The rise in manufacturing and service activities, along with increased digital marketing services and the success of the work-from-home trend, is enabling the Zacks Advertising and Marketing industry to counter the prevailing pandemic-related challenges.
Customer-centric approaches to business, digital strategies and technology investments are helping Publicis Groupe S.A. PUBGY, Gambling.com Group Limited GAMB and Harte Hanks, Inc. HHS to sail through the current testing times.
About the Industry
The Zacks Advertising and Marketing industry comprises companies that offer an extensive range of services, including advertising, branding, content marketing, digital/direct marketing, digital transformation, financial/corporate business-to-business advertising, graphic arts/digital imaging, healthcare marketing and communications, and in-store design services. Prominent players from the industry include The Interpublic Group of Companies and Omnicom. The pandemic will continue to change the way industry players have conducted business and delivered services so far. Currently, the industry’s key focus is on channelizing money toward media formats and devices. To position themselves suitably in the post-pandemic era, service providers are increasing their efforts toward formulating strategic initiatives and identifying sources of demand.
What’s Shaping the Future of the Business Services Industry?
Economic Recovery: The industry is a beneficiary of manufacturing and service activities. Economic activities in both manufacturing as well as service sectors are in the pink. Both the manufacturing PMI and the Services PMI measured by the Institute for Supply Management have stayed above the 50% mark for the past 29 consecutive months, indicating continued expansion.
Reviving Demand: The industry is mature, with demand for services remaining strong over time. Revenues, income and cash flows are anticipated to gradually reach pre-pandemic healthy levels, aiding most industry players in paying out stable dividends.
Digital Marketing Gathering Steam:Amid the pandemic, digital media consumption has shot up, with consumers spending more time on various media platforms and video-streaming services. Thus, agencies offering digital marketing services stand to gain, as these firms are better positioned to address the rapid change in customer preference. According to Magna’s most recent forecast, ad dollars in the United States will reach $323 billion in 2022, crossing the $300-billion mark for the first time.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Advertising and Marketing industry, housed within the broader Zacks Business Services sector, currently carries a Zacks Industry Rank #84. This rank places it in the top 33% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates solid near-term growth prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock market performance and current valuation:
Industry’s Price Performance
Over the past year, the Zacks Advertising And Marketing industry, the S&P 500 composite and the broader sector witnessed a decline. The industry has declined 26.7% compared with the S&P 500 composite’s decline of 15.9% and the broader sector’s 40.2% decline.
One-Year Price Performance
Industry’s Current Valuation
On the basis of the …….