LBG Media plc (LBG) Earnings Call Transcript & Summary

Good morning, and welcome to LBG Media's 2023 full year set of results. Well, I'm Solly, CEO and Founder, and I'm joined by Richard Jarvis, CFO today. I'm going to take you through some strategic and operational progress that we've made throughout 2023. And then I'm going to hand over to Richard, who's going to take you through the financials. And then finish up with me just to give you a bit of a snapshot on the presentation that we're taking you through today. So I'm very pleased to be here today, giving you some positive updates on the progress that we've made both in the short term and also beyond that point. We have an ambition to be a global powerhouse for young adults. And in 2023, we made some real progress and steps and laid the foundations to ensure that we can achieve that. And one of those things that we did is make a step-change acquisition. We acquired Betches, a market leader in the U.S. for Millennial and Gen Z women. We had a positive revenue momentum picture and also strengthened our management team through bringing the likes of Richard Jarvis on as CFO, our CRO and many other team improvements that we made. We grew our revenue to GBP 67.5 million, which is up 7.5% year-on-year. And that's the 12th year in a row that we've grown our revenue as a business. Our EBITDA grew to GBP 17.4 million, up by over 10% year-on-year, again, another positive upward trajectory. Our customer base continued to grow, and we also continue to build more depth with them. Our repeat customer base is now up to 75% year-on-year, and we're also seeing that we're having bigger relationships over longer periods of time and continuing the strength of work that we're doing across our sales team and also through the audience growth that we're building as market leaders across that. Our U.S. audience is now up to 141 million, and that's been strengthened through the acquisition that we've made of Betches in that U.S. market. Our viewership and engagement continues to tower over household names in the market. Whether that's the likes of Disney or more locally businesses that we know and love here. We're up to 128 billion views, which is up 30% year-on-year. And just to put that into context, that's 15x the global population. Our global audience base is now up to 452 million, which most notably puts us in market-leading positions in key markets for us in the likes of the U.K. and the U.S. One of the things that I mentioned before was the progress that we've made, both in terms of the short term, but also beyond that. And I'm very pleased to talk to you today about our clear line of sight. We now have a clear line of sight on how we can grow our business to GBP 200 million. And one of the things that is underpinned by is our ambition. We have an ambition to build a global entertainment powerhouse for young adults. And that's driven by our mission, which our mission is to give the young adult generation a voice by building communities that love, think and act. And for me, and I know our team and our audience, that's something that we're all very passionate about. We have the opportunity to put a smile on people's face to millions and millions of people when they're having a bad day, but we also have a big responsibility in society beyond that. And we have four key pillars that we're focused on in driving that, which are mental health, the environment, protecting women and girls and also giving a voice to underrepresented communities. And that is something that helps us engage and drive that audience base but also attract the best talent in market and work with the biggest blue-chip brands. We also have a team structure and a team that enabled us to drive towards that GBP 200 million. And we've made a number of improvements on that over the years and feel very good about that progress that we've made. So just taking you through how we see this, starting from the macro picture, we operate in the largest and fastest-growing parts of the advertisement industry. When we started out, the digital advertisement market was under 1/3. Fast forward to now, it's gone up to three quarters and dominating the market, and we're operating in the fastest-growing segments of that and the digital advertisement market alone is forecasted to grow at over 9% in future years. If we drill down into the areas that we're focused in, we're looking at the U.S. market and through the expansion, both organically and inorganically with the acquisition of Betches, we're tucking into what is a $300 million plus digital advertisement market. The U.K. market over GBP 25 billion. And then there's other markets that we're operating in, such as Ireland and others. If we then drill down into the types of business that we do. We do direct business, which is working directly with blue