We recently compiled a list of the . In this article, we are going to take a look at where HubSpot, Inc. (NYSE:HUBS) stands against the other advertising stocks.
When compared to the copy driven model of the late 1900s as popularized by shows such as Mad Men, the advertising era of 2024 is completely different. Today, advertisers have at their disposal the data of billions of people which they can characterize according to preference and target their ads to. This growth in digital advertising has been driven by the rise of video streaming platforms and digital publications, which continue to gain market share over paper newspapers.
Nowhere else is the impact of digital advertising in today's era clear as through the value of the world's largest search engine company. A mega cap stock, this firm has a market value of a whopping $2 trillion, making it . Yet, in another case of 2024 being a historic year of shifts for the technology industry as evidenced by technologies such as artificial intelligence, this firm is also facing the heat from the US government which might end up changing the very fabric of the industry.
The search engine giant, which earned $187 billion in trailing twelve month revenue from search and advertising, traces its roots back to the late 1990s when its founders created an algorithm called PageRank. This software determined which webpages were authoritative based on the amount and quality of backlinks they got, and as the engine grew, so did the firm's dominance in the global advertising industry as it processes more than 22 billion searches per day. However, this gravy train might be ending as a Washington judge ruled in August that its $26 billion in payments to other firms to make the platform the default option on their devices was an anti competitive behavior that locked others out in the industry.
Following the ruling, there are rumors that the Justice Department might be considering breaking the company up by making it divest its mobile software and web browsing business divisions. However, any such decision will require court approval which will force the firm to comply. And while a court victory is great for news headlines, the US government has rarely broken up large companies in the modern era.
The last such case was in 1982 through the breakup of the Bell System, and even if the browser and OS were made separate businesses, they are unlikely to survive on their own since both are provided to users for free. Not to mention, the long drawn nature of anti-trust action could take years, and end up being enforced when the industry is vastly different from what it is now. This is because artificial intelligence is gnawing at the heels of the industry, with products such as OpenAI's SearchGPT already in early stage releases.
Speaking of AI, it's also making its mark on the advertising industry. Just as advertisers are able to rely on millions of users' data through search and social media platforms, AI helps them navigate through this data in novel and new ways. As per McKinsey, marketing and sales could see a $931 billion productivity boost from AI through new features such as personalized campaigns and improved data use.
These use cases have already become apparent, with the largest social media company in the world regularly sharing updates about how it is using AI to make advertisers' jobs easier on its platform. Two tools that it offers are the Advantage+ and Advantage+ Shopping platform which enables advertisers and sellers to automate their campaign operations and determine the best advertisements to run. The platforms also appear to be driving results, with the that is "demonstrating 22% higher return on ad spend for US advertisers after they adopted Advantage+ Shopping campaigns" with revenue for the firm through the two AI platforms .
Speaking of revenue, the advertising industry's spending, which determines the fate of publishers is also determined by the state of the economy, consumer confidence, and advertisers' outlook. One such firm with brands in more than 100 companies shared during its that while the advertising market is not at its best right now, it does appear to be recovering. This recovery is taking place in areas such as food and technology which joins strong performance in healthcare, pharmaceuticals, and beauty care.
Another publisher, which is one of the most well known digital media and lifestyle platforms in the world that relies on programmatic advertising (data driven user targeting through ads), saw its during Q2 even as broader advertising revenue dropped by 19% annually. With these details in mind let's take a look at which advertising stocks to buy according to short sellers. For stocks that are driving advertising technology, you should check out .
To make our list of the best advertising stocks to buy according to short sellers, we listed the NASDAQ and NYSE listings of an advertising ETF by the percentage of shares outstanding that were sold short and selected the stocks with the lowest percentage. An added 23 stocks after an internet search were also analyzed, but all these had market caps below $300 million so they were excluded. For these stocks, we also mentioned the number of hedge fund investors.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points ( ). A team of software developers gathered around a monitor discussing a new CRM platform.
HubSpot, Inc. (NYSE: ) HubSpot, Inc. (NYSE:HUBS) is a cloud computing company that offers marketing and sales products through its Sales Hub and Marketing Hub platforms.
It is one of the companies in the market that is offering AI and machine learning features to its marketing and sales customers. HubSpot, Inc. (NYSE:HUBS)'s new AI features, 70 of which were announced earlier this year, enable brand management for marketers such as allowing them to use a singular theme for their campaigns.
Machine learning features are offered as part of the Marketing Hub, and like its peers in the cloud computing and SaaS industry, HubSpot, Inc. (NYSE:HUBS)'s revenue is vulnerable to economic downturns which slow down business spending. However, its size and customer base (HubSpot, Inc.
(NYSE:HUBS) had 228,000 customers as of Q2 end) means that the firm benefits from deep industry partnerships that allow it to position itself for an economic recovery. HubSpot, Inc. (NYSE:HUBS)'s management shared key details for its marketing platform during the : "Overall, we continue to have high conviction that the pricing change is the right decision for our customers and therefore, for HubSpot.
To round out Q2, let’s talk about the innovation we drove with our Spring Spotlight product launches and how they’re driving momentum. In April, as part of our first Spring Spotlight, we introduced major updates to Service Hub and launched Content Hub. The Service Hub update was a big unlock.
It now supports both customer support and customer success teams on a single unified platform. We saw the number of wins with 100-plus service seats grew 55% year-over-year and 30% year-to-date. In addition, we saw a 200% increase in portals closing ticket in help desk since the relaunch.
In terms of Content Hub, our goal is to provide an AI-powered content marketing solution that can help marketeers create and manage content. And the response has been fantastic. The attach rate for Content Hub to Marketing Hub has tripled since the launch and is now nearly 50% for new marketing hub wins.
This high attach rate is being driven by innovative AI features like content remix, AI blogs and brand voice. Brands like Tripadvisor, World Widelife Fund for Nature and Morehouse College, are all using HubSpot content solutions to grow. Overall, we’re thrilled to see our product innovation drive value for our customers.
" Overall HUBS on our list of the best advertising stocks to buy according to short sellers. While we acknowledge the potential of HUBS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than HUBS but that trades at less than 5 times its earnings, check out our report about the .
Disclosure: None. This article is originally published at ..
