A recent research piece by eMarketer, a leading market analysis firm, significantly raised expectations for the growth dead ahead in the digital ad space. This theme is very interesting for prospective investors because it represents a highly recession-resistant structural growth story with outsized potential, particularly in light of accelerating growth prospects highlighted by the research, which showed that ad spending will continue to grow on a global basis, with the lion’s share of that growth driven by digital ad placement.

The report suggests that investment in ad tech, data analytics, and ecommerce will be defining enablers in the boom. The analysis concludes that worldwide digital ad spending in 2019 will jump by 17.6% to $333.25 billion, pushing digital ad spending up to account for roughly half of all global ad spending for the first time in history.

We take a look at three interesting stocks that represent very different ways to play this theme for investors looking to capitalize on the rising tide: Trade Desk Inc (NASDAQ:TTD), Image Protect Inc (OTCMKTS:IMTL), and Telaria Inc (NYSE:TLRA).

Trade Desk Inc (NASDAQ:TTD) is a cloud-based advertising-buying platform. 

The company remains the best place to buy targeted ads in the Connected TV space, and supersedes basically anything else beyond Facebook and YouTube. The company’s competitive position is actually much stronger in the enterprise ad-tech ecosystem, which is why it has enjoyed such a powerful premium in terms of valuation.

Ad buyers can value each impression like traders value stocks, using first and third party data to decide which impression to buy and how much to pay. Its platform enables advertising clients to purchase and manage digital advertising campaigns across various formats, including connected TV (CTV), mobile, video, audio, display, social and native, on a multitude of devices, including smart TVs, computers, and mobile devices. 

There was very little action in the stock for at least a year until Q1 2018 results hit the tape and the world took notice of the stock (that was May 10). It has been off to the races ever since, powered by, a steady stream of new brands and agencies joining the company’s platform. Looking ahead, the company has expressed interest in Connected TV. 

As the company frames itself, it provides a self-service omnichannel software platform that enables clients to purchase and manage data-driven digital advertising campaigns in the United States and internationally. The company’s platform allows clients to manage integrated advertising campaigns in various advertising channels and formats, including connected TV, mobile, video, audio, display, social, and native on various devices, such as smart TVs, computers, and mobile phones and tablets. It serves advertising agencies and other service providers for advertisers. 

TTD has had a rough past week of trading action, with shares sinking something like -7% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -21%. 

Trade Desk Inc (NASDAQ:TTD) generated sales of $159.9M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 32.2% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($231.1M against $670.5M, respectively).

Image Protect Inc (OTCMKTS:IMTL) represents a very different investment proposition. The stock has been beaten down during its time as a traditional IP enforcement model play on the digital image rights market. But, over recent months, the company has reinvented itself and now poses an interesting take on the digital ad space.

In short, the company has launched the “Fotofy Image Marketplace” along with the Fotofy In-Image Ad platform. Together, they represent the ability of the company to provide image rightsholders with security through innovation and a market payoff – instead of enforcing copyrights, the company invites image owners to offer images up for free, with images carrying, inseparably, lines of code that provide for the image owner to activate an in-image advertisement wherever the image travels as it is shared throughout the web.

In other words, this is a pivot play that has only recently credibly joined the digital ad space. But, since the idea has gotten traction with investors, the shares are trading up significantly, rising on many times average trading volume so far every day this week as word gets around.

So we include it here even trading at less than a penny per share because the platform is viable and already gaining traction and the company has just launched a sophisticated analytics dashboard to allow individuals to become the owners of their own digital ad empires as they strive to produce viral images that carry the potential to become ad-supported passive income generators in the form of distributed digital billboards woven across the web.

Remember that cute picture you took of that remarkable thing that happened with that adorable whatever? With Fotofy, maybe it could make you an extra $50k bucks over the next 5 years after being shared and used in a thousand different places online. Or maybe you’re a professional photographer or digital artist. Fotofy could be just what you need to power your business to the next level.

That’s the basic idea. And the company’s addition of its new analytics dashboard creates a level of functionality that shouldn’t be ignored.

“This is the killer app that unlocks the power of Fotofy,” commented Matthew Goldman, CEO of Image Protect. “The power of this platform is in the user’s hands now, and that means the power to upload images and watch them go viral across the web, track them as they are used and shared, and then open them up as an advertisement platform to drive revenues and monetize the image. There’s nothing like this out there.”

“This is how a personal image library becomes a business for the casual photographer, and how professional photographers and image creators can expand with no risk of infringement,” continued Mr. Goldman. “And image users end up with a giant repository of free high-quality images for use and sharing as a result. Everybody wins. The launch of this new functionality is a huge moment for Fotofy. This is how it really gets going. And the timing couldn’t be better.”

This is a highly speculative idea, but it has the makings of something potentially quite interesting and may be worth a closer look.

Telaria Inc (NYSE:TLRA) frames itself as a company that provides a software platform for publishers to manage and monetize video advertising in the United States. 

The stock has pulled back aggressively in recent days along with many other software high-flyers and is now testing a range support level that is likely on a lot of radars. At 6x sales, the company’s Q3 guidance was a bit underwhelming (in-line revenue and EBITDA just below estimates). Guidance appears to be conservative given the tremendous CTV tailwind.

The company offers publishers with real-time analytics, data, and decisioning tools to control their video advertising business, as well as a monetization solution to optimize yield across a publisher’s supply of digital video inventory. Its technology enables publishers to manage and deliver their directly sold and programmatic video inventory through a single platform. 

Telaria Inc (NYSE:TLRA) generated sales of $18.2M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 33.7% on the top line.

In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($58.2M against $139.2M, respectively).

The company most recently announced a partnership with ABS-CBN Corporation, the largest media and entertainment group in the Philippines. ABS-CBN will use Telaria’s Video Management Platform to manage and monetize their OTT video inventory across all screens.