The way we discover and learn about new products has changed dramatically over the years, decades, and even stretching back centuries. Advertising companies that don't adapt to meet the latest societal trends and connect with consumers where they are simply fail to thrive, but those that do keep up with the newest trends and technological advancements typically go far.
In 2023 and now as we prepare to turn the page to 2024, the world of advertising has gotten even more interesting, spawning a variety of new technologies designed to capture the attention of busy consumers. In fact, one estimate values the adtech part of the advertising market at $748.2 billion in 2021 with a projected compound annual growth rate of 14.7% through 2031, making it worth $2.9 trillion in less than 10 years.
Here are six small- and micro-cap stocks that can provide exposure to the rapidly growing adtech market.
Digital Turbine
Digital Turbine (APPS) provides an independent platform to support user acquisition growth and monetization with a focus on mobile advertising. The company uses on-device data to drive ad experiences aimed at delivering superior economics.
So far, Digital Turbine's Ignite on-device footprint covers over 800 million devices. The company boasts over 40 operator and manufacturing partners, over 500 brand and agency relationships, and over 80,000 direct software development kit (SDK) integrations.
With a market capitalization in the $526 million area, Digital Turbine states that it has retained its startup mindset with a focus on creative solutions, an openness to new methods and approaches, and high levels of authenticity and accountability. Interestingly, the company
Magnite
Magnite (MGNI) states that it operates the largest independent sell-side ad platform and describes itself as the "global alternative to adtech's walled gardens — and the giants who live there." The company's platform focuses on CTV and video ads, although it remains committed to its roots as an omnichannel self-serve platform.
According to Magnite, thousands of publishers all over the world rely on its technology to sell advertising "on their terms and across every channel and format," covering connected TV (CTV), desktop, mobile and audio. The company also states that it helps the leading ad agencies and brands in the world connect with millions of consumers "efficiently, safely, and while respecting their privacy."
PubMatic
Pubmatic (PUBM) aims to maximize customer value with the goal of delivering "the programmatic digital marketing supply chain of the future" while staying ahead of adtech trends. The company touts itself as one of the leading scaled digital ad platforms in the world, describing its vision as "that data-driven decisioning would be the future of digital advertising."
Pubmatic states that it serves content creators, enabling them to improve the profitability of their ad business so that they can reinvest in the multi-screen and multi-format content consumers want. The company also says it continues to innovate so that it can provide publishers, data owners and media buyers with more transparent advertising solutions.
As of the end of September, Pubmatic boasts 609 billion daily ad impressions, 1.4 trillion advertiser bids daily, and 12.2 petabytes of new data processed every day. The company also has 1,778 direct publishers, and its operations span 18 offices and 12 data centers.
Super League Enterprise
Describing itself as "your rocketship to the Metaverse," Super League (SLE) is an up-and-coming adtech firm with some interesting advertising solutions in the Metaverse and gaming. In fact, the company specializes in connecting with gamers, not just in the games they play but also by pairing brands with well-known influencers who also connect with gamers wherever they are.
Super League has contracted with some very well-known brands for a wide variety of different campaigns. One of its more interesting and successful campaigns was Barbie Dreamhouse, which did quite well alongside the hit new Barbie movie.
The company also creates original media to help game developers grow their player base via advertising. Additionally, Super League has developed powerful analytics for brands seeking measured results for their Roblox activations.
Currently, Super League boasts over 120 million unique monthly players, over 1 billion impressions per month, and more than 700 creators using its technology. Additionally, the company developed over 100 branded programs in 2022.
Tremor International
Although Tremor (TRMR) trades on the Nasdaq, it does so as American Depository Receipt shares because it's actually based in Israel. The company operates an end-to-end technology advertising platform that spans video, data and CTV. Tremor's approach focuses on providing a full stack of end-to-end solutions that it says offers a sizable competitive advantage within the video ad ecosystem.
Tremor Video enables advertisers to deliver impact brand stories across all screens, combining innovative video technology with audience data capture and creative content. The company's offerings cover CTV, in-stream, out-of-stream and in-app options.
Meanwhile, Amobee provides optimized outcomes for media companies and advertisers by assisting customers with developing their audience and optimizing their cross-channel performance. Tremor's media side, Unruly, is a programmatic platform that drives positive outcomes in multi-screen advertising.
Viant Technology
Finally, Viant (DSP) describes itself as a "pioneer in people-based advertising," which it states is "the next evolution in programmatic technology." The company's offerings include tools that enable media owners and marketers to go beyond third-party cookies, enrich their own first-party data, and reach their targeted audiences across the newest and most up-to-date channels, all while measuring their advertising success.
Viant touted its successful ad campaigns with Walt Disney, diabetes-care brand Dentsu, a national furniture retailer and a leading U.S. automaker, among many others, citing promising data for each. Viant offers an industry-leading omnichannel demand side platform (DSP) that empowers marketers, a data platform integrated with its Adelphic DSP, and multiple advanced reporting tools to support marketers in their ad campaigns.
Investing in small cap adtech stocks
As time goes on, we'll surely see more and more advertising technologies put to good use as marketers look for new and better ways to connect with consumers. As a result, the rapid growth of the adtech market could make it an attractive industry for investors to consider.
In fact, adtech stocks in general have done exceptionally well in 2023, if the AdProfs AdTech Index is anything to go by. The index is up 37% year to date through midday on Nov. 17, versus the S&P 500's 18% gain and the Dow Jones Industrial Average's 5% gain.
In fact, the adtech index's return is in line with that of the tech-heavy Nasdaq Composite, which is up 36% year to date. The index includes half of the names on this list, alongside other well-known and widely recognized names like Taboola (TBLA) and The Trade Desk (TTD).
Of course, investors are always advised to do their due diligence before investing in any stock or sector.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Ari Zoldan
Ari Zoldan is the CEO of New York-based Quantum Media Group, LLC. The company provides investor relations, public relations and equity research services to publicly traded companies. As an on-air media personality, Ari can be seen regularly on major media outlets and is frequently quoted in mainstream news outlets covering business, innovation and emerging trends.
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