In 1994, US phone giant AT&T paid $30,000 (then worth £20,000) to run an advertisement on internet-based magazine HotWired. It was the first online advert ever – and it worked.
The online advertising market has come a long way since then, with firms spending more than $500 billion a year promoting their wares online.
Google dominates the market but times are changing. TikTok is increasingly the place of choice for younger generations, with one billion users. And 40 per cent of 18 to 24-year-olds turn to TikTok or Instagram if they need to search for something online.
Finger on the pulse: TikTok is increasingly the place of choice for younger generations, with one billion users
YouTube, Pinterest or Snapchat devotees may be equally dismissive of the world’s biggest search engine. But CentralNic helps businesses overcome this hurdle, using sophisticated technology to direct consumers from social media sites to companies advertising on Google, from dentists to local builders.
The business is growing at a rate of knots and results, out tomorrow, should show a 77 per cent increase in 2022 sales to $728 million with underlying profits up 84 per cent at $85 million. Online advertising is delivering the paciest growth, but the company also helps firms to build websites, providing a steady source of annual revenue.
Midas recommended CentralNic at 51p a share in 2017, since when the business has expanded both organically and through acquisition.
In December, long-standing boss Ben Crawford stood down and his finance director Michael Riedl took the reins. Under Riedl’s stewardship, the group is expected to spend less on acquisitions and may even start paying a dividend, possibly this year.
Midas verdict: CentralNic shares are £1.40 so they have nearly trebled over the past five years. For nervous investors, this could be a good opportunity to sell out and bank the profits. Others may choose to stick with Riedl. The stock is comparatively cheap, a large investment firm has been buying shares in recent weeks and supportive brokers believe the price should hit £2.50 within the next 12 months.
Traded on: AIM Ticker: CNIC Contact: centralnicgroup.com or 020 3388 0600
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