11 Best Advertising Stocks To Invest In

In this article, we discuss 11 best advertising stocks to invest in.

According to PricewaterhouseCoopers, online advertising spend in 2021 came in at $189.3 billion, about 2.7-times ahead of the spending on TV ads, which stood at $69.7 billion. In 2022, PwC expects that online advertising spending will climb to $218 billion, essentially tripling the TV ad spend, which is forecasted to experience a slow growth rate. Latest estimates, assuming a compound annual growth rate (CAGR) of 7.99% from 2021 through to 2026, expect the online advertising market in the US to reach $278 billion. By 2026, the dollar spend on online advertising is predicted to be over 3.8-times that of TV advertising spend.

However, big tech is making moves that will impact the advertising world directly, in addition to inflation and consequent budget cuts hammering the industry. Privacy changes like Apple’s AppTrackingTransparency policy will not allow advertisers to track users on iOS and disrupt monetization and measurement of data insights. Resultantly, Meta announced that these privacy changes could cost the company about $10 billion in 2022, and since it failed to provide a similar replacement, advertisers are leaving Facebook. This will highly affect Meta’s annual growth rate of ad revenues. 

While the industry goes through big changes, valuations become attractive and investors should look into picking up notable advertising stocks like Netflix, Inc. (NASDAQ:NFLX), The Trade Desk, Inc. (NASDAQ:TTD), and Alphabet Inc. (NASDAQ:GOOG). 

Our Methodology 

We selected the following advertising stocks based on growth fundamentals, positive analyst coverage, and strong hedge fund sentiment as of June 2022. We have arranged the list according to the number of hedge fund holders in each firm, tracked by Insider Monkey as of the second quarter of 2022.

Allen.G/Shutterstock.com

Best Advertising Stocks To Invest In

11. Stagwell Inc. (NASDAQ:STGW)

Number of Hedge Fund Holders: 11

Stagwell Inc. (NASDAQ:STGW) is a New York-based company focused on digital transformation, performance media and data, consumer insights and strategy, and creativity and communications services. The company operates through three segments – Integrated Agencies Network, Media Network, and Communications Network. On October 12, Stagwell Inc. (NASDAQ:STGW) acquired Maru Group, a software experience and insights data platform. Maru solidifies Stagwell Marketing Cloud’s global, blue-chip client list and enhances its presence in Buenos Aires, Chicago, London, Los Angeles, New York, San Francisco, Southampton, Toronto, and Vancouver.

Needham analyst Laura Martin on September 6 initiated coverage of Stagwell Inc. (NASDAQ:STGW) with a Buy rating and a $9.00 price target. The analyst is optimistic about Stagwell Inc. (NASDAQ:STGW)’s “predictable” revenue and earnings as 20% of its annual sales are generated from recurring maintenance contracts and 60%-70% of revenue is made from multi-year contracts. The analyst added that Stagwell Inc. (NASDAQ:STGW) is “inexpensive” compared to 11 ad-driven companies in her coverage, and she sees “material valuation multiple upside”.

According to Insider Monkey’s second quarter database, 11 hedge funds held stakes worth $77.5 million in Stagwell Inc. (NASDAQ:STGW), compared to 10 funds in the prior quarter $95.7 million. 

Like Netflix, Inc. (NASDAQ:NFLX), The Trade Desk, Inc. (NASDAQ:TTD), and Alphabet Inc. (NASDAQ:GOOG), Stagwell Inc. (NASDAQ:STGW) is one of the best advertising stocks to invest in. 

10. DoubleVerify Holdings, Inc. (NYSE:DV)

Number of Hedge Fund Holders: 12

DoubleVerify Holdings, Inc. (NYSE:DV) was founded in 2008 and is headquartered in New York. The company offers a software platform for digital media measurement, data, and analytics in the United States and internationally. DoubleVerify Holdings, Inc. (NYSE:DV) provides solutions to advertisers which enhance the effectiveness, quality, and return on their digital advertising investments. The company has attractive unit economics and multiple blue-chip customers. It is one of the best advertising stocks to monitor. 

