Digital advertising's share of the global advertising industry continues to grow. That's understandable: Consumers are spending more time connected to the internet, and marketers want to be where consumers are.
In this segment from The Five, recorded on Dec. 14, 2021, Fool.com contributor Parkev Tatevosian discusses one stock he thinks could particularly benefit from this trend.
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Parkev Tatevosian: Sure, Trevor, you mentioned a lot of exciting industries and technologies that are growing. The one that I picked is digital advertising, and the one stock that I think that could benefit from that is Amazon (AMZN 4.44%). I think you mentioned earlier, global ad spending is rising, and digital is taking a larger share of the overall spending.
According to GroupM, global ad spending will increase by 23% this year to $763 billion, which is not too far off from the eMarketer estimate you mentioned earlier. Digital is estimated to make up 64% of that total this year, which is up from 61% in 2020, which was up from 52% in 2019. So, a nice trend upward of digital taking a larger share of overall advertising, and that makes sense. With the proliferation of online shopping, it only makes sense to increase advertising online.
People browsing on the internet or on their computers or phones, they typically have a payment method already on file, so if they see a compelling advertisement, there are only a few clicks away from buying something. Amazon stands to gain from this trend. It has hundreds of millions of shoppers that visit the site frequently. Already, Amazon's reported ad revenue has doubled since the second quarter of 2020, from $4.2 billion to $8.1 billion in its most recent quarter. So digital advertising is my investable trend, and I think Amazon is one company that can benefit from it.