Why Focus on the Ads Business?

2025 May 15

Hypothesis: The ads business ecosystem will continue to present promising long-term investment opportunities.

To start, people interact with the ad businesses ecosystem everyday. We interact with ads in both the physical world and the digital world. We interact with ads across a range of settings including work, education, entertainment and home environments. We interact with ads in places where there are less wealthy and wealthier folks. To illustrate by borrowing from my own experience, I have seen the grand billboards of New York City's Times Square, and I have also seen the mid-roll clips playing on the screens of commuters in Manila.

The ads business ecosystem's widespread presence may be explained by Eric Seufert's framework that "Everything is an ad network". There is already at least a global USD 500 billion opportunity in ads businesses in search, e-commerce, video entertainment, social networks and display networks [1], [2]. [3]. The size of the opportunity likely approaches USD 1 trillion due to the ads businesses served by other consumer businesses: (a) in non-"tech" businesses such as the streaming businesses of entertainment companies, (b) in publishing businesses such as the newsletter businesses of independent analysts, (c) in transportation businesses such as the display network businesses in different vehicles, (d) in other types of businesses, and in (e) non-US based businesses. Given the size of the opportunity, entrepreneurial endeavors may prioritize competing in the ads business ecosystem.

Moving forward, the ads business ecosystem looks positioned to continue to grow due to several factors. One factor is a global trend in the acceptance of the monetization of all activities. To illustrate the monetization of activities, consider the following:

• The existence of service jobs marketplaces for almost any task
• The integration of ads into all content
• The normalization of memes financialization
• The growth in participation on betting on any events and outcomes

Over time, people seem increasingly willing to make the tradeoff that acquiring a product or service may involve an accompanying promotion for another product or service.

Another factor which may help the ads business ecosystem growth is the possibility of growth in the small and medium sized business participation. Around the world, there appears to be a decreasing job security for existing employees and increasing job requirements for prospective employees - both those with and without full-time working experience. As a result of this, more people may be incentivized to behave more entrepreneurially, and this may lead to more business formulation. With these businesses will come the need to compete, and marketing work streams are part of highly competitive businesses. Competition may spark willingness, however this may not necessarily unlock ability. Fortunately, there is also an improvement in the quality of tools available for businesses to participate in high performance marketing. These tools include Meta's Advantage+ and Google's Performance Max.

In conclusion, the ads business ecosystem will continue to present promising long-term investment opportunities due to the existing and potentially even greater prevalence of ads in people's experiences, and the existing and potentially even greater opportunities to monetization on those interactions.