In this article, we discuss the 12 best marketing stocks to buy. To skip the detailed analysis of the industry, go directly to the 5 Best Marketing Stocks to Buy.
The advertising and marketing industry is a vital component of the economy and it plays diverse roles in driving growth, nurturing innovation and creativity, and facilitating market efficiency. According to a report by Solomon Partners, the projections indicate that global advertising growth for 2024 is expected to range from 4.6% to 7.2%, nearly doubling the anticipated growth rate of 2% to 5% projected for 2023. Some of the major growth catalysts in the year for marketing and advertising companies are the Paris Olympics and the US elections. According to the report, the highest ad spending year-over-year growth is expected for out-of-home advertising at 7.2%, followed by digital ad spending at 6.3%. On the other hand, print ad spending is expected to decline by 4.6% year-over-year.
Ad Revenue on the Rise for Digital Advertising Companies
In recent weeks, companies with digital advertisement segments saw a healthy rise in their ad revenues. Mega-cap tech stocks such as Meta Platforms, Inc. (NASDAQ:META), Alphabet Inc. (NASDAQ:GOOG), and Amazon.com, Inc. (NASDAQ:AMZN) beat their estimates and experienced a significant rise in their advertisement businesses. Meta Platforms, Inc. (NASDAQ:META) reported its earnings for the first quarter of fiscal 2024, on April 24, posting an EPS of $4.71, up $0.39 from forecasts. The company’s revenue was up 27% year-over-year at $36.46 billion, ahead of estimates by $240 million. Meta Platforms, Inc. (NASDAQ:META) reported that the number of ad impressions delivered across its Family of Apps increased by 20%, compared to the previous year and the average price per ad was up 6% year-over-year. Nearly 98% of the company’s revenue comes from advertisements. At its Q1 2024 earnings call, CEO Mark Zuckerberg made the following comments about integrating AI with its ad business:
“…once our new AI services reach scale, we have a strong track record of monetizing them effectively. There are several ways to build a massive business here, including scaling business messaging, introducing ads or paid content into AI interactions, and enabling people to pay to use bigger AI models and access more compute. And on top of those, AI is already helping us improve app engagement which naturally leads to seeing more ads, and improving ads directly to deliver more value.
So if the technology and products evolve in the way that we hope, each of those will unlock massive amounts of value for people and business for us over time.”
Alphabet Inc. (NASDAQ:GOOG) posted its earnings for the fiscal first quarter of 2024 on April 25 and reported an EPS of $1.89, exceeding EPS estimates by $0.38. The company’s revenue was up 15.4% year-over-year at $80.54 billion. The company’s Google advertising segment reported revenues of $61.66 billion, showing an increase of over 13% year-over-year. Furthermore, YouTube ads generated a revenue of $8.09 billion, compared to $6.693 billion in the first quarter of 2023. Alphabet Inc.’s (NASDAQ:GOOG) CEO, Sundar Pichai made the following comments at the company’s Q1 2024 earnings call:
“We remain committed to all of this work. Finally, our monetization path. We have clear paths to AI monetization through ads and cloud, as well as subscriptions. Philip will talk more about new AI features that are helping advertisers, including bringing Gemini models into Performance Max. Our Cloud business continues to grow as we bring the best of Google AI to enterprise customers and organizations around the world. And Google One now has crossed 100 million paid subscribers. And in Q1, we introduced a new AI premium plan with Gemini Advanced. Okay, those are the six points. So now let me turn to quarterly highlights from Cloud and YouTube in a bit more detail. In Cloud, we have announced more than 1,000 new products and features over the past eight months.”
While the above-mentioned companies generate most of their revenues from advertising and marketing, Amazon.com, Inc. (NASDAQ:AMZN) is an e-commerce company. However, its ad revenue experienced the most noteworthy jump. On April 30, the company reported earnings for the fiscal first quarter of 2024. Amazon.com, Inc. (NASDAQ:AMZN) reported an EPS of $1.13 and beat EPS expectations by $0.30. The company’s revenue surged by 12.5% year-over-year to $143.3 billion and beat Wall Street consensus by $763.92 million. The company’s advertising business brought in a revenue of $11.8 billion, up 24% year-over-year. Here is what Amazon.com, Inc.’s (NASDAQ:AMZN) CEO, Andy Jassy said about its advertising business at the company’s Q1 2024 earnings call:
“The strength in advertising was primarily driven by sponsored products, supported by continued improvements in relevancy and measurement capabilities for advertisers. We still see significant opportunity ahead in our sponsored products as well as areas where we’re just getting started like Prime Video ads. Prime Video ads offers brands value as we can better link the impact of streaming TV advertising to business outcomes like product sales or subscription sign-ups, whether the brands sell on Amazon or not. It’s very early for streaming TV ads but we’re encouraged by the early response. Moving to AWS. Year-over-year revenue growth accelerated to 17.2% in Q1, up from 13.2% in Q4. It’s useful to remember that year-over-year percentages are only relevant relative to the total base from which you start.”
