3 Advertising & Marketing Stocks to Consider Amid Industry Woes

3 Advertising & Marketing Stocks to Consider Amid Industry Woes

The Zacks Advertising and Marketing industry is anticipated to reach the pre-pandemic healthy levels with the surge in service activities. Industry players’ growth is expected to be driven by the rise of digital marketing surge and client-focused strategies.

Increased service activities, rising digital marketing services and growth in consumer spending across media platforms aid the companies in the industry to tackle the prevailing revenues softness.

Investors can take Gambling.com Group Limited GAMB, Integral Ad Science Holding Corp. IAS and Stagwell Inc. STGW into consideration.

About the Industry

The Zacks Advertising and Marketing industry comprises companies offering extensive services, including advertising, branding, content marketing, digital/direct marketing, digital transformation, financial/corporate business-to-business advertising, graphic arts/digital imaging, healthcare marketing and communications, and in-store design services. Some prominent players in the industry include Interpublic and Omnicom. The pandemic has changed how industry players conduct business and deliver services. Currently, the industry’s key focus is on channeling money and efforts toward media formats and devices. To position themselves suitably in the post-pandemic era, service providers are increasing their efforts toward formulating initiatives and identifying demand sources.

What’s Shaping the Future of the Industry?

Economic Recovery: The sector benefits from the broader economy and service activities. Per the second estimate from the Bureau of Economic Analysis, GDP grew 2.8% in the third quarter of 2024. Notably, the metric increased 3% in the second quarter of 2024. Economic activities in the non-manufacturing sector are in good shape. The Services PMI measured by the Institute for Supply Management has remained above 50% in 51 of 54 months.

Reviving Demand: The industry is mature, with demand for services staying stable over time. Revenues, income and cash flows are expected to reach the pre-pandemic levels, benefiting many industry players to pay out stable dividends.

Digital Marketing on the Rise: Digital media consumption has risen, with consumers spending more time on numerous media platforms and video-streaming services. Therefore, agencies offering digital marketing services stand to improve, as these firms are well-positioned to address the swift changes in customer preference.

Zacks Industry Rank Indicates Dull Near-Term Prospects

The Zacks Advertising and Marketing industry, housed within the broader Zacks Business Services sector, currently carries a Zacks Industry Rank #192. This rank places it in the bottom 23% of 250 Zacks industries.

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