Did you know that in 2018 alone, internet users spent a collective 2.8 MILLION years online?
And over 33 percent of that time was spent on social media platforms like Facebook or Twitter.
These websites have become some of the most valuable companies in the world…
And that’s all thanks to the data they extract from their users.
While it doesn’t seem like an exciting market at first glance, data is reshaping the world as we know it.
In fact, data is quickly becoming a commodity more valuable than gold, silver...
And even crude oil.
Lou Schwartz, a pioneer of internet streaming and CEO of Frankly Media (TSXV:TLK, OTCQX:FRNKF) notes, “the digital world is undergoing an evolution of sorts, where the old way of doing things just isn’t cutting it any longer.”
And he’s got a point. As the market for data continues to grow, it’s becoming a vital part of every industry from advertising to urban planning and beyond.
Consider this: The revenue of the global digital advertising market is estimated by some to reach nearly $665 billion by 2026.
In the U.S. alone, this is a $100 billion market… and 80% of it is in hands of tech giants Google and Facebook.
It is a market ripe for innovation and disruption, and one that savvy investors should be following closely as the fourth industrial revolution speeds up.
Here are 3 three trends to watch as the next great digital revolution takes place.
1. The Evolution Of Media
The emergence of internet news, streaming television, and an infinite amount of content on-demand has left media companies at a curious crossroads.
Newspapers are floundering, television channels are scrambling to find new ways to drive up their dwindling viewer numbers, and even major websites are struggling to maintain their ad revenue.
But some companies are taking innovative new approaches to tackle these issues.
Take Frankly Media (TSXV:TLK, OTCQX:FRNKF), for instance. Frankly is a relative newcomer in this field but already has over 1,200 digital news, information and entertainment properties across the United States.
And in its latest acquisition of Vemba, a video streaming giant, it’s gained both CNN and Vice Media as new customers, opening up a new revenue line worth millions per year.
But that’s only the beginning.
With over 100 million users across its platforms, Frankly is able to reach over 80 percent of all American households.
Thanks to that influence, Frankly is positioning itself to become a data factory that has the potential to rival the likes of hundred-billion-dollar tech giants.
And it’s the quality of its data that makes it such a powerful contender. The information that Frankly collects is important because it is primarily first-party data...the good stuff.
Information about users’ browsing habits, purchasing habits, and much more.
This gives Frankly (TSXV:TLK, OTCQX:FRNKF) a potential leg up in a market that’s expected to surpass a half a trillion dollars in the next few years.
And in its latest deal with publishing giant Newsweek, it’s set to add another 40 million users to its reach, meaning even more information to harness as the industry continues to grow.
That’s powerful. And it can be leveraged to turn this small $30 million-dollar company into a true powerhouse in the industry worth tens of billions.
The best part? It’s still early enough to jump on board and potentially see returns on your investments that surpass those of even Big Tech giants!
Thompson Reuters (NYSE:TRI) is another media monster to keep an eye on as the industry continues to evolve, but for an entirely different reason.
Reuters is a well-established news source, respected around the world. With operations in over 100 countries, many other news channels rely on Reuters’ sources and stories to gain unique insights into the world’s most critical developments.
While Reuters is best known for its groundbreaking journalism, it also offers a plethora of data analysis and financial tools that have become absolutely vital in hedge funds, trading desks, news channels and more.
And then there’s Disney (NYSE:DIS). Disney is a household name. The production giant responsible for some of the most beloved and highly viewed films ever.
But its box-office success could soon be a drop in the hat compared to its big-picture plans.
Thanks to its incredible maneuvering within the film space, including the widely publicized acquisitions of 20th Century Fox and Marvel Studios, Disney is absolutely crushing its competition.
But what many people don’t know is that this maneuvering and its wider strategy is built entirely through its data streams.
From “MagicBands” in the company’s theme parks that track customers’ every move to neural monitoring of test audiences during film previews, Disney can fine-tune a customer’s experience on a granular scale. And as it enters the streaming world, one can be sure that it will not lose its innovative edge as it goes head to head with Netflix and HBO.
2. Real-World Applications
The data boom isn’t limited to news media, however. It also has real world applications which are poised to transform entire cities and create a way of life that most people are still struggling to understand.
Using your browsing history, information from your cellphones and the complete technological saturation of many of the world’s biggest cities, internet giants like Google and Microsoft are using complex algorithms to build a new world right before our eyes.
Humans have essentially become walking, talking data machines, churning out information that is absolutely vital to building everything from better cities to providing a new understanding of the ‘human condition.’
Google (NASDAQ:GOOGL) is leading the charge on this front.
The internet giant knows everything you’ve ever searched for and everywhere you’ve been, both in the real world and online. It has so much data, actually, that if you were to download it all, it would add up to millions of Word documents.
While it may seem scary, or downright invasive, what they’re actually doing is much less sinister than many of the major regulatory bodies make it out to be.
