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These two areas are boosting the ad industry: Analyst

The Cannes Lions Festival kicks off next week, giving a preview of the current state of the advertising world. Citi Analyst Ygal Arounian joins Market Domination to discuss the sector and his top digital advertising picks.

Arounian states that the ad market is currently well positioned as digital advertising has had one of the strongest quarters in years. He adds, "so far, no signs of any cracks within the ad market. It seems to only be getting stronger from here," pointing to a boost from political spending and the Paris Olympics.

He notes that The Trade Desk (TTD) is performing well as the largest independent demand-side platform. He says that the company plays a significant role in CTV and retail media, and have been doing well in its overall transformation journey.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.


This post was written and updated by Melanie Riehl

Video transcript

Can Lions kicks off next week marking one of the largest annual gatherings in the world of ads.

The event coming amid a major ongoing shift in the world of advertising.

As linear TV declines streaming platforms are absorbing the revenue.

We're looking at how to navigate the shifting landscape with the Yahoo Finance playbook.

And we're joined by you all run in an analyst at city who's going to that conference, by the way.

Good to, I'm so glad to catch up with you before you head to the French Riviera for that conference.

I I'm just curious, what do you think is going to be sort of the main topic there?

Because we're at this really interesting juncture here where consumer spending seems to be showing some cracks, you know, but I'm sure that there, there's a lot of competition for those ad dollars.

Hey, Julia, thanks for having me.

Yeah, I think, look, this is the, the pre eminent uh conference within the, the advertising and digital advertising world uh for, for the whole year.

Uh We're, we're gonna see likely a lot of news coming out of the conference um last year coming out of the conference.

We kind of felt like the uh environment for advertising was getting stronger, I think over the course of, you know, the, the last year, uh the environment has gotten even stronger and stronger through to one Q results where really across the board from top to bottom across digital advertising.

We've seen uh probably one of the strongest quarters we've seen in, in a number of years uh from, from digital adverts.

So, so far, uh no signs of any cracks within the ad market.

Uh It seems to only be getting stronger from, from here.

Uh And we'll see what comes out of the conference next week.

So the conference next week you got, we also have, I mean, listen, we got the Olympics on deck, we have the election on deck.

How, how big a driver of those, how much are those tail winds for the online Adam A as well?

That they should both be a bi big tail end of political is expected to be a significant boost this year.

Uh You, you mentioned C TV and streaming uh that in particular is expected to be an area that sees a big boost from, from uh from political spending and, and, and Olympics as well.

It's likely less of a boost but, but it's certainly one that gets a lot of focus and attention and there are some deals around streaming uh with Paramount and NBC as well.

And so we expect a lot of focus, uh, on, on both of those things, uh, next week as well.

Um, Igal, you cover a lot of the companies that sort of do, help do programmatic ad buying online, et cetera.

And of course, there's been a big shift in how we search for things because of the A I summaries at the top of Google search results, at least.

Right now, how's that gonna affect those companies?

And what do you think we'll hear from folks at the conference about that?

Oh, that, that's an area where there's a lot of questions and, and uncertainty.

But so far, we really haven't seen any major shifts and I know it's still really early and things can certainly change.

So, you know, what we're starting to see is, is the A I uh company license deals for content, right?

The content is the data feed in, into the uh A I engines and LL MS is, is incredibly important.

And so we're starting to see more and more licensing deals uh for those uh for those a ill MS to, to, to, to feed off of.


And so the, the, the debate right now is whether the publishers are trading off uh near term uh near term fees, essentially for, for traffic over time.

And, and if people are going to spend more time within, within the search engine and those uh A I generated answers versus shooting over back back to those publisher websites and spending time there.


So this debate between spending the time in search and spending time across the open internet, I think that's gonna take some time to play out.

But so far we're seeing evidence that uh that generated, generated A I search results are actually pushing people back, back to the, to the publisher websites and it's feeding the ecosystem the way that it always has historically.


Besides gen A I, I'm just curious when you're talking to marketers and advertisers, what else sort of um what excites them, you all, you know, is it mobile display?

Is it, you know, is it video, is it live audio?

What do you hear?


There, there, there's a lot of things that, that, that are exciting right now.

Um You know, we've talked about C TV.

So that shift from linear to streaming TV.

That's uh 11 of the biggest, most important topics uh that we hear about and likely get a lot of focuses as well.

Uh And then, you know, retail media which is advertising on, on a retailer's website or you think uh at Amazon and uh sponsored listings and that's happening across multiple retailers right now.

That that's a, that's a big area of growth.

So A A I certainly will, will be a lot of focus C TV.

And then the shift away from third party cookies um and, and privacy where first party data is coming in to take a bigger picture of that also feeds into this retail media story, uh advertising on a retailer website, attracting buyers kind of at the bottom of the funnel on their, on their shopper journey where they're actually, you know, ready to make a purchase.

Uh Those are areas that are getting a lot of attention as well.

So new ways of being performing, performance related advertising, uh there's a lot of evolution within that.

Um We think we'll get a lot of focus in those areas.

And I just quickly what are some of your top picks in this space?

And so within my, my coverage, the the stocks that really fit in well to these themes are the, the trade desk.

They are, you know, the the largest demand side platform and independent demand side platform play a really significant role again in those pipes on C TV.

Um and, and, and within retail media and other areas as well.

But C TV has been the kind of core uh bread and other growth engine.

So that's really one that's at the top of the list.

And then critic has been really, has been kind of reinventing itself around retail media.

They've made a lot of progress there and they've become a really important uh ad tech player within retail media and they've been doing really well in their transformation journey as well.


Good to see you and Bon Voyage.

Look forward to hearing about all of the takeaways from that conference.

Appreciate it.

Well, Yahoo Finance is going to be on the ground there.

It can bringing you coverage all next week.

We've got some big interviews lined up, including conversations with the executives at Tell and Pinterest.

Stay tuned.

Coming up next.

We've got closing Bell and market domination over time.