We're good? Alright. Good morning, everybody. Good to see you all. Happy Valentine's Day.
Thank you for coming to our twenty eighth preliminary results. I'm Mark Lewis. Cutting to the chase, I am pleased with what I consider to be a successful first year of strategy delivery. We've launched the Reinvent strategy to deliver the next phase of growth for our business twelve months ago, and we've met our first year milestones. Growth on the call business has accelerated following our investments in the customer experience.
We've integrated DecisionTech to provide new revenue streams and a B2B arm to the group. We've launched a number of new market growth initiatives, and I'll talk more about those in a little while. Through this year of change, we've continued to perform as a business. We've helped customers save a record £2,100,000,000 in switching. This is against the backdrop of lower car insurance premiums, and of course, doesn't include the savings generated by all the campaigning work from money saving experts, which had a record year for visitors and setting the news agenda in 2018.
Group revenues has grown 8%. EBITDA is up 2% after having invested £5,000,000 in building out our product engineering capability. We're announcing today that we will have a £40,000,000 enhanced distribution in addition to the ordinary dividend. Looking forward to 2019, we're set to scale the delivery of our strategy and return to profit growth for investors. I'm pleased to introduce you all today to Cilla Grimble, who recently joined the group and brings with her a wealth of experience in customer businesses.
In a minute, Cilla will walk us through 2018 financials in a little bit more detail, and then I'll come back and talk more about our strategic delivery and highlights of the plans for 2019. But before I do, let me please take the first public opportunity to thank Bruce for all his contributions to the business these last nine years. During his tenure, the business has grown significantly, delivering tremendous value for customers, providers and investors alike. We wish him all the very best for the future after he steps down at the AGM. I'd also like to be the first to congratulate Robin, and his future appointment to chair.
It's been my absolute pleasure to work with Robin these last couple of years, sitting on our board and as chair of our audit committee, I look forward to extending that working relationship in the future in your new role. Very good. With that, let me pass over to Silla for the details of the 2018 financials.
Thanks, Mark, and good morning, everyone, to what's my first set of results with Money Supermarket Group. I joined the business just ten days ago, and I'm really delighted to have joined such a dynamic group at this key stage in its growth. I'm also looking forward to getting to know you all a lot better over the coming weeks. But, today, my role, as Mark said, is to take us through the 2018 results. So if we look at the full year themes, as you'll have seen from the press release, it was another good year where we helped our customers save GBP 2,100,000,000.0.
It was also a year of investment in the group. And as Mark said, we'd signaled about GBP 5,000,000 of investment into our product engineering teams. And we've delivered that and successfully built out our product engineering hub and our technology hub in Manchester. In August, we completed the acquisition of DecisionTech, and their B2B capability is a really welcome addition to the group. And as you've seen, we're delighted in amongst those and many other changes to have delivered our numbers in line with plan.
So group revenue up 8% and EBITDA up 2%. We've continued to generate strong cash, so over a 100,000,000 of operating cash in the year, and that's enabled us to invest organically and inorganically in the business and to drive strong returns to our shareholders. So as you've seen today, the board's announced a 6% increase in our full year dividend, in line with our progressive dividend policy. As Mark's already said, we're pleased to have announced a £40,000,000 enhanced distribution. So moving on now to financial highlights.
And as I've already said, our revenue grew 8% in the year. So 3% of that was driven by our consolidation of Precision Tech, with the rest of the group delivering growth of 5% in the year, slightly ahead of growth in 2017 and broadly evenly split half on half. Our adjusted EBITDA grew 2%, so lower than revenue, and that was driven both by that GBP 5,000,000 investment in our product engineering teams and the lower gross margin, and I'll come back to that. Our statutory EPS grew 13% in the year, and that kicker ahead of EBITDA growth was as a result of lower adjusting items year on year, and we also got some benefit from our twenty seventeen share buyback. Our reinvestment rate was 1% lower in the year, and that really reflects the completion of some of our larger technology programs in previous years.
And as I've already said, we had strong cash generation, and we increased our dividend 6%. So looking now at the shape of the p and l, as I've said, our EBITDA grew 2% compared to revenue growth of 8%. And that was those two reasons, so that £5,000,000 investment in our product engineering teams and a lower gross margin. So in 2018, we delivered a gross margin of 71%, so that's three percentage points down on the previous year. And that was driven by three key things.
