data – Statistics & Facts