Welcome to the New Age

Like it or not, there is no doubt that social media is now an integral part of our lives, with our online presence an extension of who we are, and for many, who they aspire to be. There were almost three billion monthly active users on Facebook in the second quarter of this year¹, some 37% of the global population. For a business, social media offers a treasure trove of potential customers, but still so many seem to get it wrong when advertising through these channels.

The genesis of the large US internet companies, such as Facebook, Google, and Snapchat are well known and in the case of Facebook, immortalised on the silver screen with the 2010 film The Social Network. The early days of LBG Media, a UK-listed digital publisher, were similar, with co-founders Solly Solomou and Arian Kalantari forming the business whilst studying at university in 2012. LBG Media operates multiple brands across social media to a global audience of over 315 million², predominantly made up of millennials and Gen Z – one of the most valuable segments to advertisers.

LBG Media’s business segment, LBG Direct, works closely with brands in launching successful advertising campaigns across the likes of Instagram and TikTok, harnessing its insights and expertise to successfully target the right audiences. LBG can also help clients by tapping into LADNation – its own youth panel with over 50,000 members to offer valuable feedback from a notoriously difficult group to reach.

The recent explosion of TikTok has made brands rethink their advertising strategies and move away from traditional forms of advertising such as TV. Young people now spend more time watching TikTok videos than they do watching broadcast TV³, spending almost an hour a day scrolling through the TikTok app. TikTok are notably reaping their newfound riches, with European revenues increasing six-fold last year⁴.

LBG Media offers investors the opportunity to capitalise on this change in how media is consumed and thus monetised. As more businesses look to develop effective marketing strategies, they will seek to partner up with companies, such as LBG, in order to target the right audience and not waste precious marketing dollars on a dud campaign; and who better to approach than the biggest publisher on TikTok, LBG⁵. That is certainly what Vodafone have done, partnering with LBG to create content for its VOXI mobile network.

With LBG’s share price falling significantly since Initial Public Offering last year, much like US social media giants Meta and Snapchat, the company now trades on a price-to-earnings ratio of just over 10 times⁶. With bright prospects such as expanding into the US where they reach around one third of the population, LBG could be an attractive investment for investors wanting exposure to the new age of advertising.

Sources: ¹Statista 2022, ²LBG Media plc, Half Year Results 2022, ³Ofcom, 2022, FT article referencing it,⁴FT article 2022, ⁵LBG Media plc, 2022, ⁶ Unless stated all figures sourced from Bloomberg Finance, L.P.