Love them or hate them, ads are part of our daily lives. And one Motley Fool contributor thinks that makes them an investable trend.
In this clip from "Ask Us Anything" on Motley Fool Live, recorded on March 30, Motley Fool contributor Jamie Louko describes three reasons he's bullish on the digital advertising space.
Jamie Louko: For me, there are so many opportunities. When you ask this question, five ideas quickly came to mind. But one of the ones that I am most confident in is digital advertising. That may seem boring because we see ads on our websites or on our streaming platforms. We see that all the time. That's not new, that's not the future, that's here now. But I really think that it's going to become more prevalent and digital advertising will be the main way of advertising in the future. I really think it has a lot of benefits compared to traditional advertising methods. I use the traditional billboard, for example. When we compare digital ads to billboards, it's so much better to advertise digitally because there's just so many advantages.
First of all, it's trackable. You can monitor the success, the viewership, the engagement of those digital ads whereas you can't necessarily track, "Hey, this is how many cars driving by saw my billboard today or in the past month." You can't do that with some of these traditional advertising methods. The second is that digital advertising allows you to target a specific audience. With the billboard on the side of the highway, you're getting everybody. Whereas if I am a dog company and I wanted to advertise digitally, I could target or at least try to target pet owners or people that have been visiting pet websites or something like that. You can target those ads to a specific audience that you think will be converted into actual clicks or different types of engagement better. Lastly, it's changeable. You can tweak your ad slightly, you can change it to a different format on digital methods whereas you can't do that on something like a billboard. Once you put that billboard up, it is there. You really can't change it or at least it's a lot of work to change it. I really think that because of all of these things that make digital advertising better than some of these traditional advertising methods, I think that digital advertising just going to explode. This is a study from PubMatic in 2021, the global digital ad spend was $439 billion. In just three years in 2024, that's expected to grow to $627 billion. That's 43% growth in just a handful of years. Really just expected to explode rapidly. If you're asking me personally, I think that that trend of growth is going to continue for the next 10 years until maybe even 2023. I really just think that digital advertising is going to become the mainstay way that businesses advertise to consumers like us.