Barclays Identifies Microsoft’s Ad Business Potential
On February 28, Barclays highlighted Microsoft Corporation’s (NASDAQ:MSFT) strategic focus on advertising investments and emphasized their significance in light of ongoing antitrust actions in the US and Europe, as well as the evolving landscape influenced by artificial intelligence, as reported by TheFly. The firm believes that the company’s advertising assets could potentially reach a value of $50 billion over time and can challenge Alphabet Inc. (NASDAQ:GOOG) in the advertisement segment. Barclays estimates the intrinsic worth of Microsoft Corporation’s (NASDAQ:MSFT) advertising segment at $30 billion, largely propelled by platforms like LinkedIn and Bing, and anticipates a potential $20 billion surge in sales through aggressive distribution strategies. Barclays has a Buy rating on Microsoft Corporation’s (NASDAQ:MSFT) shares with a $475 price target.
Microsoft Corporation (NASDAQ:MSFT) reported its fiscal Q3 2024 earnings on April 25, posting an EPS of $2.94 against $2.82 expectations. Its revenue of $61.9 billion was up over 17% year-over-year, and outperformed the estimates by $971.29 million. The company’s CEO, Satya Nadella made the following comments at its Q3 2024 earnings call:
“We once again took share across Bing and Edge as we continue to apply this new generation of AI to transform how people search and browse. Bing reached over 140 million daily active users, and we are particularly encouraged by our momentum in mobile. Our free Copilot apps on iOS and Android saw a surge in downloads after our Super Bowl ad and are among the highest-rated in this category. We also rolled out Copilot to our ad platform this quarter, helping marketers use AI to generate recommendations for product images, headlines, and descriptions.”
Keeping in mind the recent growth in advertising and marketing industry earnings across the board, some of the best marketing stocks to buy are Integral Ad Science Holding Corp. (NASDAQ:IAS), Nexxen International Ltd. (NASDAQ:NEXN), and Boston Omaha Corporation (NYSE:BOC).
12 Best Marketing Stocks to Buy
Our Methodology
For this article, we identified 30 marketing and advertising agency stocks from SmartETFs Advertising & Marketing Technology ETF (NYSEARCA:MRAD), Yahoo Finance stock screener, and some of our prior related articles. Next, we took each stock’s analyst sentiment from The Wall Street Journal and narrowed down our list to the stocks with the highest average analyst price target upside. The stocks are listed in ascending order of their average analyst price target upside, as of May 9.
Hedge fund sentiment around each stock has also been added. The hedge fund data was taken from Insider Monkey’s database of 933 elite hedge funds as of the fourth quarter of 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
12 Best Marketing Stocks to Buy
12. Omnicom Group Inc. (NYSE:OMC)
Number of Hedge Fund Holders: 27
Average Analyst Price Target Upside: 12.4%
Omnicom Group Inc. (NYSE:OMC) is a New York-based company that provides advertising, marketing, and corporate communications services. In the fourth quarter of 2023, 27 hedge funds had stakes in the stock with total positions worth $694.181 million. As of December 31, 2023, Citadel Investment Group is the most dominant shareholder in the company with a stake worth $244.483 million.
On May 7, Barclays upgraded Omnicom Group Inc. (NYSE:OMC) to Overweight from Equal Weight and increased the price target to $110 from $100. The stock has Buy-equivalent ratings as per the 11 out of 15 Wall Street analysts that have covered it over the past three months. As of May 9, the average price target of $107.58 represents an upside of 12.4% to the stock’s current price.
Integral Ad Science Holding Corp. (NASDAQ:IAS), Nexxen International Ltd. (NASDAQ:NEXN), and Boston Omaha Corporation (NYSE:BOC) are some of the best marketing stocks to buy, along with Omnicom Group Inc. (NYSE:OMC).