chip advertisers for them to access our young adult community. And then indirect, which is us putting our brands and content on platforms such as Facebook, YouTube, Snapchat and others. We are very focused on being market leaders among young adults. We want to be the best in the world at doing that. And when you take all of those different segments and put them together, we have a target addressable market, which we believe we can go after $6 billion. And in terms of our clear line of sight, we can see up to $200 million and how we can get there, which would be around 4% of that market. So how will we do this? We're set up internally to point at each of these different opportunities to get to that line of sight. Across our direct business, we have our CRO, Tim Pearson, and we believe that we are in a fantastic position with our growing audience that I mentioned before, 450 million, to continue to take market share from traditional players that are not engaging the audience bases that they have done previously and building on the strength that we have through the products and capabilities that we can offer blue-chip advertisers to connect with those young adults. We're also building deeper relationships. Initially, we started out with a small handful of 7-figure plus relationships. We're now growing that base out. We have an ambition to grow that to more 3 million plus and more 5 million plus eventually and become an extension of the marketing teams and the clients that we work with by driving significant value through that young adult demographic. The other part is our indirect business. So this is managed by Ben Elshaw, our COO. And we're looking to build and grow our audience base even further across existing platforms and brands that we have, but also expanding into new platforms that we're not yet tapping into and also grown out into new mediums, such as audio and podcast. We are very well positioned to build deep and meaningful relationships with those platforms. There's more eyeballs than ever looking at mobile phones, and there's also more competition than ever for apps within those mobile phones fighting for attention, whether that's Instagram, TikTok, YouTube, Spotify, the list goes on. And we're very well positioned with the content that we create and the engagement and the size and scale of it to be a key partner for all of those players in the market, and that is our ambition. The final one is our U.S. expansion. This is the largest advertisement market in the world. And both our organic business that we've grown out there, combined with the acquisition that we've made with Betches, we can see a significant direct and direct opportunity over there. And in the short amount of time that we've been operating in the market, we can absolutely see the opportunity to grow and build that and have made significant steps towards it. And then on to why we're different. We're uniquely positioned in market to win, whether that's innovation, something that sits at the heart of what we do. Since inception, we've been disruptors in the market. We were one of the first people to see Facebook as an opportunity to grow an audience and monetize that. And we've continued that across Instagram, Snapchat, YouTube, TikTok and many others, and we will continue to do that. Other areas that we're starting to embrace beyond moving from Millennial, Gen Z and also thinking about what Gen Alpha may look like in terms of entertainment. We are embracing AI and the innovation that comes with that. We're part of a small number of partners in the U.K. that are enterprise partners of open AI working closely with them to understand how we can really tap into those capabilities in helping us engage our audiences more and also provide more value for our clients. From a brand equity perspective, we have household brands. When you go into the street and ask someone if they have heard of LADbible, Betches or one of our other brands, quite often you met with the big smile. We are very well known. We've invested in our brands, and we will continue to do so. And I think another testament to that is some of the A-list celebrities that we work with. Last year, we worked with the likes of David Beckham, Ryan Reynolds, Ryan Gosling, Maya Jama and many, many more A-list names. And they've come to us to access our brands and our audiences that we've created. Many of these celebrities, as you know, are paid big fees just to appear for a very small amount of time, they come to us. The next one is diversity. So for us, diversity sits at the center of what we do, whether that's our diverse teams, our diverse revenue streams across direct and indirect, our customer base, which covers different sectors, all the way through to the different platforms that we operate in, making sure that we have solid foundations for growth moving