On October 18, Barclays analyst Raimo Lenschow maintained an Equal Weight rating on DoubleVerify Holdings, Inc. (NYSE:DV) but trimmed the price target on the shares to $26 from $27. In the presently uncertain outlook, the analyst favors cash flow positive, established software vendors. 

According to Insider Monkey’s second quarter database, 12 hedge funds were long DoubleVerify Holdings, Inc. (NYSE:DV), with combined stakes worth $137 million, compared to 16 funds in the prior quarter worth $254.4 million. Chase Coleman’s Tiger Global Management is the leading position holder in the company, with 2.8 million shares valued at $63.3 million. 

Here is what Artisan Partners specifically said about DoubleVerify Holdings, Inc. (NYSE:DV) in its Q2 2022 investor letter:

“DoubleVerify Holdings, Inc. (NYSE:DV) is the leading provider of data analytics that enable advertisers to increase the effectiveness, quality and return on their digital advertising investments. Instead of advertisers having to rely on each platform’s (Facebook, Twitter, Google, etc.) own unique metrics and manually trying to aggregate them into a cohesive reporting framework, DoubleVerify’s software accomplishes this in one single solution. It uses its own measurement and analytics across the advertising ecosystem, providing brands with consistency and standardization in measuring the efficacy of their digital advertising spend. This helps solve a critical problem for brands and ultimately helps drive their future ad buying decisions, which can be particularly difficult when >40% of digital ads are never seen,<5% receive more than two seconds of engagement and 15%-20% of impressions are fraud where bots emulate human views. We believe the company is well positioned to benefit from increased penetration of digital ad impressions in new channels and geographies, market share gains and upselling existing customers to more advanced and higher priced offerings.”

9. Deluxe Corporation (NYSE:DLX)

Number of Hedge Fund Holders: 14

Deluxe Corporation (NYSE:DLX) is a Minnesota-based provider of technology-led solutions to enterprises, small businesses, and financial institutions in the United States, Canada, Australia, South America, and Europe. It operates through four segments – Payments, Cloud Solutions, Promotional Solutions, and Checks. The company offers business forms, advertising specialties, promotional apparel, and retail packaging services. Deluxe Corporation (NYSE:DLX) is one of the top advertising stocks to consider. 

On November 3, Deluxe Corporation (NYSE:DLX) reported its third quarter results, posting non-GAAP earnings per share of $0.99, beating market estimates by $0.05. The revenue of $555 million climbed 4.4% year-over-year and outperformed Wall Street consensus by $25.45 million. For the full-year 2022, Deluxe Corporation (NYSE:DLX) expects revenue growth of 8% to 10%, versus a 9.28% consensus. 

Cowen analyst Lance Vitanza on August 5 reiterated an Outperform rating on Deluxe Corporation (NYSE:DLX) but lowered the price target on the stock to $36 from $42. The analyst said underlying demand remains resilient, with strong organic volume growth despite successful pricing actions. The shift towards Payments and Data and the One Deluxe model is paying off and management is working diligently to combat margin pressure.

Among the hedge funds tracked by Insider Monkey, Chuck Royce’s Royce & Associates is the largest stakeholder of Deluxe Corporation (NYSE:DLX) as of Q2 2022, with 632,906 shares worth $13.7 million. 

8. Criteo S.A. (NASDAQ:CRTO)

Number of Hedge Fund Holders: 14

Criteo S.A. (NASDAQ:CRTO) was incorporated in 2005 and is headquartered in Paris, France. It is a technology company that specializes in marketing and monetization services in North and South America, Europe, the Middle East, Africa, and the Asia-Pacific. The company offers customized creative advertising content by optimizing individual client preferences, and Criteo S.A. (NASDAQ:CRTO) generates advertising revenues from consumer brands by monetizing their data and audiences through personalized ads. It is one of the premier advertising stocks to buy now. 