Firstly, the acquisition of DecisionTech, where their B2B margins are lower than the B2C margins of the rest of the group, and that cost us about 1% in the year. Secondly, and as I know you're all really familiar with this, as our consumers continue to move towards mobile, that puts downward pressure on our margins, both as a result of conversion and acquisition costs. And as we've previously guided, that cost is about 1% a year. And finally, during 2018, we made an active decision to invest harder in online auctions to drive both profitable growth and to secure market share. Now you'll remember we have a marketing strategy of bidding up to breakeven in those online auctions, and that strategy remained unchanged in 2018.
But that improvement in conversion has enabled us to compete harder in those auctions. So if I continue to move down the p and l, you'll see that our depreciation was in line with plans and broadly flat year on year, and that reflects both the continued shift of our technology spend away from CapEx and towards OpEx and the assets which we've written off in the prior year as part of the strategy review. Adjusting items, as I already said, were down year on year, and that GBP 8,000,000 charge in the year is driven by GBP 4,000,000 of strategy and reorganization costs, 2,000,000 relating to the acquisition of DecisionTech and GBP 2,000,000 of amortization of acquisition intangibles. So all in all, a good year with an increase in profit of 11%. If we look now at our segmental performance, you can see the benefits of us being the most diverse price comparison business.
Insurance traded well, delivering 4% growth in a challenging market where motor premiums are falling. And whilst that premium cycle meant that we had fewer visitors to our site, those who did who we did secure had a higher propensity to switch. In the second half, money benefited from our focus on customer experience, and we ended the year plus 3%. And as I think we had already described at the interims, our energy performance was also strong on the back of some of the work we've been doing to invest in customer experience. DecisionTech contributed £11,000,000 of revenue during the year, and that's, included within that other revenue line.
So moving on to marketing. And you'll remember that marketing margin is one of our five strategic KPIs. And you'll see that that's fallen in the year to 63%, and that reflects some of those dynamics or most of those dynamics I've already discussed in relation to gross margin. So if we stand back and look at the components of spend in the table on the left hand side, you'll see that TV and radio spend remains broadly flat year on year. And if we adjusted that other category for the partnership costs within Precision Tech, then that spend bucket would also have remained broadly flat year on year.
So as you'd expect, our increase in marketing spend is really driven by that online spend bucket where the largest component is paid search. And as I've already said, it's our conversion improvements that have allowed us to make the choice to invest harder into those auctions this year. Three quarters of our revenue still continues to come direct to site, and that's driven through our CRM, our brands, our journalism, and other content and tools. Looking now at our technology spend, and we've already seen that that's reduced slightly year on year by 1% to 11%. And as I previously said, that's relating to the completion of some of our larger technology programs.
But you'll also see on the left hand side the continued shift of our tech spend away from CapEx and towards OpEx as we've completed that replatforming stage and we've transitioned into our product development phase. And finally, returning to CapEx. And as we've seen, we had strong cash generation in the year of over £100,000,000 operating cash, And that's enabled us to make investments behind the business, acquire DecisionTech and to return £57,000,000 to shareholders in the year. As we've said, we're planning a £40,000,000 enhanced distribution, and we'll take soundings from major shareholders on the mechanism for that return. So in summary, 2018 has been a year of ambitious change, and we're really pleased to have delivered financially on plan.
Driving forward that customer experience means we can grow, do more for our customers and keep delivering strong returns for our shareholders. Thanks very much, and I'll now hand you back to Mark.
Great. Thank you, Sila. Brilliant to have you on board. I'm sure this lot are all going to be very gentle with you in the Q and A. So let me now take a few moments, to recap on where we are in our strategy delivery, how we see the market trends and some highlights from our plans for 2019.
As I said, I'm pleased with the first year of delivery against our Reinvent strategy. And through this work last year, I think we strengthened the fundamentals of business. Let's first start about talking about our markets. We operate in growing markets. And as Silla has just confirmed, we have the most diversified set of revenues in the industry.
And through our work this year, we have strengthened that position with the integration of DecisionTech, building out our home communications, mobile and B2B revenue streams. And as you know, we've now made our first moves to drive the digitization of the mortgage market. We operate in markets with structural growth, be that home services, money or insurance. And while there are many moving parts, we have seen one significant change to the insurance premium cycle. As predicted, we saw in 2018 the car insurance market moved to a period of declining premiums.