forward. And then the next one is relevancy. And I've touched on this before. For us, we've built true relevancy amongst our brands and audiences, and we're relentlessly thinking how we can continue that journey as we move forward. I think you saw in the video there, Rishi Sunak using our platform to announce a change in law. That just gives you a flavor of the relevancy that we have amongst those young adults, and we will continue to do this moving forward. So I'm just going to take you through some operational progress that we made throughout 2023. The first is our Australian and New Zealand business. Now this started as a challenge. We spotted our revenue and profit was decreasing in that market. So we stepped in very quickly and acted and came up with a solution to turn that situation around. And the first step that we made is centralizing our indirect business over there to our center of excellence in Manchester. And we did that, and we've done that effectively. The second is we implemented a partner who represents us in market as a sales house, who's a market leader in that space, Val Morgan. And we've implemented that partnership, that's now up and running. And the early signs are that's working very well, giving us a more profitable, efficient and effective operating model. What we can see is if this is a success, we will absolutely look to scale this out across different markets, both with Val Morgan but also potentially other partners tapping into the 450 million global audience base that I talked about before. The next one is our U.S. expansion. The U.S. has been a huge opportunity for us for many, many years. And when we IPO-ed the business, it's something that I talked about, we have over 100 million people in the U.S. who consume our content and are part of our audience space. So last year, we set out to build the team, and we made some real progress in that market, growing our audience base, localizing what we're doing in that space. And again, working with some fantastic celebrities and names in that market to really localize and build our voice across that country. We also focused on commercializing. So we started and engaged a number of conversations last year, which started to pay off, but also those conversations that we have had are now starting to come through into this year. We're working with the likes of Apple, Mars, Peacock and a number of other big brands. And what's also exciting about this one is with the acquisition of Betches, and the two coming together in that short space of time, we've already started to win joint business. And we're looking to build the one-stop shop for people, big brands and advertisers to access young adults in that market. So we've already won a 7-figure deal between the two businesses within that short space of time. So just moving on to Betches and the acquisition. For those of you that aren't familiar with Betches, Betches is a market-leading brand for young women, Millennials and Gen Z. It's a very exciting proposition that spans across social, podcasts, events and merchandise. So it's a multifaceted business. We're very excited about having it as part of the family. One of the things that we already feel even better about is the strong cultural fit. We were optimistic beforehand. But as we've worked closer with them over the past number of months, we feel even more encouraged by that. We have a very similar entrepreneurial mindset to us. They're ambitious, and they're absolutely aligned to the direction of travel of where we want to go in terms of building that market-leading position in the U.S. They've got an earn-out that incentivizes them to move in the same direction as us, which is U.S. revenue growth. And also from the early days of performance and integration, it's going well. Last year, they grew by 17%, strong position and are working with big blue-chip brands that we can see an opportunity to really grow and build more debt in. The final one from me before I hand over to Richard. So we've got an extremely important part to play in society. We've got a big voice. We speak to a lot of people and therefore, we have to use that voice responsibly. And we work across these four areas that I mentioned before, mental health, the environment, protecting women and girls and given a voice to underrepresented communities. Last year, we made some real progress across this. Whether that's the day-to-day stuff that we do from our journalist work through to video creators and partnered with some major charities in bringing these initiatives forward, tackling things like suicide, giving opportunities to represent a community through working with the likes of underrepresented communities, through working with the likes of Stormzy. So this is an area we made real progress, and we'll continue to and sit at the heart of the business.

