Bank: “LADbible outperforming the market”
August 9, 2022
LADbible’s social media brands have an audience of around 1 billion, with 262 million followers globally and claims 28 billion content views every year.
Investment bank Berenberg has compared and contrasted the progress of LADbible, part of LBG Media, against some heavyweight peers including Google, Amazon, Criteo, Snap and ITV, and importantly, online and video advertising – the two areas that LBG is entirely focused on – and found LBG outperforming offline, out-of-home and brand marketing.
The bank’s report says: “We believe that this should help LBG outperform the general market, even if its business is generally more orientated towards brand rather than performance marketing. In addition, LBG has significant volume levers that it can pull in North America, where it is currently focusing investment to establish a direct route to market.”
The report adds: “Recent results across the media industry have shown that not all media channels are equal, with the divergence in performance likely to increase during a recession. Online and video advertising, particularly performance advertising (Google, Amazon, Criteo and Future), are outperforming offline, out-of-home and brand marketing (Snap and ITV).”
The bank says that while LBG leans more towards brand marketing than performance marketing, it has a material opportunity to increase revenue per user in North America towards that in the UK. If LBG increased its North American revenue per user to 30 percent of that in the UK, this would increase our FY 2022E/23E/24E revenue estimates by 73/63/61 percent respectively.
“We believe this, combined with a strong net cash balance to support future M&A, positions LBG to outperform the general media market. We reiterate our Buy rating,” says Berenberg.