Looking forward, we expect a delayed return to premium inflation, and so we have revised our view of overall market growth to 4% to 5% over the next couple of years. As you can also see, we're trading robustly and growing share in that category against the backdrop. And while we see an extended period before premiums rise again, we do not see a reason to change our trading outlook. Now let's talk about our users. With our new tech stack, we can now track users when they engage across the main categories in money supermarket.
That number remains stable at around 13,000,000, I'm particularly pleased to see the level of engagement of these users increase with revenue per active user increasing to 15.9 and our Net Promoter Scores increasing across Money Supermarket, Money Saving Experts and Travel Supermarkets in the year. As you know, we run a marketplace model, and it's once again proven to be a very efficient business model. We delivered a marketing margin of 63% on a gross margin of 71%. As Silla has highlighted, this is a factor of the DecisionTech acquisition, the continued migration of our users to moving mobile devices to access our sites, but also our decisions to push for profitable growth and share in categories like energy and car on the back of the work we have done to increase our customer experience and conversion rates. We continue to deliver for our providers and we can see continue to see strong offers on our sites.
In particular, energy deals remain compelling under the new energy price caps with the current collective deals on our sites offering savings of £250 for average customers. We see continued strong money credit products. For example, there are a range of balance transfer cards on our sites offering twenty four months interest free. And as Silla has called out, our efficient cash generation this year has supported delivery of our ordinary dividend, our M and A activities and an enhanced distribution. So let's so a good first year of delivery of the strategy and strengthening of the business.
Let's go a little further into the details. I'm going start with our first area of focus on the left hand side, reaccelerating core growth. Remember, this is the part of the strategy that underpins our revenue growth. It builds on our trusted brands, our leading provider offer and is driven by an increased focus, if not obsession, with improving the customer experience of our core comparison business. I think we've made great strides on this this year.
We've built out our project engineering capability and is now operating at scale and delivering for the business. We've shown that Manchester works well for us as a place to recruit and retain great digital talent. We've now scaled to 150 heads in that city, and we will consolidate in that location with a permanent office later this year. These squads are now in place across the major categories, You can see the first results already in our twenty eighteen numbers. I shared the story on Energy at the half year, and we have now increased the conversion rates across every major category, including in Motor, after the launch of a faster and easier question set later in 2018.
So I'm pleased with this progress. It's working for us and we have strong road maps to deliver in 2019. Now let's have a look at our progress in unlocking areas of new market growth. Remember, the work to optimize our customer experience makes today's business stronger. Our work to unlock new market growth talks to our vision for how we can lead the evolution of price comparison into its next phase.
Let's start with our work personalizing the Money Supermarket experience. Remember, we're trying to do this to create a richer relationship with the Money Supermarket customers to become more of a one stop place for managing their household bills, to help them save more and to strengthen our revenue per user and marketing margin. At the half year, I shared some of the trials that we've been working on in the Money Supermarket app. We're pleased with what we found and we intend to scale this work in 2019. You'll see us move further into proactive policy monitoring, keeping an eye on the bills and policies for the millions of Money Supermarket customers working in the background to help them find better deals.
In December, we launched Credit Monitor from Money Supermarket, allowing users to track their credit score and file for free from their existing Money Supermarket accounts. On the back of this rich customer data, we're able to produce a more proactive and personalized set of recommendations for customers without them having to fill out a further question set. In the case of cards, as you can see, this has allowed us to showcase a range of guaranteed cards for customers. We check their eligibility for the offer and rate in the background. So it's a fundamentally easier, more engaging and proactive comparison experience.
For those of you that look for the detail, although it says welcome, Mark, I should flag that as not my credit score. So to support this move, we will relaunch the Money Supermarket brand with new advertising look and feel, next month. I'm not going to share the ads with you today, but on the right hand side of the slide, what you do see is the new brand identity with a goal of modernizing Money Supermarket, building on the trust it already has with its customers and providing the platform to support the new services and brands that that brand will be taking to the market. So I think 2019 is going be a big year for the Money Supermarket brand. Now as you know, we have the view that in addition to helping customers when they visit our sites, we also think that we can take price comparison directly to the user.
