YouGov

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YouGov is a British internet-based market research firm. It was launched in May 2000 by Stephan Shakespeare (CIO) and Nadhim Zahawi (CEO). It is a member of the British Polling Council.

YouGov is chaired by political commentator Peter Kellner, who was engaged in December 2001.^[1]

When YouGov floated for £18million in April 2005, Kelner owned 6% of the company.^[2]

1 Methodology
2 Accuracy
3 Criticism
4 Business
5 Market Place
6 References
7 External links

[edit] Methodology

YouGov's methodology is to obtain responses from an invited group of Internet users, and then to filter these responses in line with demographic information. It draws these demographically-representative samples from a panel of more than 150,000 people in the UK.

As YouGov's online methods require no field-force, its costs are lower than competitors that employ traditional face-to-face or telephone methods. YouGov has exploited its cheapness and speed to conduct more polls for newspapers and television programmes than any other organisation. Its media clients include the Daily Telegraph, Sunday Times, The Economist and Sky News.

Panel members, volunteer members of the public, are credited with 50p-£2 for each survey they complete (they are sent a cheque when the amount accrued reaches £50). In addition there is a monthly prize survey, the completion of which enters the member into a prize draw, and other occasional prize surveys.

[edit] Accuracy

YouGov has contended that its opinion polls in recent UK elections, e.g. the 2001 general election, have been consistently more accurate than traditional opinion pollsters who repeatedly over-estimated the Labour vote.

This pattern was repeated during the 2005 general election campaign, when most traditional polls reported Labour's support in the range 38-41%, compared with the 36% it achieved on polling day. In contrast, YouGov's nine polls during the final three weeks of the campaign all showed Labour on 36 or 37%.

NOP (published in The Independent) were the most accurate pollster in 2005 - their final poll got the result exactly right. YouGov were, for the second election running, very close to the result, however.

[edit] Criticism

Critics argue that, as around 40% of the public do not have access to the Internet, its samples cannot accurately reflect the views of the population as a whole. YouGov counters that they have a representative panel and they are able to weight their poll/surveys appropriately to reflect the national audience that they are aiming to poll.

It is a function of their internet panel approach that YouGov isn't able to pick up turnout factors to the same degree as other pollsters and they exclude it from their methods. However, traditional polls use widely differing methods to take account of turnout, and these produce equally varied "corrections" to the raw data. No consensus has emerged as to what, if any, "correction" has greatest validity.

[edit] Business

UK revenue rose +65% on an organic basis in 2006. The net margins are amongst the highest in the industry, 40%, compared to the usual 10 - 30% range that most of its compeititos produce. The profits before tax (PBT) increased more than 300% from £1.0 (2005) to £4.1 (2006).

YouGov opened an office in the Middle East in 2005. The Middle East business has grown from a standing start to the same size (£4.5 million revs in 2006) as the UK business. YouGov has previously conducted polls in the USA and Canada, and the company has stated that it has plans for further international expansion.

YouGov plc, annnounced in December 2006 that it has committed to make a significant strategic investment in the USA, via Polimetrix, Inc., an online political and social research agency founded in 2004 by Stanford Professor Douglas Rivers.

Under the terms of the transaction, YouGov will purchase a 32% interest in Polimetrix, based in Palo Alto, California, for $7.5 million. At closing, YouGov will also have an option to purchase the remaining outstanding shares and options of Polimetrix, within 30 months of this announcement. The initial consideration will be met from the Company's existing cash reserves. The Board of Polimetrix will be made up of 5 directors including two YouGov representatives Nadhim Zahawi and Stephan Shakespeare.

The funds from this investment will be used to bring YouGov products to the American market and to expand Polimetrix's capabilities through the cross- licensing of technology and intellectual property as well as a joint selling arrangement which will allow YouGov to sell Polimetrix's products internationally, excluding the USA and Canada, and Polimetrix to sell YouGov's products, including BrandIndex(TM), in the USA and Canada. The Board anticipates that the investment will be earnings enhancing in the first full year of ownership.

[edit] Market Place

In the UK, around £1.2bn is spent every year on market research. Just over a tenth (£150m) of this is online market research. This is expected to grow ataround 30% per annum based on the USA experience. European online research growth was 31% in 2004 (ESOMAR).