Advertising Industry: Investing Essentials

IPG Chart

If you want to understand how pervasive advertising is these days, you needn't do much more than open your eyes and look around. Whether it be on your television or computer, billboards, the radio, park benches, or perhaps the T-shirt you're wearing, advertisements are everywhere.

IPG Chart

IPG data by YCharts .

The role that content mediums play is constantly evolving and providing advertisers with a number of markets and content mediums that are largely untapped, representing an impressive growth opportunity and industry catalyst.

The largest online advertisers in the world are still in their infancy with regard to understanding how to monetize their mobile advertising platforms. In addition, higher-growth emerging market regions where content is sparse (i.e., where there is little access to Internet or television) presents a multi-decade growth opportunity for advertising expansion.

Perhaps the biggest headwind for advertisers is the sheer cost of innovation: The landscape of advertising is never static. The costs for billboard operators to transition from poster billboards to digital billboards and the adoption of mobile advertising platforms are two examples of the high costs associated with the industry that have the potential to weigh on profits.

In addition to Interpublic, noted above, three other notable pure-play companies you can invest in within the advertising space are Lamar Advertising , Omnicom Group , and CBS Outdoor Americas .

Beyond pure-play advertisers, investors can also gain partial exposure to the sector through content providers such as Google . Google is the dominant player in the PC-advertising market, though Google is by no means wholly reliant on pure advertising revenue for its survival.

The article Advertising Industry: Investing Essentials originally appeared on

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong , track every pick he makes under the screen name TrackUltraLong , and check him out on Twitter, where he goes by the handle @TMFUltraLong .The Motley Fool owns shares of, and recommends Google (A shares) and Google (C shares). Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More