This means presenting the personalized deals at the very heart of our offer directly to customers on other sites that they are already visiting and where they are sharing the data that allows us to match them to a better deal. Having completed the acquisition in August, we have now integrated DecisionTech into the group. This has added growth to the business, added strength in exciting categories of Home Communications and Mobile. Strategically, the acquisition has now added a B2B arm to the group in addition to our B2C model. I'm pleased with the pace of integration.
And in the second half, we successfully extended the B2B offer from DecisionTech to include energy switching. Sounds simple, but the fact that we've been able to do this confirms the strength of our group technology platform. DecisionTech is now able to sell API and white label comparison services in energy. The pipeline is healthy. And today, we've also announced the first commercial partnership with ING Bank's Yalts application.
This will allow YALT customers to receive personalized energy recommendations from Money Supermarket directly in the YALT app based on the open banking data and with the option to switch their energy right there in the app. So we're excited to pursue this sales channel through 2019. As you know, we're keen to lead the digitization of mortgages, building on our current market leading position in the category. At the half year, we announced the joint venture podium to power a new mortgage experience for the group. And since then, we have launched our first product, our Money Supermarket.
Our initial focus is the remortgage market. Why? Because it's a simpler transaction without a property purchase involved. And of course, it's a more savvy customer who has already had a mortgage and needs less support than, say, a first time buyer. It's also a very large addressable market.
Remortgages and product transfer together account for about 60% of the mortgage market. When we look at the fee pools, we're around £500,000,000 of fees from lenders in that part of the market. We also feel it's underserved, and the CMA agrees. In their recent review, they confirmed that a third of mortgage customers missed out on a better deal for which they would have been eligible. And that translates to people paying over £500 a year for their mortgage, than they could have found on a better deal.
So we think it's the ground that is set for disruption. We think it's a real sweet spot for us, and we have started that process with our first launch in the area. It's early days, but we have launched a dedicated remortgage journey on money supermarkets. It's obviously mobile friendly, but importantly, behind the scenes, we have started editing, adding the smarts of the Podium joint venture to refine the mortgages shown based on the eligibility of the customer. As I say, it's early days, but I wanted to share the direction of travel for this exciting category.
And through 2019, we'll be refining and enhancing that mortgage experience. So look, we're busy. We've got a clear strategy. We're busy executing and it is working for us. As we look forward to 2019, we think these are uncertain times for our users and customers.
I think the one thing we can all agree on is that household budgets are squeezed, and they are likely to be more squeezed as we go through the year. Our business helps people save. Sometimes we have to work hard to encourage them to do so, but I think that our service will become increasingly relevant for UK households as we go through the year and we are proud to serve them. Our Re:Invent strategy is now operating at scale. We're optimizing the customer experience across all the major categories underpinning our revenue growth.
We're excited to be delivering a greater level of innovation and adding new market growth. We've had an encouraging start to the year. We will return to profit growth and the Board are confident in meeting its expectations for 2019. So with that, let me pause, and we should open up the floor to questions and answers. Oh, there's one already.
Before we do, given that it is, still its first run out, I'd just be grateful if you could introduce yourself at the start of the questions, if that's okay. I think we have some mics roaming around. If we get one to Gareth, that would be great. Thank you.
Gareth Davis from Numis. Maybe start with three from me. First, just in terms of each of the verticals, certainly, my take is it looks like you've won a bit of share in insurance and home services. Money is a little more stable. I wonder, can you just talk around the competitive environment, and what you're seeing there?
Secondly, in terms of the new brand launch, can you talk about the cost implications a little bit there in terms of how the shape of Knight?
Okay. Three questions indulgent three questions for the first one. Right. We'll do them in that order. I'll do share.
Maybe you can do marketing cost, and then we'll probably both talk to margin, I suspect. Right. So as you know, we have market share information, some of which we can share and some of which we can't. I think I alluded in the commentary that I think we have grown share this year, particularly, we feel very confident in our performance in insurance and home services. And I think what you saw in the money categories, if you looked at the business through the quarters of 2018, you saw an increase in the performance through the quarters.
I think this is linked to what we talked about at the half year, where we said that we were fully optimizing our energy experience at that point, but we were beginning to then work on our money experience in the second half and also into car insurance. So we're beginning to see that link go through. Do you want to talk about the brand
launch Sure.
