In this article, we will look at the 10 Worst Marketing Stocks to Buy. Let’s look at where Perion Network, Ltd. (PERI) stands against other worst marketing stocks.
The marketing and advertising industry is a vital part of our economy, playing multifaceted roles in facilitating market efficiency, nurturing creativity and innovation, and driving growth. According to a report by Solomon Partners, global advertising growth for 2024 is expected to fall between 4.6% and 7.2%. This amounts to nearly double the anticipated growth rate of 2%- 5% for 2023.
The Paris Olympics and impending US elections are the primary reasons behind this surge in growth anticipation. The report further highlights that out-of-home advertising is expected to have the highest ad spending growth year over year, at 7.2%. Digital ad spending takes the second spot, at 6.3%. On the other hand, print ad spending is expected to fall by 4.6% year over year.
Macroeconomic improvement in the second half of 2023 and a positive economic outlook for 2024 are further expected to drive this growth. Inflation is also cooling down in 2024. In addition, the Federal Reserve cut interest rates recently by 0.5 percentage points. Since economic instability is typically cited as a primary reason behind advertisers’ spending cuts, the expectation of rising economic stability and growth is highly likely to fuel advertising spend.
A study by Dentsu revealed that the top twelve global markets are highly likely to increase their advertising spending by 13% as a percentage of GDP in 2024. This suggests that advertising spending exceeds macroeconomic growth.
According to estimates from IBISWorld, industry-wide revenue in the advertising sector has been growing at a compound annual growth rate of 2.7% over the past five years. It is expected to reach $70.1 billion by 2024, increasing by 1.9%. Profit is also anticipated to grow by 6.6%. According to a report by Mordor Intelligence, the online advertising market is valued at $257.97 billion as of 2024. It is expected to increase to $431.76 billion by 2029, growing at a compound annual growth rate of 10.97% in the forecast period.
However, with the market becoming increasingly saturated with political content, the landscape is anticipated to become more challenging for non-political companies attempting to get their message across.
Similar to other areas of life, AI is changing the marketing industry at unprecedented speed. According to a January 2024 Foundation AI Survey, nearly 84.8% of the marketing pros respondents claimed to use AI in their workplace. In addition, a significant majority said that they use AI to improve their performance on a daily basis. The most common usage of AI in the industry is content creation, as cited by around 87% respondents. Other popular applications of artificial intelligence among marketing respondents included keyword research (42%), email marketing (39%), social media (39%), and note-taking (36%). When asked about the importance of AI to their job, 32% voted in favor of it being “very” important. 33% claimed it to be “Moderately” important, while 9% said that it was “very” important.
According to a report by McKinsey, around 75% of the value delivered by generative AI use cases could fall across four key areas: marketing and sales, customer operations, software engineering, and R&D. A suitable marketing use case is the application of generative AI to generate creative content, including personalized emails. The measurable outcomes of this application are likely to slash the expenditure of generating such content, along with an increase in revenue by using specially curated creative content with high efficiency.
McKinsey identified 63 generative AI use cases across 16 business functions, calculating a total value of economic benefits in the range of $2.6 trillion and $4.4 trillion per annum when applied across industries. This is one of the primary reasons why marketers across the globe are scrambling to advance their AI capabilities. Marketers are increasingly leveraging AI-powered tools to personalize content for higher engagement, automate tasks, and expedite content generation, all adding to efficiency and cost-reduction.
To list the 10 Worst Marketing Stocks to Buy, we used the Finviz screener, ETFs, and related articles to compile a list of 20 marketing stocks. Next, we narrowed our list of stocks by selecting those with high short percentage of float. Finally, we ranked the stocks in ascending order of their short % of float. We also included the number of hedge funds for each stock for additional insight.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Worst Marketing Stocks to Buy
10 Worst Marketing Stocks to Buy
Short % of Float: 3.14
No. of Hedge Funds as of Q2 2024: 22
Perion Network (NASDAQ:PERI) is an Israel-based digital advertising company. It provides publishers, brands, and agencies a holistic ability to identify and resonate with their customers across all channels through high-impact creative units. These units are managed by the company’s proprietary Intelligent Hib (iHUB), which also offers cross-sell.
The company operates in three primary segments of digital advertising: social media, ad search, and display, video, or CTV. SORT technology is another technological solution from the company. SORT alternative technology operates as a machine learning model that examines millions of data combinations to develop cookieless targeting groups. These groups consist of people who react to and think about ads like one another. The company thus provides the very technology that fits a brand’s goals, fitting the brand strategy like a globe.
Perion (NASDAQ:PERI) is on the path to tackling the labyrinthine digital advertising industry using technology. It identifies, connects, delivers, and measures compelling messages across various platforms and screams, utilizing its clients’ advertising budgets to the fullest. The company made significant advancements for growth and expansion in its recent quarter, securing crucial partnerships and integrations. Powered by a strong double-digital growth rate, its core growth engines are running on positive momentum.
Last year, it acquired Hivestack, a programmatic digital out-of-home technology, and is reaping positive results from the acquisition. The company also expanded its global footprint, improved its ability to allow advertisers to deliver omnichannel experiences, and added a solid growth engine. Perion’s (NASDAQ:PERI) CTV Solutions are especially bringing out positive results. The company is leveraging its advanced location-based capabilities to drive meaningful results for advertisers. For instance, its CTV Golden Corral Campaign directs viewers to their closest restaurants, by using locations of the restaurants and integrating them into brand creatives by employing advanced dynamic creative technology.
Apart from hungry customers, commerce and retail advertisers also benefit from the company’s initiatives to drive meaningful results from retail campaigns. For example, it rolled out the click-to functionality, allowing advertisers to embed a direct-to-cart CTA inside the ad. This creates an expedited path to consumer purchase, benefitting advertisers and establishing Perion as a significant force in the field.
Overall, PERI ranks seventh among the worst marketing stocks to buy now. While we acknowledge the potential of marketing companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PERI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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