What are online advertising stocks to watch? Surfing the internet and streaming videos can be a chore these days. Why? It’s not about the content but about all the online advertising that comes with it. I remember when we used to go to websites without being bombarded with pop-up ads or auto-played videos. I also understand that online and digital advertising is worth billions annually.
So you can see exactly why online advertising is a booming industry. You’re also safe to presume that companies that deal in buying and selling advertisements are very profitable investments. I always like to talk about having our investing radar on.
Even when we’re doing things in the real world, just surfing the net or streaming videos should give you a good idea of how well these companies are doing! Let’s take a look at some great online advertising stocks.
Chart by TradingView
Table of Contents
List of Online Advertising Stocks
1. Alphabet (NASDAQ: GOOGL)
Google is the king of online advertising, with nearly 80% of its annual revenues coming from its Google Ads segment. Advertising is estimated to bring in nearly $150 billion annually, and Google accounts for about 30% of the world’s share of digital ad spending.
Perhaps most importantly, nearly 70% of all desktop users will use Google Chrome as their web browser, and about 90% of the world uses Google Search as their primary search engine.
That gives Google an incredible advantage over its peers and allows it to have a near-monopoly over the digital ad space. Shares are expensive and sell at a premium, but Google remains the global leader in digital advertising and should be for the foreseeable future.
2. Facebook (NASDAQ: META)
Nearly 98% of Facebook’s revenues come from advertisements on platforms like Facebook and Instagram. It is safe to say that Facebook is the industry leader among social media platforms and should continue to be so, with nearly 3 billion active users on Facebook and 1.4 billion active users on Instagram. Facebook hasn’t even added advertisements to its messaging service WhatsApp, which has over 2 billion users.
3. The Trade Desk (NASDAQ: TTD)
The Trade Desk is a popular company that is the industry leader in demand-side platform advertising. A demand-side platform is where companies can bid on ad sources and theoretically pay cheaper fees.
The Trade Desk utilizes cloud-based solutions for its customers and prides itself on providing more customer-friendly and relevant advertisements. The company underwent a 10-1 stock split earlier this year and has returned an impressive 2,500% to its investors over the past five years.
4. Magnetite (NASDAQ: MGNI)
Magnite is a sell-side advertising platform with the opposite side of the transaction as the Trade Desk. Magnite is considerably smaller than these other companies and has a market cap of about $3.7 billion.
Magnite recently purchased a company called SpotX for $1.1 billion. This acquisition is meant for Magnite to move more into digital advertising than television-based ads.
5. Groupon, Inc. (NASDAQ: GRPN)
Groupon is a Chicago-based e-commerce firm operational since 2008. It connects consumers to different merchants through a website and mobile application. The company operates in over 500 cities in 48 countries and has over a million active users. The company has a market capitalization of over $1.5 billion and showed over $1.4 billion in annual revenue in 2020.
COURSE |  |  |  |
|---|---|---|---|
| DESCRIPTION | Learn how to read penny stock charts, premarket preparation, target buy and sell zones, scan for stocks to trade, and get ready for live day trading action | Learn how to buy and sell options, assignment options, implement vertical spreads, and the most popular strategies, and prepare for live options trading | How to read futures charts, margin requirements, learn the COT report, indicators, and the most popular trading strategies, and prepare for live futures trading |
| INCLUDED | Daily watch lists • Trade rooms • Trading scanners • Discord • Live streaming Day Trading > | Daily watch lists • Trade rooms • Options scanners • Discord • Live streaming Options > | Futures target levels • Trade rooms • Real time teaching • Discord • Live streaming Futures > |
Types of Online Advertising
The thing about online advertising is that it comes in all shapes and sizes now. The more advertising there is, the more it gets seamlessly integrated into our user experience. Here are a few types of online advertising that you have probably encountered before! And they make for great online advertising stocks.
Pay Per Click Ads: This is exactly what it sounds like. Your site makes revenue every time a visitor clicks on an ad. It can be intentional, or it can be by accident. Either way, you still make a few cents! On the other side of that click, companies or retailers are paying for the ad space on your site through platforms like Google Ads. They will pay $1.00 to $2.00 per click and hope that the return they receive from each visitor more than makes up for the costs.