Mean if we look at this sort of total envelope of brand spend, usually, I'd expect actually our brand relaunch to be covered within most of that. What may cause a little bit of difference is if we choose to showcase some of our products. But again, I wouldn't expect that to be significant in the context of costs in the year.
Right. Chris Nazzi, why don't you summarize the 2018 numbers, and then I'll maybe talk a little bit about forward looking 2019.
So I think as I said, so there are three key reasons of the decline in the year. So 1% associated with DecisionTech, and you remember DecisionTech, we've consolidated from August of the year, so take a read across into 2019. The 1% is a result of that ongoing shift towards mobile and then the 1% where we've chosen actively to invest into auctions on the back of conversion.
Yes. So if that was the picture in 2018, what do we expect in 2019? Well, obviously, DecisionTech was in the numbers from August. So there's another six months or so in 2019 where it's non like for like. So you will do the math, but you will probably put in about a point, I imagine, on that.
And then we have trailed that we think the headwinds that come from actually the move of our users to addressing and visiting our sites on mobile devices probably accounts for about a point of headwind a year. We're currently at the point where about two thirds of our users access is on mobile devices, with all the growth there being on small screen mobile devices, and that's continuing to grow. So we would envisage that we start, with that headwind, also in 2019. But then I think the exciting thing is what are the levers that we've now got to play with the business. And having built out those product engineering squads in 2018, we are now sort of optimizing at scale across our major categories.
And I think we've shown that, that work can increase conversion rates, and I've alluded that we've got healthy road maps going forward. That obviously pushes back against that headwind in a positive way. It also allows us to go further, as Souther has alluded to, in the share of our business that comes through paid search to profitably grow share, which is something that we have done in 2018. I would envisage that in 2019, I would like those two aspects, the benefits of optimization, our ability to properly grow share to be a little bit more balanced in 2019.
Hubert Renaud from UBS. A couple of questions on my side. The first one on conversion rates. I was wondering if you could give us a little bit more details on where you are now maybe versus competition and what kind of improvements are we looking at 2019 versus 2018? So whether the heavy lifting has been done or it's more balanced.
And the second one on the market growth, so the 6% to 7% going to 4% to 5%. I'm just wondering if it's a comment about this year, next year and which if you could give us a little bit more color on what is Yes, it due to
I'll the drug probably take both of those, I think. On conversion rates, you know, everyone wants to hear our conversion rates, and we obviously don't give them because they are so competitively sensitive. We shared a story at the half year where we showed dramatic impacts, I think, on our energy conversion rates. So in terms of where we are on that, I think I'll go back to kind of what I said at the half year, which is having started building out these product engineering squads at the start of 2018, at the half year, we were operating at speed in energy and that have moved forward, but there is more to come on energy as well. We said in the second half of the year, we would start moving into money.
That has started. I think you can see some of those results in the trajectory of 2018, but there is more come, also in money. We only really got going on insurance, particularly car insurance, later in the year. So we're very pleased with our opportunity ahead of us. It remains it is not particularly groundbreaking changes on one hand.
These are small changes to make the sites easier to use, easier to get through question sets, easier to find results, faster to use, particularly on a small screen mobile device. So we're excited about the opportunities ahead of us there. 2018 was the year of really building out that capability, and we're now running it at scale. So we think that will be significant for us. In terms of market growth, so, we have made one real change to our outlook and it is specific to the cycle of car insurance.
Now you remember that car insurance premiums go up and down and up and down on the cycle. We called at the start of 2018 that we thought they would go from having a number of years of having premiums going up to entering a cycle of premiums going down, and that's exactly how it played out. We think it will be a little bit longer now, before they flip back into going up, and we think that probably means that they remain declining at sort of lower than they were through 2019, and it's probably only into sort of 2020 when they begin to start to tip up. The reason why, for those that want the detail that comes down to some of the regulatory changes, there are a couple of elements that impact insurance pricing that have been a little bit pushed out in the regulatory timeline.
Hi there. Joe Barnett Lamb from Credit Suisse. Three from me, please. Firstly, Decision Tech had a fantastic end to the year. Can you help us understand if there's any phasing in the performance there, or if it really was just an underlying beat?
