Don’t Give Me Your SaaS
The software as a service (SaaS) business model has become synonymous with integration and interoperability. One SaaS business usually connects to other SaaS businesses.
But not so much anymore, writes Keynes Digital Founder and CEO Dan Larkman at AdMonsters.
Wall Street investors and venture capitalists jumped on the SaaS startup bandwagon in a big way. Investors like subscription revenue because it’s seen as more durable and reliable.
The Trade Desk, which is not a SaaS company, is at the whims of fickle marketers and agencies. That’s why, when the market sours or things go south for a brand, it’s ad tech and marketing that gets hosed. Unlike a SaaS model, advertisers can easily dial those budgets back.
However, Larkman notes, SaaS vendors may have seeded their own destruction. The model worked when the focus was on easy interoperability and the ecosystem. That meant companies had to really earn their SaaS checks.
The new focus in SaaS land seems to be around creating switching costs that make it harder to drop a vendor, often by revoking some former interoperability or open data API.
Weak Spot
Spotify’s stock price dipped 10% on Tuesday after the company missed its earnings expectations for Q2 and dialed back revenue projections for 2025, CNBC reports.
Spotify CEO Daniel Ek blamed the shortfall on the company’s late-blooming (or not-so-blooming) advertising business.
While streaming media and social platform ads are booming, Spotify’s ad revenue saw only 5% yearly growth (from a relatively smaller base). Advertising lagged far behind Spotify’s overall revenue growth rate of 15%.
“The one area that hasn’t yet met our expectations is our ads business,” Ek said. “We’ve simply been moving too slowly, and it’s taken longer than expected to see the improvements we initiated take hold.”
Although Spotify has grown its monthly advertiser base by 40% YOY, it still has plenty of headroom in terms of programmatic and direct demand, says Co-President and Chief Business Officer Alex Norström.
“With the heavy lifting on our ad tech largely complete, we’re now focused on driving adoption,” Norström says. The plan for driving demand includes more campaign automation and a continued emphasis on video.
Spotify’s ad biz is also looking for new leadership. Global head of ad sales Lee Brown is taking on the CRO role at DoorDash, which was announced on Monday.
Brown has “done great things for Spotify,” Norström told an investor. “But right now, we need to accelerate the transformation of this business.”
We Like Sportz
Sports programming is the driving force behind this year’s upfront cycle.
On Tuesday, Disney announced that sports ad volume across its linear and addressable businesses will near $4 billion for the 2025-2026 season.
Similarly, The Wrap recently reported that Fox earned $2 billion in sports-specific upfront revenue, excluding the World Cup; and although NBCU didn’t disclose specifics, it reportedly saw a 45% year-over-year increase in sports ad volume.
Perhaps this might be why sports streamer Fubo, which hasn’t been doing so hot lately, decided to post its preliminary second quarter results in advance of its actual earnings date on August 8.
The results, better than expected, come as Fubo’s merger with Disney’s Hulu + Live TV is pending. According to Deadline, the deal is likely to close sooner than anticipated. Even by Q4 this year.
Total revenue for Q2 exceeded prior guidance in both North America ($365 million) and the rest of the world ($8 million), and the company is apparently on track to achieve its first quarter of positive adjusted EBITDA.
Guess it’s a good time to be in the sports business, huh? (Unless you are an underpaid athlete, of course.)
But Wait! There’s More!
Yelp is creating its own AI-powered restaurant ads. [The Verge]
YouTube is rolling out age “estimation” tech to guess whether or not a user is a teenager. [TechCrunch]
Composable CDP Hightouch raised an investment from Snowflake Ventures and Capital One Ventures. The amount was not disclosed publicly, but AdExchanger learned that it was $12 million. [release]
Travel industry news and data company Skift acquires Women Leading Travel & Hospitality. [A Media Operator]
WPP Media and Criteo are partnering to bring more commerce media data to CTV. [release]
Bet you haven’t heard this one before – TikTok might be banned in the US if China refuses to sell the app by September. [eMarketer]
Overwolf, a company that offers in-game rewards programs and monetization for video game content creators, doubled its ad revenue to $100 million in 2024. [Variety]
Senator Ron Wyden asked the Trump administration to investigate the UK’s data surveillance laws and requests by UK regulators for Apple and Google to provide backdoor access to Americans’ data. [WaPo]
You’re Hired!
OpenX promoted Stacy Bohrer to senior VP of buyer development and Amanda Forrester to senior VP of marketing and communications. [release]
Zeta Global named Meta and Microsoft alum Nate Yohannes President of Zeta Data and its AI Lab, and will head up research and development globally. [release]
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