Google’s smart-city startup, SideWalk Labs, for instance, has recently released a piece outlining new plants to transform Toronto’s Lake Ontario shoreline into “the most innovative district in the entire world.”
The neighborhood will include smart traffic lights, optimize energy usage, self-driving delivery vehicles, and much more, leveraging the data collected from residents to improve each of these features, and in turn, create a sort of tech utopia.
Not to be outdone, Microsoft (NASDAQ:MSFT) is looking towards similar goals.
Between the Internet of Things, cloud storage, and artificial intelligence, Microsoft is not holding back in its mission to create smarter, safer, and more efficient cities. With the help of its vast resources and analytical capacity, Microsoft is looking to dramatically reshape what we thought we knew about the cities of the future.
Not only does it hope to utilize data to revolutionize the inner workings of city infrastructure, it’s also looking to secure its role in the urban planning of the future. With its data edge, Microsoft will be able to follow traffic to create more efficient streets, quieter neighborhoods, and less stress for residents.
3. The New Mad Men of Advertising
And finally, there’s advertising. The data that no one really likes to talk about.
Gone are the days of traditional advertising where suited men in New York City high-rises ruled the day…
We’ve entered a new world of data-driven adverts, reaching billions of people with just a click of a button.
Though Facebook (NASDAQ:FB) is not yet on Google’s level, it’s still reinventing the advertisement world as we know it.
Instead of actually creating its own content, the company relies on its users to churn out videos, blurbs, and stories for it. But in doing so, the tech giant collects a shocking amount of data which it uses to fine-tune its potential to target those same users with curated advertisements. And in turn, it has become one of the most profitable and valuable companies on the planet. In fact, as of early 2019, Facebook has an average of over 52,000 unique data points on each of its nearly 3 billion users.
Though Facebook has come under fire from less-than tech-savvy regulators, the company has shown no signs of slowing, with its share price growing by 22 percent this year alone.
While Facebook and Google currently dominate the scene, publishers are constantly looking for new ways to take on the media giants. From ad cooperatives to simply taking the plunge and hoping for the best, publishers are becoming desperate to compete.
This is where newcomers like Frankly Media (TSXV:TLK, OTCQX:FRNKF) have an opportunity to really shine. With an artillery of data and an ever-expanding user base at their disposal, in addition to a tech-savvy business-minded team, the company is one of very few that may actually be able to put up a fight.
Other companies looking to capitalize on the new data gold rush:
Mogo Finance Technology Inc. (TSX:MOGO): This is a new spin on unsecured credit, which is a burgeoning sub-segment of FinTech. Providing loan management, the ability to track spending, stress-free mortgages, and even credit score tracking, Mogo is at the forefront of an online movement to assist users with their financial needs.
Mogo’s software analyzes borrowers instantly and greatly reduces the traditionally cumbersome underwriting process for loans. It’s online only, so there’s very low overhead and a ton of cash to spend on marketing. Labeled as “the Uber of finance” by CNBC, Mogo is definitely turning heads.
EXFO Inc (TSX:EXF): EXFO isn’t new to the Canadian tech sector. The company was founded in 1985 in Quebec City, and its original products were portable testing products for optical networks. Since then, the company has acquired and build 3G, LTE, protocol, copper/xDSL, IMS, and VoIP test and service assurance products.
Recent developments from EXFO are promising for long term growth potential. The new baseband unit emulation technology which is sure to be adopted on a large scale, as the tech offers operators a reduction of costs and a faster revenue stream.
Pure Technologies LTD: Pure technologies (Acquired by Xylem Inc. NYSE: XYL) is all about critical infrastructure including water and wastewater pipelines, oil and gas pipelines, and bridges and structures. One of Pure Tech’s biggest achievements in this space is its SoundPrint acoustic monitoring technology, which is set to revolutionize the industry.
Investors are watching Pure Technologies closely and the company is sure to be a valuable addition to numerous portfolios going forward as the data revolution kicks into high gear.
Power Financial Corp (TSX:PWF): Montreal-based Power Financial Corp has been in the finance industry since 1984. The company operates in three segments: Lifeco, IGM and Pargesa Holding SA (Pargesa). And, with its holdings in a diversified portfolio spanning the United States and Europe, Power Financial is a leader in its field.
Focusing its investments in the emerging FinTech and data industry, Power Financial stands to benefit by riding this wave into the future. The company’s forward-thinking attitude and liberal approach to technology is sure to leave investors satisfied.
Avigilon: Avigilon develops, manufactures, markets and sells HD and megapixel network-based video surveillance systems, video analytics and access to control equipment. We expect strong continuous growth in the video analytics business and a company such as Avigilon is well positioned to capture market share in the Canadian markets.
As a key player in the digital data marketplace, it is clear to see why Avigilon made the list. With its technology continuing to move forward, investors can count in Avigilon to provide lasting value.
By. Darren Elkins
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