Thanks, Solly, and good morning, everyone. Great to be back here. For my first full set of annual results with LBG and talk you all through our financial progress for 2023, which was driven by those strategic moments that Solly talked about as well as the collective effort of the team. Firstly, I'm going to start with a reminder. A reminder of our diversified revenue model and how we're monetizing that growing audience and that unique level of engaging content that we have. So as a group, we've got two main routes to market, Direct and Indirect. The direct referring to where we've got a direct commercial relationship with the advertiser. And that involves the creation of bespoke content for brands who want to reach that substantial audience of young adults that we have across all of our platforms, including social, web, podcasts, to name a few. Last year, Direct accounted for 43% of our revenues, and we're continuing to work with a growing roster of blue-chip clients and crafting impactful campaigns as part of new partnerships in the year, including big brands such as Nike, The AA, Jacamo and Nando's. We're producing content that reaches and engages with that large young adult audience in an authentic and targeted way with analytics and insights that demonstrate strong ROI for these brands, and that sets us apart from those traditional players. Moving on to indirect. That refers to where we've got an indirect relationship with the advertiser and accounts for 55% of group revenue in '23. You'll all be very familiar with display adverts on platforms such as Facebook, Snap and YouTube. And in this case, the advertiser is contracting with the platform themselves, such as Meta or Google, who in turn are placing ads over our content with their own targeting algorithms. And for the ads that are inserted against our content over our audiences, the revenue is shared between them as the platform and us as the publisher. We think that having that capability to drive revenues from our audience reach and content via both direct and indirect channels, gives us as well as being a differentiator, multiple leaders to add both stability and drive growth opportunities. From moving into revenue for the year, which grew 7.5% to GBP 67.5 million. We saw positive momentum across both our direct and indirect businesses, which came in the face of some challenging market conditions, particularly in Australia and New Zealand. That revenue performance supported by increased activity over the year with both new and existing clients. And if I strip out the impact of Betches, organic growth was around 4%. But separating that Australia and New Zealand challenge, which we've now addressed, this number would have been over 8%, highlighting the strength elsewhere in our NGOs. On a pro forma basis, revenue would have been GBP 78.8 million, reflecting the annualization of the impact from Betches and provides a clear pathway to achieving our market expectations for 2024. From a personal perspective, although 2023 wasn't without its challenges. Our positive momentum is a testament to the work that the team have done during the year and present exciting opportunities ahead. Drilling down now into direct revenues, which grew 5.5% and to GBP 29.3 million. I've already referenced some of those challenging conditions seen in the wider market through '23. But our positive growth is testament to the strength of our differentiated offering that's increasingly resonant in the marketplace. And as Solly said, around 3/4 of that direct revenue has come from clients that we've worked with on a repeating basis, reflecting the depth of that client relationship as well as the effectiveness of our offerings. Our brief conversion percentage also continues to improve with our differentiation, increasingly proving itself against traditional players, our joint approach in the U.S., providing us with great platforms for growth that's already being evidenced with those joint wins, including the 7-figure deal that Solly has mentioned. Moving next to Indirect. That was an impressive increase of 10.4% to GBP 37.1 million. This was achieved through a 70-30 split between income from our social platforms, and web programmatic streams from our owned and operated websites. And in terms of social, it's very well known that yields from platforms have come under pressure over the last year, impacted partly by that shift to short-form video, which we saw in the second half of 2022. And year-on-year, that significant boost in video views, resulting from our own pivot to short form and our market-leading levels of engagement have effectively mitigated those yield pressures. On the web side of Indirect, our programmatic offering is bringing together advertisers and publishers to facilitate the buying of our inventory space on our own websites, and this now accounts for 30% of our indirect revenues. And in the last year, we've driven higher quality sessions and higher yields as we start to realize some of the benefits of the investments that we've been making in people and technology across our website. Having those indirect revenues coming from both our social and web channels is a strong point of differentiation for us and with it, gives us multiple levers to drive that sustainable growth from our audience. Moving away from revenue and now on to costs. Costs in the year totaled GBP 50.1 million, which was a 5% increase over last year. But with the majority of that coming from Betches, which was acquired in October of last year. So on an organic basis, it was a much more disciplined cost program this year. Most of our growth was delivered on a relatively modest level of organic increase. And that's based on the business taking on really important disciplines after needing to walk back some costs within 2022. The most significant changes to our cost base came towards the end of the year with that improved operating model that we talked about in Australia and New Zealand with that revised approach meaning that Val Morgan Digital taking over our direct representation as well as the centralization of our social and web operations into the U.K. that removed cost from the Australia and New Zealand region with those benefits being redeployed in 2024. That's left us with a cost base that's better allocated across our geographies and much more aligned to our growth ambitions as we seek to drive further growth, most notably in that U.S. market. On an EBITDA basis, our adjusted EBITDA grew by 10.8% to GBP 17.4 million. This was off the back of that positive revenue momentum and effective cost management, the points that I've just covered. We continue to maintain a healthy margin of 26%, which is up slightly on the prior year. And adjusting for that reduction in year-on-year profit from Australia, our adjusted EBITDA would have grown by over 30% year-on-year, again, serving to highlight the underlying strength of our core business. And on a pro forma basis, adjusted EBITDA was GBP 20.1 million, reflecting, again, the annualization of the impact of Betches and that pathway to achieving our market expectations for this year. And lastly, before I hand over to Solly, I'll just talk through our cash position, which at the year-end was GBP 15.8 million, down from GBP 29.3 million at the end of the previous year, with that reduction due primarily to the acquisition of Betches. Those acquisition amounts totaled GBP 17.6 million net of the cash we acquired, but we delivered a cash flow pre-adjusting items of around GBP 13 million alongside an adjusted cash conversion rate of 76%. That seasonality does mean our Q4 profits convert into cash in Q1. And I'm pleased to report that as like yesterday, our cash position was over GBP 6 million higher than the year-end position at GBP 22 million. That current position and the cash-generative nature of our business provides that level of substantial support for both our organic and inorganic growth ambitions. And with that, I will hand back to Solly.

