Even During a Recession, These 2 Ad Tech Companies Can Stand Out
Regardless of whether the U.S. is officially in a recession or not, the previous earnings season's results included many signals the economy is slowing. That doesn't bode well for any company that derives its revenues from the advertising industry, as businesses typically slash their ad budgets when belt-tightening is called for. It's an easy expense to control, which is why ad spending fell 27% during the Great Recession in 2008.
However, two ad-related companies that can shrug off this trend are The Trade Desk (NASDAQ: TTD) and PubMatic (NASDAQ: PUBM). These two programmatic ad-tech businesses are somewhat insulated from declines in the broader advertising industry. As a bonus for investors, the companies are young and growing briskly. And even though their industry may face headwinds for some time, these two have the potential to outperform their peers and the market long term.
In a digital ad sale, there are two sides to the transaction -- demand (the ad space buyer) and supply (the ad space seller). The demand side consists of businesses that want to advertise their product or service to customers, whereas the supply side is any business that has ad space to sell, whether that's on a website, connected-TV platform, etc.
Source Fool.com
