Stocks Gunning for the Next Big Thing in Advertising (MGNI, TTD, CMGR, CRTO)
June 04, 2021 at 07:58 AM EDT
One might think of the Marketing and Advertising industry as something akin to the “applied social sciences”. Psychology, sociology, anthropology all rolled into one. Optimized for commercial success.
However, no matter how well you understand people, no method of branding can work without access to people.
For years, that meant TV and print media. But that world faded from existence gradually over the past 15 years, to be more or less completely replaced by the internet – more specifically, by social media.
The big beneficiaries – aside from the brands that make use of this channel of access to human minds – are the influencers that populate the web and the niche companies that have developed strong technology and networks to assist those brands in shaping their footprint.
With that in mind, we take a look at some of the most innovative names in this space, including Magnite Inc (NASDAQ: MGNI), Trade Desk Inc (NASDAQ: TTD), Clubhouse Media Group Inc (OTC US: CMGR), and Criteo SA (NASDAQ: CRTO).
Magnite Inc (NASDAQ: MGNI) bills itself as the world’s largest independent sell-side advertising platform. According to the company, publishers use its technology to monetize their content across all screens and formats – including desktop, mobile, audio, and CTV.
Company materials go on to note that the world’s leading agencies and brands apparently trust its platform to access brand-safe high-quality ad inventory and to execute billions of advertising transactions each month.
Magnite Inc (NASDAQ: MGNI) recently announced changes to its executive leadership team, effective July 1. These are the company’s first major steps towards integrating its recent acquisition of CTV leader SpotX, and will strengthen its ability to serve clients across all formats, including CTV.
SpotX’s former Chief Technology Officer, J. Allen Dove, will serve as CTO of Magnite; Adam Soroca, Head of Magnite’s Global Buyer Team, will be moving into a newly created role as Chief Product Officer; Sean Buckley, SpotX’s former Chief Operating Officer, will become Chief Revenue Officer for CTV, and Joe Prusz will serve as the Chief Revenue Officer for Magnite’s online video and display business, known as DV+. SpotX’s former CEO, Mike Shehan, will continue with Magnite as a consultant through the end of the year. Additionally, Tom Kershaw, who served as Magnite’s Chief Technology Officer for the past four years, will be stepping down to pursue a new opportunity outside of ad tech.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action MGNI shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -4% on above-average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
Magnite Inc (NASDAQ: MGNI) pulled in sales of $60.7M in its last reported quarterly financials, representing top-line growth of 67.3%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($468.6M against $449M).
Trade Desk Inc (NASDAQ: TTD) is a cloud-based advertising-buying platform.
Ad buyers can value each impression like traders value stocks, using first and third-party data to decide which impression to buy and how much to pay. Its platform enables advertising clients to purchase and manage digital advertising campaigns across various formats, including connected TV (CTV), mobile, video, audio, display, social and native, on a multitude of devices, including smart TVs, computers, and mobile devices.
Trade Desk Inc (NASDAQ: TTD) recently announced financial results for its first quarter ended March 31, 2021, including the fact that customer retention remained over 95% during the quarter, as it has for the previous 7 years.
“We delivered an outstanding performance in the first quarter, once again surpassing our expectations. Revenue growth acceleration over Q1 a year ago is a testament to the value that marketers are placing on data-driven advertising. Nowhere is this more apparent than CTV, which continues to lead our growth,” said Jeff Green, Co-founder, and CEO of The Trade Desk. “We continue to invest in our platform so that we can best meet the evolving needs of the modern marketer. Whether it’s the ability to set precise business goals, to activate valuable first-party data, to pioneer new approaches to identity, or to leverage a full scope of onsite and offsite measurement tools, The Trade Desk continues to pioneer the bleeding edge of ad tech for our clients. As a result, we are rapidly emerging as the default DSP for the open internet.”
The stock has suffered a bit of late, with shares of TTD taking a hit in recent action, down about -2% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -11%.
Trade Desk Inc (NASDAQ: TTD) generated sales of $219.8M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -31.3% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($680.1M against $1.3B, respectively).
Clubhouse Media Group Inc (OTCMKTS: CMGR) is an influencer-based marketing and media firm with a massive and parabolically growing global aggregate social media reach recently estimated at nearly 300 million followers through its industry-leading network of top global influencers.
While the longer-term business model here is to partner with manufacturers and leverage its massive brand-building influencer network to create billion-dollar global consumer product brands, the initial phase is as a top-tier marketing and advertising force in the social media space.
For CMGR, part of that equation is its AI-powered recent acquisition, Magiclytics, which is now live, having just launched and in the same breath signed its first client: Pink and Blue Co, a California-based online jewelry and fine goods company focused on commemorative pieces related to childbirth.
“Pink and Blue offer an excellent case study example of how Magiclytics can provide deep and disruptive value in the social media marketing space,” commented Wilfred Man, Founder, and CEO of Magiclytics.
“The Pink and Blue team knows how to produce amazing fine goods for their niche consumer, and they know influencer-based marketing is the best way to build their brand. But they have previously lacked visibility in trying to implement influencer-based marketing strategies – like driving in an unfamiliar area with no GPS or map. Magiclytics has proprietary analytics that can offer unique guidance and intelligence in that process, including how much response to expect and how to maximize it. We look forward to helping Pink and Blue find breakthrough success.”
Clubhouse Media Group Inc (OTCMKTS: CMGR) shares have pulled back from the $20’s to apparently strong support in the $5 area. The stock has been basing and gradually rising since holding that support level last month. As the company starts to push out more catalysts and advance toward its larger objectives, this may represent an interesting area to take a close look.
Criteo SA (NASDAQ: CRTO) trumpets itself as “the global technology company powering the world’s marketers with trusted and impactful advertising.”
According to company materials, 2,600 Criteo team members partner with over 21,000 customers and thousands of publishers around the globe to deliver effective advertising across all channels, by applying advanced machine learning to unparalleled data sets. Criteo empowers companies of all sizes with the technology they need to better know and serve their customers.
Criteo SA (NASDAQ: CRTO) recently unveiled new branding to align with its significant transformation executed over the last year by the company, including a new logo, visual identity, and brand positioning, “The Future is Wide Open.” The rebrand marks Criteo’s commitment to supporting a fair and open internet that enables discovery, innovation, and choice. It also speaks to the vast opportunity Criteo can capitalize on as it prepares for the future of advertising without cookies.
“The time is right for a new brand identity and rally cry, as we use our massive strength in data and technology to reestablish Criteo’s leadership within the advertising industry and set an optimistic tone for the future of the open internet, for everyone,” said Megan Clarken, Chief Executive Officer at Criteo.
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 4% in that timeframe.
Criteo SA (NASDAQ: CRTO) managed to rope in revenues totaling $539.7M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top-line growth of 7.2%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($537.6M against $557.1M, respectively).
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