Strategic Report Principal risks and uncertainties continued Risk Description Management actions Strategic continued The Group conducts due A due diligence investigation could fail The Group makes use of expert advisers diligence as it deems to correctly identify material issues and to conduct due diligence. In addition, warranties reasonably practicable and liabilities in a target business, or an and indemnifications are included in transaction appropriate based on the facts investigation could reveal a material risk documents and/or a W&l insurance is included. and circumstances applicable that the Group considers to be commercially Following each business combination a post to any business combination acceptable. Both scenarios could result in combination integration team consults with the new under consideration. Material the Group subsequently incurring business to implement its standards e.g. for financial, facts or circumstances may substantial losses. legal and tax areas. Finally, the Group integrates not be revealed in the due the newly combined company into its standard diligence and may surface monthly reporting cycle where (financial) risks, once the integration starts. if any are identified. As the Group has been The Group’s control systems and processes The Group has an Audit and Risk Committee and in established through and governance arrangements are still FY2021 appointed its first internal control manager. combinations, and the developing and any failure in these systems The Company is in the process of developing its Company was only listed on and processes or governance arrangements internal control function and securing internal audit the London Stock Exchange in could cause reputational issues and lead to provision from a large accounting firm. As noted in the 2018, the Group’s control loss of investor confidence, which in turn Executive Chairman’s governance statement, it is environment and governance could impact on the Group’s ability to raise currently proposed that the Company adopts the UK arrangements are relatively in external finance or the financial performance Corporate Governance Code in FY2023, thereby their infancy in comparison to of the Group. formalising the Group’s governance expectations. other listed companies, which could negatively impact on the financial position and prospects of the Group. Google, a key customer to us, As with many businesses in the We continue to move with the market and develop recently announced that programmatic space, a number of our long-term solutions to the ‘death of the cookie’. third-party cookies would be Data&Digital Media services that operate on Our efforts fall into three primary categories: blocked in Chrome by 2023. the open web or across apps and devices realignment of digital media and audiences around As a result, in the next were built to some extent on top of the so-called ‘Walled Gardens’, modelled measurement 12 months, third-party cookies third-party cookies and other identifiers. and attribution, and first-party data strategy. will become effectively Examples include programmatic audience Firstly, we are aligning our clients’ digital media and unusable for advertising activation, personalised retargeting, and audience strategy with that of large-scale ‘Walled measurement and many forms multi-touch attribution. These technologies Garden’ platforms such as Amazon, Google and retail of third-party data already would not work without persistent third- media, all of which allow advertisers to leverage challenged by GDPR since May party identifiers and, without changes, parts consumer data (specifically second-party data) at 2018, will cease to exist. of our business would have been scale and in ways that are largely unaffected by threatened. The Group has planned for the the ‘death of the cookie’. abolition of cookies to ameliorate the Secondly, we continue to invest in modeled change. However, further similar measurement and attribution inclusive of ‘top-down’ developments pose a risk to the Group’s econometric methods (e.g. Market Mix Modelling), business. ‘bottoms-up’ machine learning methods, and native platform tools such as Apple’s SKAdNetwork or Google’s Ads Data Hub clean room. The market broadly agrees there is no single ‘silver bullet’ solution to cookieless measurement, and so we believe our diverse and comprehensive approach will position our clients for success and minimal disruption. Thirdly, we are helping marketers build first-party data assets and increase the utility of their first-party data, thus reducing their reliance on third-party data sources. We have invested heavily into practice areas across first-party data strategy and consulting, marketing data infrastructure, data science and cloud-driven solutions. As we continue to collaborate with our clients on these and similar initiatives, we are seeing an ongoing acceleration of demand as clients elevate the priority of ‘post-cookie’ solutions in 2022 and 2023 planning and look to us for education, strategy and solution implementation. 36 S4Capital Annual Report and Accounts 2021