Artisan Partners made the following comment about Omnicom Group Inc. (NYSE:OMC) in its Q3 2023 investor letter:
“Omnicom Group Inc. (NYSE:OMC) is a global advertising and marketing services holding company. Organic growth came in slightly lighter than expected, which caused the stock to sell off. Even after the pullback, the stock has returned 22% over the prior one year. The business, while cyclical due to its ties to ad spend, is a royalty on competition as clients around the world seek Omnicom’s expertise in creating, managing and tracking advertising campaigns. The business generates strong free cash flow, which has funded capital return in the form of share repurchases and dividends (3.8% current dividend yield), and is mostly a cost-plus business, which lessens the risk of margin pressure. Omnicom also has a flexible cost model allowing it to cut overhead during economic downturns to protect operating profit. While we cannot predict the economic cycle, Omnicom is a business that has delivered high returns on equity over a full business cycle and is currently selling at an attractive ~12X earnings.”
11. Criteo S.A. (NASDAQ:CRTO)
Number of Hedge Fund Holders: 15
Average Analyst Price Target Upside: 12.57%
Criteo S.A. (NASDAQ:CRTO) is a France-based company that offers marketing and monetization services, including contextual advertising, video advertising, and others. Over the past three months, 9 Wall Street analysts have given Buy-equivalent ratings to Criteo S.A. (NASDAQ:CRTO). As of May 9, the stock’s average price target of $42.18 has an upside of 12.57% to its current price.
On May 2, Criteo S.A. (NASDAQ:CRTO) announced Q1 2024 earnings. The non-GAAP EPS reported was $0.80 while the revenue generated during the quarter was $450 million.
Criteo S.A. (NASDAQ:CRTO) was held by 15 hedge funds in Q4 of 2023 and the stakes amounted to $288.761 million. Cadian Capital is the biggest shareholder of the company and has a position worth $107.339 million as of the fourth quarter of 2023.
10. The Trade Desk, Inc. (NASDAQ:TTD)
Number of Hedge Fund Holders: 41
Average Analyst Price Target Upside: 12.8%
The Trade Desk, Inc. (NASDAQ:TTD) is a California-based technology company that provides a self-service cloud-based platform that enables marketers and advertisers to buy and manage digital advertising space covering various ad formats and channels. At a stake value of $1.31 billion, 41 hedge funds held positions in the stock. As of the fourth quarter of 2023, Millennium Management is the most significant shareholder of the company. The firm increased its stake in the company by 267% to 3.32 million shares valued at $239.010 million.
On May 9, RBC Capital raised the price target on The Trade Desk, Inc. (NASDAQ:TTD) to $110 from $105 and kept an Outperform rating on the shares. The company is listed among the best marketing stocks to buy.
The Trade Desk, Inc. (NASDAQ:TTD) has received Buy-equivalent ratings from 27 out of 32 analysts that have covered the stock, and its average price target of $100.02 implies an upside of 12.8% to the stock’s price on May 9.
ClearBridge Investments stated the following regarding The Trade Desk, Inc. (NASDAQ:TTD) in its fourth quarter 2023 investor letter:
“We have chosen to source a significant number of ideas among companies earlier in their business lifecycle by focusing on four secular growth themes: data and analytics, onshoring/reshoring, information security and e-commerce. In addition to Microsoft, three of the four other new positions we initiated during the quarter fit within these focus areas: The Trade Desk, Inc. (NASDAQ:TTD), Monolithic Power Systems and Model N.
Trade Desk, in the communication services sector, is a disruptor in the advertising technology market, operating a cloud-based platform that enables buyers to manage their digital advertising campaigns. We added the shares on a pullback due to recessionary fears and ad buyer cautiousness.”
9. Perion Network Ltd. (NASDAQ:PERI)
Number of Hedge Fund Holders: 23
Average Analyst Price Target Upside: 27.66%
Perion Network Ltd. (NASDAQ:PERI) is an Israel-based company that offers digital advertising solutions through its businesses, including Hivestack, Vidazoo, and others. Based on 6 Wall Street analysts’ price targets over the past three months, Perion Network Ltd. (NASDAQ:PERI) has an average price target of $15.60, showing an upside of 27.66% to the stock’s current price.
On May 8, Perion Network Ltd. (NASDAQ:PERI) announced Q1 2024 earnings. The non-GAAP EPS reported was $0.44, which beat the analysts’ estimates by $0.03. The revenue surged 8.7% year-over-year to $157.8 million, and it surpassed the estimates by $0.93 million.