Video Ads: Don’t get me started on how many ad platforms like YouTube play during a video my kid watches. But they’re effective and often cater to the video you are viewing. If it’s a well-known kids’ show, you’ll often be presented with ads for toy companies. If it’s a sports-related video, you’ll get advertising for streaming. Or you are even betting on professional sports. You won’t see these ads if you pay for the premium YouTube Premium subscription. The same can be said for platforms like Netflix or Disney+. Subscription revenues are enough to offset adding in advertising. So, if you don’t want any ads to show up, you may have to crack open your wallet.
Digital Advertising is Here To Stay
Digital marketing has overtaken other mediums like radio and television. Think about the last time you were on a social media platform or a non-subscription-based video streaming site.
Chances are your video was interrupted by at least two ads, and your social media stream is full of them. It is just the nature of how we spend our time now.
We spend more hours on a computer or smartphone than in front of the television. We can watch it anywhere, after all.
For many web-based sites and companies, ad revenues are essential to their business. It is valuable real estate that has a legitimate effect on users.
While it seems like some sites are obnoxiously filled with online ads, look at your local newspaper. Or count how many commercials come on during your favorite show.
It is just the world we live in. And the more time we spend online, the more ads we will be exposed to. Hence, our online advertising stocks list.
How We See Ads
Promoted Posts: We’ve all seen these ads show up in your timelines on platforms like Facebook or Twitter. Promoted posts often show up frequently in your timeline. They’re meant to attract new visitors and increase traffic and engagement. These can be pretty deceiving these days as they flow seamlessly into the rest of your feed. Sites like Twitter do make sure to label them as promoted posts. So, if you see one, know it’s a paid advertisement!
In-Game Ads: This applies to both real-life games and video game environments! Sports games can digitally alter certain parts of the screen to place advertisements. One great example is in the National Hockey League, where the boards and glass are used to project different digital ads. In video games, developers often include virtual billboards that can attract players as they play. This isn’t as popular. However, theoretically, the advertisement does exist in that game environment forever! So, let’s take a look at some online advertising stocks.
Best Trading Companies
Tech Based Online Advertising Stocks
1. Pubmatic Inc (NASDAQ: PUBM)
Pubmatic is a tech company that creates strategies for the digital publishing and advertising industry; the company also carries out development and implementation processes for online advertising software.
The software provides a specialized cloud infrastructure platform that enables real-time programmatic advertising transactions. PubMatic received a favorable response at its recent IPO, posting 64% revenue growth. In addition, the EBITDA almost tripled, and the adjusted earnings per share jumped from $0.06 to $0.34.
2. Criterio (NASDAQ: CRTO)
Criterio is a company that strongly focuses on retargeting products for its consumers. The company allows its consumers the option to provide targeted ads for recently viewed items that consumers may want to revisit. Considering the recent ban on third-party cookies by search engines, Criterios business was at risk; however, Criterio acted quickly and started diversifying away from the ad retargeting market.
Criterio now works on developing software solutions that can help improve media outreach, boost e-commerce value, etc.
3. Amazon (NASDAQ: AMZN)
Without mentioning Amazon, it’s hard to write an article about eCommerce and technology nowadays. The eCommerce site incorporates more targeted ads, as Amazon uses your previous search histories and pages viewed to send you exactly the type of purchase you want to make. Recently, Amazon started to add video ads like the ones seen on YouTube to its Amazon Prime streaming platform.
Between each episode, Amazon will play one of its ads or an ad paid for by another company. Amazon is also alleged to have its Amazon Alexa smart home pieces that listen to our conversations around the house. This allows Amazon to determine what we want or need to buy from the site.
Final Thoughts: Online Advertising Stocks
There’s just no way to avoid these online advertisements these days. With fewer people watching television and more people spending time online, it makes sense that a shift from television to digital advertisements has taken place. If we’re watching television and the show goes to commercials, it’s generally our time to stretch, get a snack, or hit the restroom. Online advertisements, on the other hand, are integrated directly into the site or your feed. And they’re far more effective. This is why we have this online advertising stock list.
There are so many different types of online advertising that it is difficult to know exactly which one you are viewing. Some sites have pay-per-click advertising, while others will add in-video ads of your product or other companies. We all know how frustrating it can be to have your YouTube video interrupted greatly, but it is partly our fault for not wanting to pay for the premium subscription.
Finally, some incredibly powerful companies, like Google and Facebook, make much of their revenues from advertisements. They can be annoying, but if you are an investor in these companies, think you are adding to the revenues each time you click on an ad. When surfing online next time, don’t think of online advertisements as ads; think of them as television commercials you can’t get up and miss! The online advertising industry should see a major ascent in the tech sector as the world continues gaining more smartphone and high-speed internet users.
