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This story originally appeared on StockMarket
Facebook's strong ad revenue is putting these booths on investors' radar.
Digital advertising stocks are red hot on the stock exchange today. You have seen Snapshots (NYSE: SNAP) strong first quarter last week. Now we get another validation of Facebooks (NASDAQ: FB) First quarter results with revenue up 48% year over year. The social media giant also attributed the significant increase in sales to the advertising business.
I'm not sure if you're okay with this, but what we have here is a perfect storm of diverse forces lining up in the digital advertising space. Digital advertising spending has increased social media holdings, proving that digital advertising is huge business. But on another side of the business, we have ad tech companies that are thriving too. These companies support brands and agencies in targeting, delivering and analyzing their digital advertising activities.
An increase in screen time and technical dependency coincided with an increase in connected TVs (CTVs). According to eMarketer, advertisers spend over $ 70 billion annually on television, while CTV ads make up only 10% of the television advertising budget. With CTV continuing to leak cables, top advertisers like it Roku (NASDAQ: ROKU) is set to steal more and more of the $ 70 billion cake. With targeted advertising going beyond social media and websites, television is expected to be the next big arena. So, if you think television advertising is going to take over the blame, here is a list of the top advertising titles you should be looking for massive growth opportunities in the stock market right now.
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First off, the sell-side advertising platform Magnite is definitely worth a closer look. It's the world's largest independent sell-side advertising platform that works across numerous channels and formats, including ads on streaming TV. For strangers, Magnite is the result of a merger between digital advertising company Rubicon Project and software company Telaria.
In February, SpotX acquired SpotX from RTL Group for $ 1.17 billion. This makes Magnite an ad tech company that handles all of the major cable networks and streaming channels. The merger also strengthens the company by creating a cost-saving synergy of $ 35 million per year. This in turn strengthens Magnite's position in the ad-based streaming industry.
Of course, recent MGNI stock performance may deter some investors from getting on board. The company's share price is down around 30% from its all-time high. Since nothing has fundamentally changed since then, the recent decline offers investors a great opportunity to buy at a discount. After all, the pandemic has dramatically increased the demand for programmatic advertising. With such good prospects, will you add MGNI stocks to your portfolio?
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The trade desk
Next up, The Trade Desk is one of the world's largest independent demand-side platforms (DSPs). For strangers, the company helps brands strategically place their ads in various media forms. The trade desk generates revenue by distributing the commercials it buys for brands that use its platform.
There are some tailwinds that could continue to bring huge revenue to the company. First off, CTV advertising is booming and you can thank COVID-19 for that. With that in mind, brands would certainly have good reasons to advertise on CTV platforms. In addition, the company has a partnership with Walmart (NYSE: WMT) to launch an enhanced version of Walmart Connect. Given that most Americans shop at Walmart, the synergy between these two companies could generate significant revenue for both companies.
Given that TTD stock is slipping from its all-time high of $ 972.8, would now be a good time to buy the stocks at a discount? If you plan to invest in TTD stock as part of your long-term investment, it is still a well-run company with tremendous market opportunity. Expect only some volatility in the long run.
PubMatic is a technology company that develops and implements online advertising software and strategies for the digital publishing and advertising industries. In short, the company promotes the infinite potential of internet content creators. It offers a specialized cloud infrastructure platform that enables real-time programmatic advertising transactions. The technology and infrastructure specially developed by PubMatic provide excellent results for both Internet content creators and advertisers.
Revenue increased 64% year over year to $ 56.2 million versus the fourth quarter financial results and fiscal 2020 results. Net income for the quarter was $ 18.8 million and the company ended the quarter with $ 101 million in cash. In a note about those who may benefit from it Alphabet KeyBanc mentioned that PubMatic's products support alternative IDs and first party publisher data. Sales growth of over 20% could be expected.
These impressive financials are likely due to PubMatic's differentiated market position across the digital advertising ecosystem. The company is currently in the midst of an accelerated digital transformation as more and more consumers spend more time online. With that in mind, are you going to consider PUBM stock a top tech stock to watch?
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Last but not least, Criteo is a company that has a strong focus on retargeting products for its customers. The company offers its customers the ability to serve targeted ads for recently viewed items that consumers may want to revisit. The practitioner of ad retargeting is in danger of becoming obsolete as major search engines have banned third-party cookies on their platform, citing privacy concerns.
While this looked like a huge headwind to the company, the company didn't sit idly by. Instead, the company has taken a smart move to diversify its business away from retargeting. The company is now developing software solutions that can help improve media exposure, increase e-commerce volume, and more. Criteo has also participated in the Unified ID 2.0 initiative. Unified ID 2.0 is a new approach to identity that replaces third-party cookies and aims to improve privacy on the Internet.
On April 28th, Criteo announced a unique product that combines first-party trading data with real-time contextual signals. This would enable marketers in particular to continue to better address target groups and increase sales in a post-cookie world. Would you bet on CRTO shares for these innovative developments?