Thanks, Richard. So just to finish things off before we hand over to Q&A. A few key points that we've mentioned across the presentation. So 2023 was a real year of progress for us across both the short term and also the line of sight moving forward. We made a needle-moving acquisition in Betches to really move our ambitions forward in the largest advertisement market in the world. We took quick action against challenges that we faced, an example of that being Australian and New Zealand one and turned it into an opportunity. We have a clear line of sight to GBP 200 million of revenue, which is 4% of our target addressable market. We are the U.K. market leaders for young adults, and our grown reputation with that is seeing progress across our client base, and we're starting to see this across multiple different geos from an audience basis. We generated record audience growth and engagement. I mentioned before, over 450 million audience and also 130 billion views. We made a good start to 2024, and our revenues are in line with current market expectations. We've got confidence in the size and opportunity that we have ahead and also a clear line of sight on where we go with that GBP 200 million. That's all from me. So I'm going to hand over to the [indiscernible] team who's going to get the mic around. If possible, could you keep it to one question at a time.

And to the first question [indiscernible]. Can you talk about [indiscernible] what does the pipeline look like in terms of [indiscernible]?

Yes. No problem. So I think one of the things for us is the piece around growing more depth with our client base, that's been a big focus for us over the past couple of years. How do we become an extension of our clients' marketing team. So what we're seeing is, as we're growing and expanding our capabilities and show more strength across those young adults, we've seen that our client spend is increasing across the existing customer base and the return on client base is growing. So we've continued to see that into this year. And when it comes to the market growth, I mentioned 9% forecasted growth moving forward. We believe that we're well positioned to grow into that, but also as well, take market share from some of those traditional players that have windowing audiences across our demographic.

Okay. And the Betches and LBG joint wins that you've had so far, can you just give a bit more color around that? Do you start to go through the agencies? Or are you winning these directly from the brands and you having Betches on board, has that made it easier for you to get on to the white list of the agencies because that was one of the things, I guess, it was needed to grow the U.S. business?

Yes, absolutely. So we're finding that in the U.S. market, client contact directly is extremely important. We have that here, and we operate both across agency and client. But because of the size and scale of the market, getting senior contacts within clients over in the U.S. is extremely important to winning business. And we've seen that across those brands that I mentioned before, Apple, Peacock, Mars. We've got good contacts on a senior basis. And I'd say the Betches acquisition has certainly given us access to a whole new set of clients that we weren't talking to previously. And what we can do is we can share our insights and learnings on how we can consult service and help clients drive results across those young audiences to help further and deepen those relationships that they already have. Just one more quick one on that one is I met a business out there in the states a couple of weeks back that generates around $100 million of revenue. And I spoke with the Betches team and just asked them what do you think the difference is between us and them from a product perspective. They actually believed our product was better. So where we got to was what's the difference between us and that $100 million in that market. And the key thing was developing our sales team and client relationships. They've got a great sales team in place, and we can develop and grow that along with building deeper relationships with those clients. So it really is an opportunity.

