Raymond James hosted an online advertising conference call with an industry expert. The expert has visibility into ~$2 billion of spend with a mix similar to the ad industry and diversified across Fortune 1,000 advertisers.
Raymond James viewed the experts' commentary positively, given only modest deceleration expectations in y/y growth rates in 2Q.
The 2022 budgets have trended down modestly due to inflation impacts on the consumer, the Ukraine crisis, and supply issues. Therefore, the expert expects ~25% y/y growth in 2022 vs. 30% initially.
Platforms more exposed to direct response advertising expected to hold up better and noted Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) Google Search had relatively stable growth rates in 2Q.
The expert saw a modest slowdown in Meta Platforms Inc (NASDAQ:META) growth rates in 2Q with somewhat lower ROI.
Meta is best positioned to improve its targeting/measurement given its scale with increasing traction from Reels.
Snap Inc (NYSE:SNAP) growth slowed modestly, and the expert believes Snap revised outlook may be more due to overly optimistic initial guidance vs. a significant change in industry fundamentals.
The expert remained positive on programmatic trends, was upbeat on the CTV growth outlook, and highlighted TTD and strength in ad verification companies (like Integral Ad Science Holding Corp (NASDAQ: IAS)).
Netflix, Inc (NASDAQ:NFLX) has the option to become a walled garden but will likely have open inventory for its distribution partners.
Following the call, Raymond James remains constructive on the online advertising group. Its top picks include Alphabet, Meta, and Integral Ad Science.
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