In the fourth quarter of 2023, 23 hedge funds held investments in Perion Network Ltd. (NASDAQ:PERI), with positions worth $162.017 million. With 1.485 million shares worth $45.84 million, Private Capital Management is the most dominant shareholder in the company, as of December 31, 2023.
8. National CineMedia, Inc. (NASDAQ:NCMI)
Number of Hedge Fund Holders: 13
Average Analyst Price Target Upside: 33.04%
National CineMedia, Inc. (NASDAQ:NCMI) is a media company that runs a cinema advertising network through its business, National CineMedia, LLC. The company offers entertainment content, advertising, and movie screening services. National CineMedia, Inc. (NASDAQ:NCMI) was part of 13 hedge funds’ portfolios and their stakes amounted to $138.841 million in the fourth quarter of 2023. As of Q4 of 2023, Blantyre Capital is the top shareholder in the company and has a position worth $110.39 million.
Over the past three months, National CineMedia, Inc. (NASDAQ:NCMI) has received Buy-equivalent ratings from 2 out of 4 Wall Street analysts. As of May 9, the average price target of $6.08 implies an upside of 33.04% from present levels. The company takes the eighth spot on our list of the best marketing stocks to buy.
On May 6, National CineMedia, Inc. (NASDAQ:NCMI) announced first-quarter 2024 earnings with a non-GAAP EPS of -$0.19. The revenue grew by 7.2% year-over-year to $37.4 million, which beat the estimates by $2.67 million.
7. Ziff Davis, Inc. (NASDAQ:ZD)
Number of Hedge Fund Holders: 19
Average Analyst Price Target Upside: 42.48%
Ziff Davis, Inc. (NASDAQ:ZD) is a New York-based vertically-focused digital media and internet company that provides marketing services and solutions through its brand, Ziff Davis Performance Marketing.
Ziff Davis, Inc. (NASDAQ:ZD) is one of the best advertising agency stocks as it has been covered by 9 Wall Street analysts and 7 maintain a Buy-equivalent rating on the stock. As of May 9, the average price target of $78.58 represents an upside of 42.48% to the stock’s current price.
On May 9, Ziff Davis, Inc. (NASDAQ:ZD) reported Q1 2024 earnings. The non-GAAP EPS beat the market consensus by $0.12 at $1.27. The revenue topped the analysts’ estimates by $0.99 million and jumped 2.4% year-over-year to $314.5 million.
In Q4 of 2023, 19 hedge funds had stakes in Ziff Davis, Inc. (NASDAQ:ZD), with positions worth $248.762 million. As of December 31, 2023, Royce & Associates is the most prominent shareholder in the company with a position worth $101.7 million.
6. LiveRamp Holdings, Inc. (NYSE:RAMP)
Number of Hedge Fund Holders: 28
Average Analyst Price Target Upside: 43.39%
LiveRamp Holdings, Inc. (NYSE:RAMP) operates as a marketing technology company and its LiveRamp Data Collaboration platform supports different people-based marketing solutions, including measurement and analytics, activation, and identity, among others. According to our database, 28 hedge funds held stakes in LiveRamp Holdings, Inc. (NYSE:RAMP) in the fourth quarter of 2023, with positions worth $206.004 million.
As of May 9, LiveRamp Holdings, Inc. (NYSE:RAMP) has received Buy-equivalent ratings from 7 analysts, and its average price target of $46.89 has an upside of 43.39% from present levels.
LiveRamp Holdings, Inc. (NYSE:RAMP) has gained 34.24% over the last twelve months, as of May 9. Additionally, the company has recorded a trailing twelve-month EPS growth of 87.35%, and over the last 5 years, its sales have increased by 20.46%.
LiveRamp Holdings, Inc. (NYSE:RAMP) is among the best marketing stocks to buy. Other such stocks include Integral Ad Science Holding Corp. (NASDAQ:IAS), Nexxen International Ltd. (NASDAQ:NEXN), and Boston Omaha Corporation (NYSE:BOC).
Click to continue reading and see the 5 Best Marketing Stocks to Buy.
Suggested articles:
- 25 Countries with the Most Cigarette Smokers per Capita
- 20 Best Universities in Asia for International Students
- 12 Best Gig Economy Stocks To Buy
Disclosure. None. 12 Best Marketing Stocks to Buy is originally published on Insider Monkey.