3 Advertising & Marketing Stocks to Consider Amid Industry Woes

Industry Overview - The Zacks Advertising and Marketing industry is expected to return to pre-pandemic levels due to increased service activities and a rise in digital marketing [1][3] - Key players in the industry include Interpublic and Omnicom, with a focus on adapting to post-pandemic demands [3] Economic Factors - The industry benefits from economic recovery, with GDP growth of 2.8% in Q3 2024, following a 3% increase in Q2 2024 [4] - The Services PMI has remained above 50% for 51 of the last 54 months, indicating strong economic activity in the non-manufacturing sector [4] Demand and Revenue Trends - The industry is mature, with stable demand for services, and revenues are expected to reach pre-pandemic levels, allowing for stable dividends [5] - Digital media consumption is increasing, positioning agencies that offer digital marketing services for growth [6] Industry Performance - The Zacks Advertising and Marketing industry has underperformed the S&P 500, with a growth of 5.8% compared to the S&P 500's 30.4% and the broader sector's 24.8% over the past year [9] Valuation Metrics - The industry is currently trading at a forward P/E ratio of 10.37X, significantly lower than the S&P 500's 22.66X and the sector's 25.7X [11] Stock Recommendations - Gambling.com Group Limited (GAMB): Expected to benefit from digitization trends, with a 76% year-over-year earnings increase anticipated for 2024 and shares gaining 99.5% in the past six months [13][14] - Integral Ad Science Holding Corp. (IAS): Anticipated to see over 100% earnings growth year-over-year in 2024, with shares up 10.1% in the past six months [16][18] - Stagwell Inc. (STGW): Projected earnings growth of 41.5% year-over-year in 2024, with shares gaining 11.1% in the past six months [19][20]