State of Marketing Q3 2018: Introduction

In this series of posts by the Trust Insights team, we’ll be examining the earnings calls of major publicly-traded companies in the marketing space to get a sense, a pulse of the marketing industry. We’ll look at dozens of companies in the marketing space, all publicly-traded, to see what’s on executives’ minds.

The Stock Basket

First, what companies are we examining in this series?

• WPP : WPP Plc
• SHSP : SharpSpring, Inc.
• SEND : SendGrid, Inc.
• IZEA : IZEA Worldwide, Inc.
• MKTO : Marketo
• ORCL : Oracle Corporation
• ADBE : Adobe Systems Incorporated
• HUBS : HubSpot, Inc.
• TWLO : Twilio
• RNG : RingCentral, Inc.
• GOOG : Alphabet, Inc. Cl C
• MSFT : Microsoft Corporation
• SAP : SAP AG
• CRM : Salesforce.com, Inc.
• SPOT : Spotify
• P : Pandora Media
• YELP : Yelp
• ZNGA : Zynga
• WIX : Wix.com
• SNAP : Snap Inc.
• FB : Facebook
• GCI : Gannett Co., Inc.
• NCMI : National CineMedia, Inc.
• TLRA : Telaria, Inc.
• FLNT : Fluent, Inc.
• FB : Facebook
• QNST : QuinStreet, Inc.
• MRIN : Marin Software
• SRAX : Social Reality Inc.
• TTD : The Trade Desk
• RUBI : The Rubicon Project, Inc.
• CRTO : Criteo S.A.
• CCO : Clear Channel Outdoor Holdings, Inc.
• OUT : Outfront Media, Inc.
• LAMR : Lamar Advertising Company
• BABA : Alibaba Group Holding Limited
• EBAY : eBay Inc.
• PYPL : PayPal Holdings, Inc.
• ETSY : Etsy, Inc.
• SHOP : Shopify
• TWTR : Twitter, Inc.

While this list will change over time as acquisitions and other business events occur, this is overall a reasonably good sample of the publicly-traded companies that exert significant influence over marketing. Why? This basket of companies represents online and offline, B2B and B2C marketing companies.

Q3 2018 Retrospective

Because of the number of ad firms, we see significant seasonality in marketing stocks, with big results typically in the fourth quarter as holiday retail seasons boost performance and profitability. Since the 2008 recession, marketing stocks have followed the broad stock market and increased substantially in value. Q3 2018 represents a 20-year high water mark for these companies (for those stocks that existed that long):

The key question on everyone’s mind is: where is the top? Was Q3 it? So far, stocks in Q4 are down about 8% from the Q3 peak. Only time will tell whether investors’ confidence in marketing companies will buoy the stock prices upwards in the remainder of Q4 or whether Q3 was the high water mark.

Winners and Losers Thus Far

The biggest drops quarter-over-quarter from Q3 to Q4 thus far are:

• Snapchat, down 40% from Q3 average price
• Marin Software, down 37%
• Social Reality, down 35%

The biggest increases quarter-over-quarter from Q3 to Q4 thus far are:

• Clear Channel Outdoor, up 22%
• Fluent, up 18%
• Sendgrid, up 14%

Here’s how all the stocks break out in quarter-over-quarter changes:

What’s behind these major changes? Is something else at work?

Stay tuned as we dig into these companies in the next few posts in this series.