Growing trend of eCommerce is expected to increase online advertising spending, which should boost the ad tech stocks on our list
SmallCapPower | April 12, 2017: Since 2016, digital advertising expenditures have overtaken television advertising to become the medium of choice for companies planning to spark their sales. As the world shifts towards viewing content on mobile devices, mobile and video advertising are the fastest growing forms of digital advertising today. In fact, eMarketer forecasts mobile advertisements to account for over a third of all media ad spending in the United States. Today we have identified five digital ad tech stocks that would benefit most from the rising trend of mobile and video advertising. The companies on our list include not only small caps on Canadian stock exchanges, but larger companies on U.S. exchanges as well.
Trade Desk Inc. (NASDAQ: TTD) – $36.90
The Trade Desk, Inc. is a technology company that provides a self-service platform that enables clients to purchase and manage digital advertising campaigns across various advertising formats, including display, video and social, and on a range of devices, including computers, mobile devices and connected television. Its platform enables a media planner or buyer at an advertising agency to purchase digital media programmatically on various media exchanges and sell-side platforms; acquire and use third-party data to optimize and measure digital advertising campaigns; deploy their, or their client’s, own first-party data in order to optimize campaign efficacy; link digital campaigns to offline sales results or other business objectives; access other services, such as its data management platform and publisher management platform marketplace, and use its user interface and application programming interfaces (APIs) to build their own technology on top of the Company’s platform.
- Market Cap: $1,443.9 million
- Revenue (FY0): $202.9 million
- D/E (FY0): 15.7%
- EV/Sales (NTM+1): 3.8x
Rubicon Project Inc. (NYSE: RUBI) – $5.47
IT Services & Consulting
The Rubicon Project, Inc. offers a technology solution to automate the purchase and sale of advertising for buyers and sellers. The Company’s solution enables buyers and sellers to purchase and sell a range of advertising units, including display and video; utilizing various inventory types, including direct sale of inventory and real-time bidding (RTB), and across digital channels, including mobile Web, mobile application and desktop, as well as across various out of home channels, such as digital billboards.
- Market Cap: $270.5 million
- Revenue (FY0): $278.2 million
- D/E (FY0): 0%
- EV/Sales (NTM+1): 0.4x
AcuityAds Holdings Inc. (TSXV: AT) – $4.67
AcuityAds Holdings Inc, formerly Wildlaw Capital CPC 2 Inc., is the parent company of AcuityAds Inc. (Acuity). Acuity is a technology company, which provides targeted digital media solutions, enabling advertisers to connect with their audiences across online display, video, social and mobile campaigns. Acuity offers a Programmatic Marketing Platform to connect digital advertisers to consumers across advertising channels. The Programmatic Marketing Platform includes Acuity’s machine learning technology that uses Big Data. Acuity’s Programmatic Marketing Platform allows advertisers to manage their purchasing of digital advertising in real-time using real-time bidding (RTB).
- Market Cap: $99.5 million
- Revenue (FY0): $29.5 million
- D/E (FY0): 388.4%
- EV/Sales (NTM+1): 1.6x
Rocket Fuel Inc. (NASDAQ: FUEL) – $4.50
Advertising & Marketing
Rocket Fuel Inc. is a technology company that offers a Programmatic Marketing Platform, which is designed for helping marketers and their agencies to connect with consumers through digital media. The Company’s service offerings are organized around platforms, including Data Management Platform (DMP) and Demand Side Platform (DSP), which are used by customers themselves or integrating with other customer relationship management or marketing platforms, and together in various permutations as its Programmatic Marketing Platform. The integrated platform is designed to deliver and optimize media spend to engage, upsell and retarget consumers across addressable channels, including display, mobile and video, and across addressable devices, such as tablets, set top boxes, television and mobile phones.
- Market Cap: $208.1 million
- Revenue (FY0): $456.3 million
- D/E (FY0): 99.0%
- EV/Sales (NTM+1): 1.1x
Tremor Video Inc. (NYSE: TRMR) – $2.06
Advertising & Marketing
Tremor Video, Inc. is an advertising technology company that provides software for video advertising effectiveness. The Company operates through online video advertising services segment. Its technology optimizes performance of video advertisement campaigns across all screens, including computers, smartphones, tablets and connected televisions. The Company’s buyer platform enables advertisers, agencies and other buyers of advertising to discover, buy, optimize and measure the effectiveness of their video advertisement campaigns.
- Market Cap: $103.1 million
- Revenue (FY0): $166.8 million
- D/E (FY0): 1.4%
- EV/Sales (NTM+1): 0.3x
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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