On October 10, Morgan Stanley analyst Brian Nowak raised the price target on Criteo S.A. (NASDAQ:CRTO) to $35 from $32 and kept an Equal Weight rating on the shares. His latest industry checks demonstrate that the online ad market seems to be holding up “relatively well” and he still forecasts 11% year-over-year U.S. online ad growth in 2022, but trends vary largely by ad vertical, the analyst wrote in a research note. 

According to Insider Monkey’s Q2 data, 14 hedge funds were bullish on Criteo S.A. (NASDAQ:CRTO), with collective stakes worth $290 million, compared to 17 funds in the prior quarter worth $281 million. Ahmet Okumus’ RPD Fund Management is the largest stakeholder of the company, with 2.3 million shares valued at $56 million. 

7. Ziff Davis, Inc. (NASDAQ:ZD)

Number of Hedge Fund Holders: 19

Ziff Davis, Inc. (NASDAQ:ZD) is a New York-based company that provides internet information and services in the United States, Canada, Ireland, and internationally. The Cybersecurity and Martech segment offers cloud-based subscription services to consumers and businesses, including cybersecurity, privacy, and marketing technology. The management also has a robust track record of value-accretive acquisitions to expand into strategic end-markets.

Evercore ISI analyst Shweta Khajuria on September 20 initiated coverage of Ziff Davis, Inc. (NASDAQ:ZD) with an Outperform rating and a $90 price target. A leading buyer and operator of Digital Media and Internet businesses, Ziff Davis, Inc. (NASDAQ:ZD) has diversified its revenue base with advertising and subscription businesses across seven core verticals, the analyst told investors. The analyst would be a buyer given the attractive risk/reward and short-to-mid term catalysts that include M&A activity likely in Q1 2023 and beyond and further share repurchases. 

According to Insider Monkey’s data, 19 hedge funds reported owning stakes worth $294 million in Ziff Davis, Inc. (NASDAQ:ZD) at the end of Q2 2022, compared to 24 funds in the last quarter worth $408.7 million. Amy Minella’s Cardinal Capital is the largest stakeholder of the company, with 1.5 million shares valued at $112.6 million.

6. Magnite, Inc. (NASDAQ:MGNI)

Number of Hedge Fund Holders: 23

Magnite, Inc. (NASDAQ:MGNI) operates an independent sell-side advertising platform in the United States and internationally. The company was incorporated in 2007 and is headquartered in New York. On October 19, Fox Corporation (NASDAQ:FOX) announced a partnership with Magnite, Inc. (NASDAQ:MGNI) to power programmatic campaigns for OneFOX video inventory across the Fox entertainment, sports, streaming, and news portfolio. Magnite, Inc. (NASDAQ:MGNI) will serve as a sell-side advertising platform connected to the OneFOX inventory.

On August 10, Susquehanna analyst Shyam Patil reiterated a Positive rating on Magnite, Inc. (NASDAQ:MGNI) but lowered the firm’s price target on the shares to $13 from $24. The analyst noted that Magnite, Inc. (NASDAQ:MGNI) reported a solid Q2, with CTV exceeding forecasts despite macro headwinds. He said although the guidance was a bit lower due to the tough macro, most of the softness is from desktop, not CTV.

According to Insider Monkey’s data, 23 hedge funds were bullish on Magnite, Inc. (NASDAQ:MGNI) at the end of the second quarter of 2022, compared to 28 funds in the last quarter. Nine Ten Partners is a leading position holder in the company, with 2.36 million shares worth $21 million. 

In addition to Netflix, Inc. (NASDAQ:NFLX), The Trade Desk, Inc. (NASDAQ:TTD), and Alphabet Inc. (NASDAQ:GOOG), Magnite, Inc. (NASDAQ:MGNI) is one of the top advertising stocks to monitor. 

