Revenue Sprint Rate
Higgsfield AI, a generative creative startup focused mainly on advertising, says its annualized revenue run rate has passed $1 billion and that revenue from business customers is up tenfold since June, Bloomberg reports.
That run rate comes with a big caveat, however. Higgsfield calculates it by multiplying its revenue from the past four weeks by 13. It’s not a rock-solid metric. But Higgsfield isn’t alone. Other AI startups chasing multibillion-dollar valuations have done the same.
Anthropic has based its annual run rate on a similar one-month lookback, and OpenAI has disclosed revenue growth quarter over quarter rather than year over year.
Public companies report revenue year over year for good reason: It’s more accurate. Seasonal swings make short windows misleading. For example, it matters more how this Halloween compares with last Halloween than how October compares with September. Or, say you annualize revenue from November and December, when holiday ad spending peaks. The result would be wildly inflated.
Then again, VCs might buy it.
For his part, Higgsfield CEO Alex Mashrabov says he’s seen a “snowball effect” in generative ad production. “As soon as businesses see positive return on investment from AI-generated ads,” he says, “they keep generating more and more.”
Partner? I Hardly Know ’Er!
Marketer demand for creator partnerships is outpacing the infrastructure needed to develop those collaborations. But YouTube sees this as an opportunity, rather than a setback.
Plenty of independent companies already offer tools to support the creator marketing space and to connect brands with creators. But within the walled gardens, the options are thin.
YouTube’s goal, according to Amjad Hanif, VP of product management for YouTube creator products, is to invest in tools that make it easier for brands and creators to strike deals, he tells Mike Shields, rather than the current system of striking deals “sort of sporadically,” often as a “one-off communication via email and DMs.”
Creators would benefit, but so would YouTube, Shields points out. The more creator deals brands strike, “the more they pay to boost them with ads,” he writes.
Of course, YouTube’s tools would almost certainly live solely within the confines of YouTube – they’re called walled gardens for a reason – so it will be interesting to see whether other channels follow the trend. TikTok, for one, launched its TikTok Creator Marketplace API back in 2021.
As YouTube’s chief business officer, Mary Ellen Coe, put it during Wednesday’s Made On YouTube event, “connecting with brand partners is one of the most transformative ways to build your business.”
Too Thirsty For Data
AI agents keep overstepping safeguards meant to prevent unauthorized data access. Which isn’t great news for agentic advertising.
The Australian government is investigating OpenAI after one of the agents the company used for an internal research project hacked into Australia’s national health services agency, Wired reports.
This isn’t the first time an OpenAI agent unexpectedly attempted to breach a government or university database. The New York Times details four other such incidents that happened just this year.
Apparently, when OpenAI’s agents can’t access a data source, they don’t give up. They find what Wired calls “a work around.”
In advertising, the unauthorized use of consumer data is a liability nightmare. That’s why advertisers, publishers and ad tech vendors govern data access with strict contracts. And yet the industry is building toward a future in which AI agents run campaigns and manage customer databases.
Although people love talking about keeping a “human in the loop” and never letting AI agents have the final say, they’re already making decisions based on data that, in some cases, no human has reviewed for years – including to check for compliance with shifting privacy laws and contracts.
What could go wrong?
But Wait! There’s More!
Palantir is known for its government-related work, but lately it’s also started striking deals with media and marketing companies. [Adweek]
An IAB Europe survey of 50 advertisers finds that most expect agentic advertising (as in, agent-to-agent trading) to become operational and reach scale within a year. [Digiday]
Google Ads introduced two new modes to its Recommended Investment Strategy setting. Holistic mode shifts budget from underperforming campaigns to stronger ones, while Growth mode only adds budget, topping up campaigns limited by their budgets without cutting spend elsewhere. [PPC News Feed]
You’re Hired!
IAB Europe appoints Sonia Carreno as its next CEO, succeeding Townsend Feehan. The transition will take place next quarter. [ExchangeWire]
Assertive Yield, a revenue management platform for publishers, brings on Shez Iqbal as senior director for global app monetization and Jack Watt as lead sales engineer for EMEA. [release]
Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
