These 3 Small-Cap Stocks are Making a Killing With Next-Gen Ad Tech

Small-Cap Stocks

The world of Mad Men is dead. No longer do advertisers sit around in Manhattan skyscrapers, glass of scotch in hand, talking poetically about selling Ketchup. Nowadays, only cutting-edge technology leads to the most successful ad campaigns. Whether talking about large-cap or small-cap stocks, whoever has the best ad tech has the best marketing strategies.

These days, ad tech is commonly associated with the process of programmatic marketing. Programmatic uses artificial intelligence to optimize audience targeting, content placement, and ad spend in the blink of an eye. It’s the next generation of marketing.

Through real-time bidding exchanges, AI-powered software and algorithms compete for ad space. Studies show that this is faster, cheaper, and more efficient than traditional methods of advertising.

Not convinced? Well, the advertising world is. According to eMarketer, this year, advertisers in the US will spend nearly $60 billion on programmatic display. Worldwide, digital ad spending will be $333.25 billion this year.

All this money flooding into the market isn’t just going towards the large-cap ad agencies. Small-cap stocks are seeing plenty of growth as well. Let’s highlight some of the fastest-growing companies that are turning programmatic marketing methods into serious revenue.

Small-Cap Stocks: Telaria

Telaria Inc. (NYSE:TLRA) offers its clients programmatic software that optimizes campaign results for video publishers.

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Programmatic video advertising is a relatively new but incredibly important segment in digital advertising. Of the $60 billion that US advertisers will spend on programmatic practices this year, $29.24 billion will go towards video advertising.

Throughout 2018 and most of 2019, Telaria has generated non-stop revenue. Connected TV revenue grew 322% year-over-year in 2018, and this year accounts for almost 1/3 of the company’s total revenue. On top of that, Telaria is forecasting an increased demand for its devices, which will enable them to capture more market share.

Telaria shares have added about 174.7% value since the beginning of the year. The consensus among analysts is that the company will turn a profit in 2020.

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Small-Cap Stocks: AcuityAds

Technically a micro-cap stock, AcuityAds Holdings Inc. (TSX:AT) (OTCQX:ACUIF) is a much less expensive buy than Telaria but shows an equal indication of growth.

Just days ago, the company received the Deloitte Enterprise Fast 15 award. The award recognizes the fastest-growing enterprise-level tech companies in Canada by revenue-growth percentage over four years. It also ranked on Deloitte’s Technology Fast 500, for fast-growing tech companies in North America.

Acuity’s revenue for the three months ended September 30, 2019, was $26.9 million, representing year-over-year growth of 55%. As the company’s market cap is currently just under 60 million, its profit is incredible for its tight share structure.

Towards the end of October, AcuityAds announced that its recently enhanced AI algorithm has led to an average 15% improvement in campaign ROI. This is good news for Acuity’s clients and an exciting time for one of the fastest-growing ad tech companies out there.

Small-Cap Stocks: Rubicon

Though the Rubicon Project Inc. (NYSE:RUBI) recently posted a quarterly loss of $0.02 per share, RUBI shares have added about 137% value for the year-to-date.

Despite its historic price volatility, Rubicon stock is considered undervalued by Simply Wall St analytics. Its revenue is forecast to grow 17.3% per year, but expect another three years to pass before the company turns a profit.

The Rubicon Project is more of a long-term play than Telaria or AcuityAds, but it’s still highly promising. Don’t take your eyes off of RUBI or its contemporaries, especially as programmatic advertising continues to define digital marketing in the 21st century.

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Featured image: DepositPhotos © garagestock

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