Here is what Alger has to say about Magnite, Inc. (NASDAQ:MGNI) in its Q2 2021 investor letter:

“Magnite provides an advertising supply side platform for publishers. The technology helps publishers such as network television stations or cable news providers automate the sale of digital advertising inventory across different formats and channels, like desktop, mobile, video, audio, connected TV and over-the-top TV. Publishers monetize their digital advertising inventory by using Magnite’s platform to access a global market of ad buyers, including advertising agencies that use supply side platforms. Magnite also helps sellers decrease costs and protect their brands and user experience. Magnite receives ad inventory from sellers and optimizes publishers’ revenue yields by processing the highest buyer bids. Currently, Magnite keeps approximately 10% of ad spend as revenue (i.e. take rate) and passes on the remainder of the ad spend to publishers. Magnite’s clients include many of the world’s leading publishers of websites and mobile applications and the company believes that its platform reaches approximately 1 billion individuals globally.

Shares of Magnite underperformed in the second quarter due to the growth market selloff and slower-than-expected growth in connected TV during the first three months of this year. We believe the 32% growth in connected TV was below expectations and due to a one-time issue with one of the company’s publishing partners that ran out of advertising inventory. Management noted the issue has been fixed and the company saw strong reaccelerating growth in April. Additionally, we believe Magnite’s recent acquisition of video advertising company SpotX will significantly bolster the company’s positioning within connected TV, a high-growth area of the digital advertising market that is taking share from linear TV ad budgets.”

5. Boston Omaha Corporation (NYSE:BOC)

Number of Hedge Fund Holders: N/A

Boston Omaha Corporation (NYSE:BOC) is headquartered in Omaha, Nebraska, engaged in the outdoor billboard advertising business in the southeast United States. The company also partakes in the surety insurance and related brokerage, broadband, and investment businesses. Boston Omaha Corporation (NYSE:BOC) is one of the best advertising stocks to monitor. 

On November 1, Wells Fargo analyst Steven Cahall raised the price target on Boston Omaha Corporation (NYSE:BOC) to $34 from $27 and maintained an Overweight rating on the shares. The analyst argued that Boston Omaha Corporation (NYSE:BOC) is the best smid-cap stock that investors are not aware of, as he lifted 2022/2023 EBITDA estimates at Billboards and Broadband on the back of resilient organic growth.

According to Insider Monkey’s data, Adam Peterson’s Magnolia Capital Fund held the leading stake in Boston Omaha Corporation (NYSE:BOC) at the end of the second quarter of 2022, comprising 5.7 million shares worth $117.3 million. 

4. Digital Turbine, Inc. (NASDAQ:APPS)

Number of Hedge Fund Holders: 27

Digital Turbine, Inc. (NASDAQ:APPS) is a Texas-based company that operates a mobile growth platform for advertisers, publishers, and device original equipment manufacturers (OEMs). The company operates through three segments – On Device Media, In App Media AdColony, and In App Media Fyber. Digital Turbine, Inc. (NASDAQ:APPS) is one of the best advertising names to monitor. 

On October 5, Digital Turbine, Inc. (NASDAQ:APPS) announced a strategic investment in Aptoide, one of the biggest independent Android app stores, with more than 250 million users. This investment will promote improved app discovery experiences for Digital Turbine, Inc. (NASDAQ:APPS)’s OEM Partners globally. 

Roth Capital analyst Darren Aftahi on October 31 maintained a Buy rating on Digital Turbine, Inc. (NASDAQ:APPS) but lowered the firm’s price target on the shares to $20 from $32, citing headwinds that could limit visibility and broader multiple compression. However, the analyst believes that Digital Turbine, Inc. (NASDAQ:APPS)’s free cash flow yield is “very enticing.” 

According to Insider Monkey’s Q2 data, 27 hedge funds were long Digital Turbine, Inc. (NASDAQ:APPS), compared to 32 funds in the last quarter. Scott Stewart Miller’s Greenhaven Road Investment Management is the largest position holder in the company, with 1.40 million shares worth $24.5 million. 

