"Internet and advertising stocks have steadily outperformed the S&P 500, climbing by nearly 50% over the past 12 months alone, said Youssef Squali, managing director and head of the Internet & Digital Media Research Group at Truist Securities, speaking earlier this week at AdExchanger's Programmatic IO conference in New York City. However, Squali noted, that growth has accrued almost entirely to a handful of big names - Google, Meta, Reddit and AppLovin - while smaller pureplay ad tech companies struggle."
"So what can pureplay ad tech companies do to clean up their rep on the Street? First, companies need to sharpen their particular value prop in a way that investment bankers can intuitively understand. Squali pointed to The Trade Desk as an example, noting how it successfully convinced investors of its core value propositions, namely offering transparent programmatic bids while solely representing the buy side."
Internet and advertising stocks have significantly outperformed the S&P 500, rising nearly 50% over the past year, with gains concentrated among a few large platforms. Google, Meta, Reddit and AppLovin captured most of the growth while smaller pureplay ad tech firms faltered. Several once-promising ad tech companies including Rocket Fuel, YuMe, Marin Software, Tremor Media and Rubicon Project failed to deliver and ceased to exist as standalone businesses. Institutional investor pullback leaves ad tech exposed to retail and hedge fund trading. Pureplay firms should sharpen clear value propositions that investment bankers and investors can readily understand, exemplified by The Trade Desk's buy-side transparency approach.
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