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Adobe's $17B Subscription Strategy
PLUS: Did OpenAI make a mistake with Sora?
Rachael Kennedy
December 13, 2024 • Estimated Reading Time: 9 minutes
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Hi there!
Highlights from today's newsletter:
◾ Adobe hits $17B+ in recurring revenue - key lessons for subscription-based e-commerce
◾ Purpose-driven brands like Tony Chocolonely show how authentic missions drive growth
◾ Get exclusive access to Fospha's Black Friday performance analysis and 2024 benchmarks
EDITOR’S PICK
Adobe's impressive $17B+ in recurring revenue shows subscriptions aren't dead - but they're evolving. Their 2024 results offer crucial lessons for e-commerce brands considering or currently running subscription models.
While predictable revenue streams remain attractive, customers are increasingly subscription-weary. The key to success? Adobe's approach suggests it's about creating integrated ecosystems rather than standalone subscriptions. They've managed to grow Document Cloud revenue by 18% year-over-year by focusing on solving specific customer problems rather than just selling features.
What this means for your business: Consider how you can bundle products and services into a more comprehensive offering, and ensure your subscription truly solves customer pain points rather than just adding another monthly charge to their credit card.
Google's decision to stop prioritizing PMax over Shopping campaigns is already making waves. Shopping CPCs have doubled YoY, reflecting advertisers’ growing shift back to Shopping for better control and strategy. With Shopping spend set to increase further, CPCs could spike even more.
READ INSIGHTS FROM JOSH DUGGAN HERE 👉
WHAT WE ARE READING
 | AppLovin, a major player in mobile app monetization, recently faced a setback when it was excluded from the S&P 500 index despite its remarkable 900% stock surge this year. This decision caused a sharp 14.7% drop in its stock, marking its worst trading day in two years. Analysts believe that AppLovin’s volatility and the index committee’s preference for stability may have influenced the exclusion. While some see this as a buying opportunity due to AppLovin's strong growth in mobile game advertising, concerns linger around valuation and insider stock sales. |
 | Brand purpose dead or evolving? While some companies abandon it, others like Tony Chocolonely and Who Gives A Crap thrive by authentically integrating purpose with quality products. Consumers favor genuine missions over superficial alignments. The trend suggests purposeful brands will continue gaining momentum, challenging traditional market leaders. |
 | Historically, Goliaths succeeded online because they could implement enterprise-grade platforms to drive exceptional customer experience. As platforms like Shopify emerged, Davids have caught up: they can get up and running quickly. Smaller brands are able to transact well online. They’ve accessed and used thousands of developers’ efforts, meaning the pace of development has increased at a fraction of the cost. |
 | In winner-takes-all market, traditional brand playbooks are inadequate. Success requires brands to set new benchmarks and adopt bold, original strategies. Incremental improvements and adherence to best practices risk irrelevance. Brands must innovate beyond established norms to capture consumer attention, loyalty, and market share effectively. |
 | Curious about how other brands fared this Black Friday? Fospha’s latest report dives into key performance channels, standout strategies, and industry benchmarking data for this peak season. Perfect for digital marketers and eCommerce leaders, it’s packed with actionable insights to contextualize your 2024 results and sharpen your strategy for 2025. Sign up to get priority access 👉️ |
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WHAT WE ARE LISTENING TO
🎙 MARKETING AGAINST THE GRAIN
OpenAI Sora launch is criticized as a major misstep in 2024, highlighting issues with AI-generated memes, text-to-video technology, and data privacy. The rollout failure underscores the challenges in AI product development and the importance of addressing regulatory and privacy concerns in the tech industry.
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