Here is what Greenhaven Road Capital has to say about Digital Turbine, Inc. (NASDAQ:APPS) in its Q1 2022 investor letter:

“Digital Turbine (NASDAQ:APPS) – Digital Turbine has effectively zero exposure to oil or Ukraine, is well equipped to deal with inflation as all of its inputs and outputs are digital, and should have zero issues with rising rates. Shares got hammered with the decline in “growth stocks” as well as a concern that Google would change its policies on Android device IDs that are used for advertising targeting and attribution (a change that wasn’t put in place but was discussed in a blog post). Given that Digital Turbine has software on devices and is not reliant on the Android device IDs for attribution, it is more likely they would be a beneficiary of this change than a victim. Add in the fact that the European Union is progressing towards a Digital Markets Act that would compel Apple to allow for competing app stores, the regulatory landscape is favorable to Digital Turbine. The decline is exceedingly frustrating.

Our investment in Digital Turbine is predicated on three beliefs. The first is that companies will continue to want direct relationships with their customers via apps. The second is that companies will go to where the eyeballs are, which means mobile phones for the foreseeable future. The third belief is that Digital Turbine can carve out a durable and profitable niche between end users and app developers/carriers/handset manufacturers. All of these beliefs remain in place; nothing has changed. Digital Turbine’s software is installed on over 1.5 billion devices and growing, and they work with more carriers and companies every quarter.

In terms of valuation, management has guided to tripling revenues and 10Xing profits over the next three to five years. Yes, that is a long time and a lot can go wrong, but we are not paying for that level of upside. If you take the last quarter’s run rate earnings, adjusting for one-time expenses related to acquisitions and the amortization of intangibles, you get an adjusted net income of approximately 43 cents per share or $1.72 per share annualized. This is for a core legacy business that grew 43% with large wins for the MobilePosse business and a SingleTap business with a bright future. Unlike many high growth companies, Digital Turbine is profitable while growing and has a PEG ratio below 1.”

3. Omnicom Group Inc. (NYSE:OMC)

Number of Hedge Fund Holders: 29

Omnicom Group Inc. (NYSE:OMC) is one of the best advertising stocks to invest in. It is a New York-based provider of advertising, marketing, customer relationship management, public relations, and corporate communications services. On October 18, Omnicom Group Inc. (NYSE:OMC) reported its Q3 results, posting a Q3 GAAP EPS of $1.77 and a revenue of $3.44 billion, topping market estimates by $0.13 and $100 million, respectively. 

On October 14, JPMorgan analyst David Karnovsky noted that there are attractive risk/reward profiles for advertising agencies heading into the Q3 results. He had an Overweight rating on Omnicom Group Inc. (NYSE:OMC) with a price target of $86. 

Among the hedge funds tracked by Insider Monkey, Omnicom Group Inc. (NYSE:OMC) was part of 29 public stock portfolios at the end of Q2 2022, up from 22 in the prior quarter. Cliff Asness’ AQR Capital Management is the largest position holder in the company, with 651,855 shares worth $40.8 million. 

2. The Interpublic Group of Companies, Inc. (NYSE:IPG)

Number of Hedge Fund Holders: 30

The Interpublic Group of Companies, Inc. (NYSE:IPG) is a New York-based company that provides advertising and marketing services worldwide. The company specializes in consumer advertising, digital marketing, communications planning, media buying, public relations, specialized communications disciplines, and data science services. The Interpublic Group of Companies, Inc. (NYSE:IPG) is one of the premier advertising stocks to invest in.

On October 31, The Interpublic Group of Companies, Inc. (NYSE:IPG) declared a quarterly dividend of $0.29 per share, in line with previous. The dividend is payable on December 15, to shareholders of the company as of December 1. The Interpublic Group of Companies, Inc. (NYSE:IPG) also posted market-beating Q3 results. 

