The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. It carries a Zacks Industry Rank #31, which places it at the top 12% of more than 250 Zacks industries. The Zacks Internet - Content industry is housed within the broader Zacks Computer and Technology sector. Zacks Industry Rank Indicates Bright Prospects The California Consumer Privacy Act, which restricts the sale of user data, among other things, is another headwind for the industry participants. The implementation of General Data Protection Regulation, which took effect on May 25, 2018, in the EU, adds to the concerns. The China government has a number of regulations related to direct advertising, which is a prime revenue source for these companies. Increasing Regulations Mar Prospects: Industry participants involved in online search and other social-networking activities are increasingly facing regulatory pressure, particularly in China and the European Union ("EU"). However, macro-economic challenges, lingering effects of the pandemic, raging inflation and higher interest rates are expected to hurt ad spending in the near term. The reopening of economies is driving the recovery in ad spending, which bodes well for the industry participants in the long haul. Also, the industry is dependent on consumer spending trends, making holiday spending a major deciding factor. Advertising and subscriptions are major revenue sources for these companies. Industry Prospects are Driven by Ad Spending Rate: Industry participants are focusing on marketing efforts to boost traffic to websites. Moreover, the proliferation of smart devices and increasing automation of the application development process bodes well. An expanding range of mobile, digital and cloud-based offerings by industry participants is a major growth driver. 3 Trends Shaping the Future of the Internet - Content Industryĭemand for Digital Offerings Growing: The industry is characterized by rapid technological change, frequent product and service introductions, and evolving standards. Apart from the United States, a number of companies in this industry are located in Israel, the U.K., Germany, Russia and China. They are also expanding their presence across social media, display and connected TV, and search. Therefore, these companies are trying to expand their digital presence to win customers. The industry is witnessing a rapid change in consumer behavior and ongoing digitalization.Īdvertising is a major revenue source for industry participants. The Zacks Internet – Content industry comprises providers of video encoding platforms, personal services, Internet content and information, staffing and outsourcing services, publishing, capital markets, media-based, home service, digital insights and measurement, stock photo, video and music licensing, and online travel companies. The ongoing war between Russia and Ukraine has been an overhang on the prospects of the industry participants in Europe. Persistent inflation and higher interest rates are having a detrimental effect on ad spending, the primary revenue source for the industry participants. However, the industry has been suffering from the reversal of the pandemic-led trends, along with challenging macro-economic conditions globally.
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