BrainJuicer Group - A No-Brainer?

Summary

  • Innovative market leader in Behavioural Economics and Emotional Advertising.

  • Strong US growth despite congested market.

  • Liquidity issues raise questions.

Who are BrainJuicer (AIM:BJU)?

BrainJuicer Group PLC is a London-based market research company. It was founded in 1999 with the aim of reinventing market research, and has been listed on the Alternative Investment Market (NYSEMKT:AIM) of the London Stock Exchange since December 2006.

BrainJuicer's business model focuses on taking concepts from behavioural economics, psychology, and decision science and applying it to marketing, branding, and research. In the words of founder and 'Chief Juicer' John Kearon;

"Market research at its best is mind expanding & profit enhancing. At worst, it's a 120 page insurance policy heavy on numbers, light on insight and usually dead on arrival."

BrainJuicer attempts to make market research "mind expanding & profit enhancing" rather than merely dull and technical. Though this is only a qualitative judgement, the company is widely heralded as the most innovative in the industry, winning numerous awards. Provided it keeps to this reputation, it will likely be capable of tackling the constant and rapid dynamic changes facing the market research industry.

At the forefront of behavioral research, it regularly outputs research connecting modern psychological advances with their market applications. Building upon the work of Nobel winning psychologist Daniel Kahneman among others, BrainJuicer disregards the standard industry metrics and instead studies quick, emotional and instinctual responses, dropping the questionable assumptions economists make about human rationality. Are we strictly logical beasts? Or are we ruled by emotions and ultimately lacking in the time or effort to extensively consider every decision? The answer is clear for all to see, argue BrainJuicer.

Experts in all things viral - look no further for the force behind Three's famous dancing pony TV advertisement - BrainJuicer believes three F's lie at the key core of advertising success: Fame, Feeling and Fluency. Fame addresses how readily a brand comes to mind without prompt in a consumer decision, Feeling considers if people hold any emotional preference towards a company and Fluency covers how recognisable a brand is. Using these factors, a rating is assigned regarding the current strength of a client's market position, with 5 stars being awarded to those in prime position and entitled to the label of 'Famous'. BrainJuicer claim that with the current models they've built from the three F's, they would have been able to predict Tesco PLC's declining share price in 2014.

In the ever changing advertising landscape, new challenges regularly arise. The latest obstacle for companies is Ad-Skipping, not to be confused with Ad-Blocking software; a different challenge entirely. Skipping can be any behaviour where the viewer watches the start of an ad but doesn't make it to the end for whatever reason. These challenges are very much from the 21st century, so ancient marketing concepts prove ineffectual in tackling them.

This is where the company's adaptability sets it apart, behavioural research offers ready solutions whereas typical theories have no answer to brand new problems. For example, when researching a pet food advert directed at a YouTube audience, they discovered that a well placed puppy bark at the fourth second of an advert made a watcher less likely to skip the advert, an option that becomes available from the fifth second.

BrainJuicer offers companies Brand Tracking, Strategy and Execution based on their System-1 inspired operating system. There is now also an increased emphasis on the company's innovative quantitative products including Predictive Markets and FaceTrace which test concepts and measure emotional responses to various communications to consumers.

As seen below, BrainJuicer is starting to consolidate itself as an international player in a market dominated by larger orthodox companies that are slow to react to new pressing challenges in the industry. The company's international expansion will only continue as ...

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