TTD Stock – 3 Stocks to Watch as Digital Ad Spending Continues to Rise
Businesses have become more focused on spending on digital advertising as it is now a go-to option for them to reach out to potential consumers, gradually gaining popularity over the traditional methods of advertising. Notably, with the help of digital advertising, businesses can utilize the rising usage of the Internet across the globe. What works in favor of digital advertising is the fact that it is more affordable when compared to the traditional forms of advertising.
Moreover, digital advertising offers the convenience of targeting the right kind of audience for a product or service. This is because businesses can analyze the preferences of potential customers and offer them personalized recommendations. This, in turn, can lead to higher conversion rates for businesses, that is, it can lead potential customers to see a relevant ad whenever they visit a website or a social media page, and so on, and it might compel them to eventually purchase the product or service.
Meanwhile, digital advertising also allows businesses to track how their potential customers are being engaged with their ads, something which is very difficult to gauge when it comes to offline advertising.
Digital Ad Spending Poised to Grow
The outbreak of the COVID-19 pandemic last year put a dent in overall ad spending. As social distancing led to a halt of various live events, businesses had to cut back on ad spending to deal with the fallout of the pandemic. However, despite the challenges, digital ad spending remained in the bright spot as people stayed at home and spent more time on the Internet. Markedly, a report by eMarketer stated that digital ad spending rose 12.7% in 2020 while total ad spending declined 1.2%.
Nonetheless, businesses are gradually embracing the shift to digitization and hence, the popularity of digital advertising is set to sustain even beyond the pandemic, owing to the many conveniences it provides. Notably, the eMarketer report stated that digital ad spending is set to grow 20.4% in 2021 and reach $455.30 billion.
3 Stocks to Watch Out For
The advent of digital advertisement has taken the advertising industry by storm thanks to the many conveniences it provides over the traditional methods. These, in turn, are making businesses more focused on digital ad spending and increasing their engagement with potential customers. Hence, this seems like an opportune moment to watch out for companies that stand to benefit from the uptrend. Notably, we have selected three such stocks that carry a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alphabet Inc.’s GOOGL Google provides its Google Ads services, allowing businesses to set up online advertisements. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 27.3% over the past 60 days. The company’s expected earnings growth rate for the current year is nearly 50%.
Facebook, Inc. FB provides its Facebook for Business platform wherein it offers solutions for running advertisements on Facebook. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 15.7% over the past 60 days. The company’s expected earnings growth rate for the current year is 29.3%.
The Trade Desk, Inc. TTD operates a self-service cloud-based platform that allows buyers to create, manage and optimize data-driven digital advertising campaigns in various ad formats and channels. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 12.2% over the past 60 days. The company’s expected earnings growth rate for the current quarter is 41.3%.
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