And if so, what drove
it? Secondly, on the collectives, sounds like you've got some pretty interesting collectives at the start of 2019. Can you help us understand if there's a set size that those, collectives can be or any information you can give us around that? And then finally, I'm sure you won't give us the commercial terms of your deal with Yolt, but anything you can do to help us understand the economics of that would be much appreciated.
Great. Why don't you you do detail?
Nothing significant in terms of phasing. So you can take it, you know, I think it was we said this time, slight beta versus what we'd expected.
So energy market. If it's okay, John, I'll just sort of extend the question a little bit actually because I think it's a pretty dynamic market, isn't it? So we are running collectively. We have Big Switch 13, I believe it is, running at the moment. As I say, that's offering savings about £250 for an average customer.
So really nice collective. I think collectives continue at the sort of level that we talked about them landing to sort of 2017 and into 2018. So we are not seeing the major blockbuster collectors that we saw in twenty fifteen, sixteen, but I think they have now landed at good solid level. And we're very pleased with the one that is the offers that are on the site at the moment for users. More broadly, I think it's just worth a comment of what are we seeing in the energy market now that caps are live with us.
And I think the first thing that we're seeing is that actually the market has landed in the way that I think the regulator tried to set it up, which is that there is protection for the vulnerable, but there remains within the opportunity of where the caps are set, to have significant savings for customers versus a standard variable rate, to encourage a switching market. And that seems to be playing out. What we are also seeing though is it's a little bit more volatile. So there are times when the cap is set and then adjusted, and obviously, just saw it bounce up, in the announcements the other week. It will go up in April.
And when you combine that with the movements in wholesale prices, we think those savings are sort of a little more volatile as we go through the year, but they remain in a healthy place where we can actually put really compelling offers in front of our customers. I'm not going to share the commercial terms of the Alts, as you predicted. I think what you do see now though in the P and L and you can extract is a little bit, of a clearer view of what the B2B sort of margin structure looks like in our business. So I would take that as a guide. There was a question over here and then we'll come to you, Andrew.
Hi. It's Bob Leo from Macquarie. First question is just on the marketing margin outlook. Considering that you seem to be focused more on the paid search, Does that sort of diminish the opportunity for continued rises in the marketing margin? And then secondly, you've seen competitors in insurance introduce automated switching products like your WeFlip and OttoSerge and and and the like.
I just wanted to see, what your comment is on, on that and and and how you plan to react to it.
And
then, finally, just, on Podium, just, I'm not sure where the product is right now. I just wanted to see whether there's more to do or what or what's more to do there that, is still being worked on this year.
Marketing margin outlook, it's I think I'm going say similar things to what I said just a couple of minutes ago, I think. As we look forward into 2019, obviously, we'll have the impact of DecisionTech flowing through the numbers. We start the year with a continued about a one point headwind that comes from the fact that, users increasingly accesses on a mobile phone. We're sort of explaining why that is. Traffic that comes to us through mobile devices of Google tends to have a higher weighting towards paid search than natural search, and users on a mobile phone tend to have a lower conversion rate because they tend to visit the site more times before they transact.
So that's yes. So that's the short term piece. And obviously, our work to optimize the customer experience pushes back in that in a positive way. If we take a slightly more longer term view, obviously, those dynamics will play out, I've described how I see them in 2019. If we take the slightly more longer term view, it really comes back to our work to personalize the money supermarket experience, because that allows us to create a more personalized, sticky experience, if you will, for our customers anchored around things like the collection of bills that we're proactively monitoring, which we now do for people across their energy and insurance, anchored around things like their credit score, which obviously updates monthly.
And so that is absolutely the part of our strategy that is talking to how we seek to strengthen our revenue per active user and our marketing margin over that term. So the question around sort of auto switching delegated authority, our position on this hasn't massively changed. So we think the market is very, very ready for proactive monitoring. And that's what we have started building out in 2018. We now monitor people's energies switching.
What does that mean is that once you switch your energy, you then get a monthly alert that says you're still on a good deal. This is still the best tariff for you given the conditions that you've told us. But if we find a tariff in the background and we check every month where there is a greater savings, typically people set that limit around GBP 50. When we find the tariff that offers a saving more than GBP 50, we will say to the customer, here it is, it is with this provider, do you want to switch? And then it's a very simple switching piece.