And just a third one. Web programmatic seems to have done quite well, unlike some of the U.K. peers. Can you just talk about -- give us a bit more color there and just talk about the investment you've put in that area?

Yes. So I guess taking a step back, one of the key things for us has been making sure that we've got a diversified set of revenue streams. On the direct side, we have a wide array of clients, across different categories. And then if you home in on the indirect side, we've got a nice split of revenue across different platforms but also homing into this as well as our platform revenue. We've also got our web revenue. And last year, we actually saw a 30% increase in yields across the work and investments that we made, both from a tax standpoint, also working harder on optimizing for our partners and clients across our websites. And yes, we're making an investment into content creation into the sales and also ability to monetize that inventory in a far better way. So we're in a strong position on the website, and we'll continue to invest and grow that part of our business.

Alastair Reid from Investec. So my first one. Just on your sort of new sort of revenue aspiration and the clear line of sight. Can you expand at all on the sort of acquisition contribution that you would sort of factor in, and get into that? And any areas of focus that we might think about there?

I can take that one. Yes. I think we -- to the point of that GBP 200 million line of sight that we've talked about this morning, we've been deliberate on the time frame of that because what we've got in front of us is a destination and a clear plan as a management team of across those lenses of direct, indirect and U.S. expansion that we talked about a path. And a destination point, as I said, that we can achieve that. That will undoubtedly come across a number of different lenses. We've got organic growth capability and that momentum. And M&A, as I said in my presentation around our firepower for acquisitions from our cash generative model, debt-free basis. We'll undoubtedly form part of that. And the different levels are going to factor into the ultimate time period in which we hit it. So absolutely will form a factor, but quality rather than quantity is more important for us.

And second, if I may. Can you talk a little bit more about the operational gearing that you see in the business, either at the group level or sort of within the two main divisions and what variable cost accompanies revenue growth? And I guess, to a related sort of point to the first question, if you're at GBP 200 million of revenue, would you think you'd have a higher, lower or similar margin to what you have today?

I'll take that. It's a good question. I think we've outlined that, the size of that estimated addressable market. GBP 200 million as Solly pointed out was 4%, 4% of that market share. So getting to that is a way point to growing. So as our growth business opportunity of becoming that global powerhouse for young adults. We would be in a model for continuing to grow as opposed to a mature model where we capture all that leverage. So I think that's not the ultimate endpoint for the business, but they're undoubtedly will. There'll be some leverage, but we're investing for growth as well. Certainly, the comfortable maintaining the margin outlook.

And then sort of one last one. Obviously, you talked about this new model here in Australia and New Zealand. Any plans to actually use that in new markets this year specifically? And if so where potentially?

I think it's probably too early doors to say that, I think for us, we want to see how it plays out to see if this positive start continues, which we feel confident in. But as we see that play out, we have had some early discussions about the wider APAC region and how we may look to partner with Val Morgan on that if we see this positive start continue.

Can I just add to that as well. It's similar to our M&A, my M&A answer of quality rather than quantity. We've got a specific set of metrics and diagnostics to measure the success of that. We've had a strong start to it and having those discussions, but we'll still take a very focused approach on finding the right partners and doing it for the right opportunities.

It's Fiona Crawford-Williams from [ Medicine ]. Can we just dig a little bit into H2? And then obviously, there are a number of factors that were impacting in terms of yields and the specific situation in there. Could you just break that down a little bit for us? And in terms of the yields, what the situation is going into '24?

