Sarah Hindlian, Macquarie's New York-based senior software analyst, says large software companies have access to third party data as well as proprietary first party data provided directly by the customer.
They also have the computing power to track, measure and analyse what marketers know about their own consumer in siloed systems.
"Software companies are emerging as powerful participants in the advertising industry with the move to personalised advertising now inseparable from the software that enables it," she says.1
Macquarie's advertising, media and software analysts track new and old companies seeking competitive advantage in a highly dynamic environment.
Hindlian notes the changing economics of advertising in the current environment.
“Global advertising expenditures are growing at over five per cent a year by our estimates, but marketers want this spending to be effective in reaching consumers at a much more personalised level, " she says.
Market intelligence company IDC notes spending on advertising software accounted for five per cent of total media purchases in 2017. This is forecast to grow to 8 per cent by 2022,2 and continue to accelerate.
Measuring impact in terms of page views, click-throughs and actual response is becoming its own sub-industry.