3 Advertising & Marketing Stocks to Watch From a Thriving Industry

Industry Overview - The Zacks Advertising and Marketing industry includes a wide range of services such as advertising, branding, digital marketing, and healthcare marketing, with key players like Interpublic and Omnicom [2] - The pandemic has significantly changed how industry players operate, leading to a focus on strategic initiatives and demand sources to adapt to the post-pandemic environment [2] Current Economic Context - The economy showed resilience with a GDP growth of 4.4% in Q3 2025, up from 3.8% in Q2, and non-manufacturing activities remained strong, as indicated by the Services PMI staying above 50% for 19 consecutive months [3] - Demand for services in the industry is stable, with revenues and cash flows expected to gradually return to pre-pandemic levels, supporting stable dividends for most players [4] Digital Marketing Trends - There has been an increase in digital media consumption, with consumers spending more time on various platforms, benefiting agencies that provide digital marketing services [5] Industry Performance and Valuation - The Zacks Advertising and Marketing industry currently holds a Zacks Industry Rank of 90, placing it in the top 37% of 243 Zacks industries, indicating solid near-term prospects [6] - Over the past year, the industry has underperformed the S&P 500, declining 25.3% compared to the S&P 500's growth of 14% [7] - The industry is trading at a forward P/E ratio of 8.83X, significantly lower than the S&P 500's 22.52X and the sector's 18.01X, with historical trading ranges between 7.47X and 14.26X [10] Company Highlights - Publicis Groupe S.A. (PUBGY): The company has shown strong organic momentum, with investments in AI and talent leading to higher revenue quality and margin strength. The Zacks Consensus Estimate for its 2026 earnings has been revised upward by 3.1% to $2.35 [14][15][16] - Omnicom Group (OMC): The company offers a broad range of services and focuses on consumer-centric solutions, which helps in driving stable revenue growth. The Zacks Consensus Estimate for its 2026 earnings has been revised upward by 2.5% to $9.58 [19][20][21] - Stagwell (STGW): The company emphasizes a digital-first marketing approach and has maintained its 2026 EPS estimate at $1.1, indicating stability in its earnings outlook [26][23]