Sure. So yes, in terms of H2 specifically, we had a number of factors, and as you said. Our strategic assessment of the APAC business meant that we took swift and sort of deliberate action to resolve that. So that we moved into this year from a solid foundation of strength being able to redeploy those investment levels into our growth opportunities. We could have taken a different approach and arguably would have got a higher revenue outcome for last year. But the most important thing for us as a team was to address the challenges head on as opposed to just offset within the rest of the business. So we're really proud with actually what we achieved in that regard as a team. In terms of the other aspects of yields, I think we certainly saw a mixture of outcomes across both web and social, as Solly said, which was a strength from our perspective because having that diversification across web and social allowed us to navigate and apply different levers. It was -- we were just coming into the lapping of the yields in short-form video, starting to see things stabilize, which to the latter part of your question is what we've seen continuing into Q1. So we're optimistic around finding the floor having been reached in terms of indirect deals on platforms, for example, with that further opportunity that we've got across our web yields, that Solly talked about.

And my second one is to do with Betches. Has there been things that you've learned from them that you've brought into the rest of the business?

Yes, I'll take that one. So they've got a really multifaceted business. As I mentioned before, they've got really strong podcast and audio base. They've got some great events, and I'm very fortunate to attend one of those when I went over, which is brilliant. I was one of the only males in the room, but it was a brilliant event to see and just get an idea of the quality and work that they're putting outside of what we see on social. And yes, there's a number of areas that we can absolutely learn from them on, I just mentioned a couple of podcasts, events, merchandise, but also as well, I think that demographic they are market leaders in that demographic. We have a big cohort of them across the group. So I think we can learn across that. And then, of course, the U.S. market is a new market for us. So they've got a number of people who are experienced in that market that we're learning a lot on, and that will be the catalyst to helping us expand across that too.

And with the LADbible brand, you've got brand extensions. Is there a similar way that you can extend the Betches brand? Or is it sufficient on itself?

Yes. So they actually have a number of some verticals within where they cover, whether it's entertainment, relationships, comedy, news. They're actually in the White House visiting the VP a couple of weeks. But through Betches news and the coverage there. So they've got a wide array of different genres within the Betches brand. And yes, tap into different demos within that. So...

[ Bradley ] from Stifel. I do actually only have one question. And can you help us understand the potential implications on the industry of probable, possible, I don't know, changes to the ownership of TikTok in the U.S. What does that mean for you? What does that mean for the other social platforms? Just sort of, yes, generally speaking.

Yes. I mean it's -- the bigger situation is obviously definitely politically charged. And there's lots going on a high-level basis way above my pay grade and on that basis. So how that plays out, obviously, I think we just have to go with whatever happens. In terms of the impact for us, younger audiences are still or audiences as a whole are still going to want to consume that kind of content. You really seeing how the space is kind of diverging towards short-form within and almost a TikTok type style and matter of actually really what they gave in this space, you can see across Instagram and indeed [indiscernible] Facebook, where short-form content is sitting at the front and the same with YouTube. So I think the audience will just migrate elsewhere if they can't access it through TikTok, and I think that will be the situation. Now we're well positioned to just divert our commercial relationships through to those audiences across the likes of Instagram and other areas. So I don't believe there will be a commercial impact to us. It will be a shame because we spent a lot of time building out a strong U.S. audience base over there. But I think that will be the main thing that will be lost sort of the historic work that we put in there. So we'll see what happens. We're able to navigate that situation either way. But as I said, it's -- it will be interesting to see how it all plays out.

And just if I can add to that, TikTok as a platform doesn't form a material amount of our indirect revenue. So from a risk perspective, it's negligible.

It's Jonathan Barrett from [indiscernible]. I mean I have got three questions, but you'll be glad to see they are all quite straightforward and boring, actually. So the first one is just on the 7-figure deal, joint-deal you managed to secure. Can you just tell us about when that's being recognized, not quite sure if some fell into last year and some is coming in this year? Or is it all due to come in this year?

It's all at FY '24 deal. It's probably in too small a print on the deck. But those key deals that Solly mentioned, the joint bids will realize across this year.

Terrific. And then just on the organic growth for this year, that 9% number. Can you just give us a steer for what comes from where. I suppose you could split it by indirect and direct, but maybe there's a little bit more granularity you can add to that by brand, by location, just to give us kind of a feel for how that develops?