Investment advisory JPMorgan sees attractive risk/reward profiles on the advertising agencies into the Q3 results, and he reiterated an Overweight rating on The Interpublic Group of Companies, Inc. (NYSE:IPG) with a price target of $38. Analyst David Karnovsky issued the ratings update. 

According to Insider Monkey’s data, The Interpublic Group of Companies, Inc. (NYSE:IPG) was part of 30 hedge fund portfolios at the end of June 2022, compared to 32 in the last quarter. Harris Associates is the biggest position holder in the company, with 14.5 million shares worth nearly $400 million. 

Here is what Ariel Fund & Ariel Appreciation Fund has to say about The Interpublic Group of Companies, Inc. (NYSE:IPG) in its Q3 2021 investor letter:

“Marketing communication company, Interpublic Group of Companies, Inc. (IPG) was the top contributor over the trailing one-year period. Notably, IPG is delivering a stronger than expected revenue mix between Technology and Healthcare relative to its peer group, solid cost containment and margin expansion. Meanwhile, the company continued to focus on de-levering the balance sheet. In our view, IPG’s Acxiom acquisition for data has proven to be a winner, helping the company increase their revenue across all eight major advertising sectors by industry. We believe these results continue to demonstrate the strength and resiliency of the business model and expect IPG to be a beneficiary of increasing advertising and marketing budgets across an improving global economy.”

1. The Trade Desk, Inc. (NASDAQ:TTD)

Number of Hedge Fund Holders: 34

The Trade Desk, Inc. (NASDAQ:TTD) is a California-based technology company that develops an on-demand platform allowing users to create, manage, and optimize data-driven digital advertising campaigns across various ad formats and channels, including display, video, audio, native, and social on multiple devices. 

On October 5, Susquehanna analyst Shyam Patil said The Trade Desk, Inc. (NASDAQ:TTD) remains a must-own name, supported by a multi-pronged, multi-year secular growth story. He noted that the primary drivers, CTV in both US and international, shopper marketing, Solimar, international, and UID2, are gaining momentum, and he sees a meaningful future upside. The analyst reiterated a Positive rating and a $95 price target on The Trade Desk, Inc. (NASDAQ:TTD) shares.

According to Insider Monkey’s data, 34 hedge funds were bullish on The Trade Desk, Inc. (NASDAQ:TTD) at the end of June 2022, with combined stakes worth about $544 million. Zevenbergen Capital Investments is the biggest position holder in the company, with 3.3 million shares valued at $138 million.

Here is what Baron Funds specifically said about The Trade Desk, Inc. (NASDAQ:TTD) in its Q3 2022 investor letter:

“The Trade Desk, Inc. (NASDAQ:TTD) is the leading internet advertising demand-side platform, enabling agencies and companies to buy and track digital advertising. The company reported 35% growth in sales, a terrific result in a softening advertising market, and the shares rose. EBITDA margins were 37% in the quarter, and cash flow also beat expectations. The company is benefiting from the growth in advertising on Connected TV and advertisers’ desire to work with Trade Desk, as a neutral service provider, as opposed to Google who does not share critical data with its partners/advertisers. Also, Netflix announced that it would be offering a tier of service that includes advertising, which is a seminal moment in the development of digital advertising and a big growth opportunity for Trade Desk. Though it is an expensive stock on near-term estimates, we believe Trade Desk can continue to compound its EBITDA and EPS at a 25% to 30% clip into the future, creating significant value in time.”

You can also take a look at 11 Best Healthcare Dividend Stocks To Buy and 11 Best Prison Stocks To Buy. 

Follow Insider Monkey on Twitter

Suggested articles:

• 11 Best Midcap Dividend Stocks To Buy
• 11 Safe Stocks To Invest In
• 10 Cheap Penny Stocks To Buy Now

Disclosure: None. 11 Best Advertising Stocks To Invest In is originally published on Insider Monkey.