So we think the market is very, exciting opportunity around proactive monitoring, if you will. And we think that's the right phase of the market. We are not yet seeing the market be ready for full delegated authority. There is an important difference that is when, the business switches on behalf of the user without giving them that step of confirming that they want to do so. We haven't yet seen that be a proposition, that overcomes the barriers of trust with users.
We are seeing, as you say, a number of, entrants entering the market in that space. They all look very small to us. And particularly when they come in with new brands, we think that is quite a challenge to overcome that question of customer trust. The final question was around mortgages, think, and where we are on the experience. We're at the very beginning of it.
So what you'll see if you go to money supermarkets and go through our remortgage journey today, you'll now see that we present back a set of mortgages that have been begun to be filtered down based on the criteria of the customer, so based on simple things like the loan to value or ratios of the customer. And what you'll see is that we will refine down the eligibility throughout the course of 2019. And that's really what the Podium joint venture allows us to do. It's the smarts behind the scene that manages all the complicated balancing of which lenders will lend to which customer in order for us to allow those remortgaged customers to find a deal that they are eligible for and to maximize their savings as possible. So you'll see us refine that down as we go through 2019.
You will also see us go deeper in our integrations that we have onto brokers and also directly to lenders in that category.
Andrew? Thanks. It's Andrew Ross from Barclays. So, just two things to follow-up on. On the first one's on slide nine and, your paid search spend.
When I calculate that chart, it looks like you're generating less revenues from SEM when you were paying in online spend. Whereas in '17, you were making a bit of money. So could you just explain why that is, given the tone that more paid search spend is going offset by better conversion? Second thing is to follow-up on Joe's question on, b two b. And could you just give us a sense as to what you think was the reason that you won that yacht deal?
Is it price kind of better tech? Just help us understand why they went with you. And also, you give us a sense as to how you see the competitive landscape evolving in that b two b piece and where you think you're differentiated now that you've got DecisionTech fully integrated?
Yeah. Okay. So marketing margin, there's no change to our approach to how we go about performance marketing. You should highlight that, that bucket does have other elements of cost in there. It's not just paid search, but it is one of the larger elements, as Sila said.
There's no change on our approach. So we will continue to bid down to the point where we are breakeven on the first transaction of gross margin. That's our approach. It isn't a science and sometimes it goes over and sometimes it goes under. It obviously varies around our ability on the conversion rate, but there's no real change to our approach on that in our 2018 numbers nor in our 2019 outlook.
On the B2B side, I won't talk specifically around the details of the Yolked deal. But in terms of our proposition, what we're able to take to market in energy switching, for example, on the back of DecisionTech is a fully fledged and proven B2B proposition in the price comparison arena. And DecisionTech have a very strong reputation in this area on the back of their work in home communications already to date. What we have added is energy switching into that proposition. And so what we're seeing is that what people like in the market is the fact that we can offer both a combination of API solutions if they want to do bespoke integrations or white label solutions if that is their preferred route.
They're liking the fact that we are able to offer a range, of categories. And obviously, you could look at the Money Supermarket Group and see a fuller range of categories there beyond, the ones that we have taken to market at this point in time. They like the strength and trust that comes from, the brand behind. And so the offers that are presented to users can come with the endorsement of the Money Supermarket brand. And obviously, we do all of that in a fully regulated environment.
So I would suggest they are some of the really compelling parts of the proposition. Gosh. Any on the phones? No. No?
One last one.
Thanks. Couple of follow-up question then for me. The first one on the decision tech again. I think earlier in the year, you mentioned that, obviously, the banks have apps that are widely used. And I'm just wondering, do you find that the new entrants, so like maybe Yolt or maybe Revolut are keen to monetize their often free apps and are and are more willing to, to potentially discuss with you, or do you also see some interest from the larger, platforms?
Mhmm. Sorry. For the second one. Oh, sorry. The second one has already been asked.
Thanks.
Oh, okay. Well, look. I I think we're seeing interest across the piece, for a couple of reasons. One is, absolutely, it is an opportunity, for those partners to monetize the traffic that they're generating for those apps. But also, it's an opportunity to offer real value added service to their customers as well.
So it has the nice benefit across the piece. I think what we see is different people have different, levels of technology stacks and integration, but appetite across the piece, I think. Okay. With that, let's wrap it all up. We look forward to seeing you all in six months' time.
Enjoy your