I think that's probably a level of granularity that there's a bit too much detail going, go through brands, et cetera. As we see it broadly across those lenses that we talked about before of direct, indirect as well as U.S. expansion. And broadly, we're seeing that opportunity grow evenly across those right now.

Okay. And then just my last question. Just obviously on the video business. Can you tell us how much revenue you generated from video last year?

From -- so if you look at the indirect in total, including -- included in the web programmatic stuff, that is largely driven by those video views, the 128 billion of views over the year. So the indirect space is primarily that certainly 70% associated with associated with those with video.

It's Ciaran Donnelly from Berenberg. First one from me, I guess, do you have a sense of that 6 billion addressable market and what it grew year-on-year versus last year?

Yes, I'll take that one. I think with the acquisition of Betches, obviously, that is a number that we have gone through and we've looked across those key markets, whether it's U.K., U.S., direct, indirect, and we've done an in-depth piece of research outside to really home in on what we believe we can go after. So definitely, with the acquisition of Betches that we made, we felt that, that target addressable market became more sizable. But in terms of specifics, growth year-on-year, we don't have that.

Okay. Then maybe if you look at the digital ad spend growth year-on-year that you have in the deck, it's 9.2%. I think your organic ex-ANZ, it was 8%. So I guess, what do you think is the reason why you grew less than the market?

I can take that. So I think, against that -- against those two specific data points that you had, we talked around geo challenges that we had specifically in our APAC market, which resolving with the pace that we did, suppress our growth opportunity a little bit. And in terms of the other core geos of where that underlying 8% was, I think that is probably more I guess, a timing aspect around some of the challenges we saw around those yield pressures for us as well as Q4 generally.

And then maybe the third one, could you just quantify the contribution from the Euros and the Olympics for this year?

Yes, I'll kind of talk to that one. So I think for us, we're very focused in on building more depth with our cloud relationships where we have more always on. So if we have an annual relationship and actually a client will be doing activity around the Euros, Olympics, if that's an area that they want to be culturally aligned to. So naturally, we'll end up picking up that spend by that. So I'm sure it will be positive, but I would say that we're becoming less and less specific events driven and more focused on longer-term deeper client relationships where whether it's around Christmas or a cultural event like that, we're always on across the year, and we're looking to build those in a much bigger way.

And then just one final one, just a clarification. The Betches 17% growth. Was that all organic?

Was that all organic for Betches?

Yes.

Yes. The Betches business structurally pre acquisition has always been organic growth for them. We never took any investment.

Sorry, one more. Sorry, within direct, how many clients do you have roughly? And is there a big SKU/concentration of the revenues from a small group? Or is it sort of broadly sort of similar? What typically -- what a client is paying?

We have a broad range. As we -- Solly talked around, those key reasons why we win different diversity is an important part of that. So we're across a broad range of clients and sectors within those clients and Betches, as I guess, added further diversity to that in some of the segments that they focus on, such as more of a leaning towards beauty and leisure, I guess. In terms of total number of clients, I don't know if that stat to hand...

If you don't mind me jump in. So I'd say [indiscernible] on the tone, so I'm not going to. But I think for us, no client is sort of over, say, like a 10% concentration, I think, probably sort of more towards lower than the 5%. So we've got a very widespread of clients for sure. We do over-index in some sectors more than others. So like entertainment, for example, whether it's -- yes, you're kind of streaming services or studios or other brands that sit within that space. We do very well. Sport again and brands I'd like to be around that again, something that performs very well for us. FMCG again. I think with all of these categories, we're literally sort of a very, very small part of it, but to the kind of GBP 25 billion digital advertiser market here in the U.K., we're only a very small part of that. So the opportunity for us is to become a bigger part of people's marketing mix and spend across a wider range of categories, but we're, as I said, we're literally touching the surface.