Four labels get used as if they're mutually exclusive, and they're not. Agency, DTC, SaaS, and B2B describe different things about a company: what it sells, how it delivers, who buys, and where the transaction happens. A single company is often two of these at once. Most people are confused. Here are four signals you can use to identify business models.
Any company fits into one of the five core business model types once you answer four questions in order:
Every classification below flows from these four signals.
[table]
Model | Who pays | What is sold | How delivered | Where sold | Examples
Agency | Business | Service | Project or retainer | Sales team or referral | WPP, Ogilvy, Wieden+Kennedy
DTC | Consumer | Physical product | One-off transaction | Own site | Warby Parker, Allbirds, Casper
SaaS | Business or consumer | Software | Subscription | Own site or sales team | Salesforce, HubSpot, Slack
B2B | Business | Software, service, or product | Any | Sales team | Salesforce, Oracle, SAP
Marketplace | Both sides | A transaction fee | Per transaction | Own platform | Amazon Marketplace, Airbnb, Upwork
[/table]
The takeaway formulas:
The reason B2B overlaps everything else is that it describes who buys, while agency, SaaS, and marketplace describe what is sold and how. Most companies are B2B AND one of the others.
An agency is a business that delivers a service on a project or retainer basis, with revenue directly tied to headcount and time. Agencies sell expertise and execution. The product is people doing work, priced by the hour, the deliverable, or the month.
Agencies and consultancies get treated as the same thing, but they aren't.
A consultancy sells advice, frameworks, and strategic recommendations, usually delivered by senior partners over a short engagement. An agency executes the work: builds the ads, ships the campaigns, produces the assets.
McKinsey delivers a strategy deck. WPP produces and runs the campaigns. The distinction matters because their pricing, delivery model, and headcount economics work differently.
Some agencies productize their work into software over time. When they do, they usually move from pure agency into a hybrid model with agency and SaaS revenue side by side.
For a broader view of the paid media agency landscape and how different models charge, our list of the best SaaS marketing agencies covers the players and their pricing structures.
DTC (direct-to-consumer) means a company sells physical products to end consumers through its own website or storefront, cutting out retailers and wholesalers. D2C is the same thing with a different abbreviation. Both stand for direct-to-consumer.
The defining feature is the channel, not the buyer. A DTC brand owns the customer relationship end to end: acquisition, transaction, fulfillment, and repeat purchase. Warby Parker sells eyewear directly to consumers online. Allbirds sells shoes through its own site. Casper sells mattresses directly, without going through retail furniture stores.
DTC vs B2C: DTC is a subset of B2C defined by the channel, not the buyer. All DTC companies are B2C, but not all B2C companies are DTC. A brand selling through Target is B2C. A brand selling through its own site is DTC.
SaaS (software as a service) means software delivered over the internet on a recurring subscription. The gross margin profile is what makes SaaS distinctive: once the software is built, marginal cost to serve an additional customer is near zero, which is why SaaS companies command higher valuations than agencies or product companies.
"We have an app" doesn't make a company SaaS. An e-commerce brand with a shopping app is still selling physical products. A media company with a subscription app is a media business. SaaS specifically means the product itself is software, and customers pay to keep using it.
The SaaS business model breaks into pricing tiers, contract lengths, and buyer types. Enterprise SaaS is sold through sales teams on annual contracts. Self-serve SaaS is sold through the website on monthly subscriptions. Both are SaaS, but the go-to-market motion is completely different.
B2B SaaS sells software to businesses. B2C SaaS sells software to consumers. The delivery model is the same in both cases; the buyer, sales motion, and unit economics are different.
B2B SaaS typically has higher ACV (average contract value), longer sales cycles, and multi-stakeholder buying committees. Salesforce, HubSpot, and Slack are B2B SaaS. B2C SaaS runs on lower ACV, faster purchase decisions, and single-buyer transactions. Netflix and Spotify are B2C SaaS.
SaaS is a delivery model. B2B is a buyer type. That's why the question "is SaaS B2B or B2C" has no single answer. Any given SaaS company is one or the other based on who buys.
B2B means the customer is another business. B2B describes who buys, not what is sold. That's why B2B stacks on top of agency, SaaS, and marketplace classifications rather than replacing them.
A B2B agency sells services to businesses (WPP works with brands, not consumers). A B2B SaaS company sells software to businesses (Salesforce sells to enterprises). A B2B marketplace connects business buyers and sellers (Alibaba connects wholesale buyers to manufacturers). Same label, different business models underneath.
This overlap is the reason the classification question gets asked in the first place. Most companies are B2B plus one other model, and knowing which combination they are shapes everything from marketing to pricing to sales structure.
B2B vs B2C is a buyer-side question. It asks who's on the other side of the transaction: a business or a consumer.
B2B buyers have committees. The average B2B purchase involves five to seven decision-makers. Sales cycles run 45 to 120 days for mid-market SaaS, longer for enterprise. ACVs range from a few thousand dollars annually to hundreds of thousands. B2C buyers make decisions alone, in minutes to weeks, at lower price points.
B2B vs B2C marketing works differently as a result. B2B marketing targets specific job titles at specific companies, uses long-form content to build trust across a committee, and reports on pipeline generated over months. B2C marketing targets broader audiences, moves faster, and reports on same-session conversion. The difference isn't the platforms used. It's the buyer decision architecture underneath.
That's a marketing and sales question, not a business-model classification question. B2B and B2C both exist across every model in the table above.
Most companies fit cleanly into one model. Some don't. A SaaS company with a services arm. An agency that productized its methodology into software. A marketplace that added a subscription tier. These are hybrid models, and they need a rule.
The rule: classify by where the majority of revenue comes from, and note the secondary model.
When in doubt, ask which revenue line the CFO reports on first in the earnings call. That's the primary model.
Classification isn't academic. It's the first input into paid targeting. LinkedIn's firmographic filters and Google's audience layers both require you to state what kind of company you are and what kind of company you sell to. Wrong classification leads to the wrong ICP targets, and it is the single most common reason B2B ad spend produces demos from people who cannot buy.
A company that calls itself "B2B SaaS" but sells a $99 self-serve product has a different targeting problem than one with a $30,000 ACV and a five-person buying committee.
Both are B2B SaaS by classification, but the audiences, ad copy, and channel mix that work for each are almost nothing alike. The founder who never puts their company in the right column of the table ends up buying leads from the wrong ICP for months before spotting it.
Getting the classification right is the first step. Building keyword lists and audience segments that match your actual model is the second.
For a practical walkthrough on the second step, our guide on B2B PPC keyword lists covers how to translate a classification into a paid targeting strategy.
For more definitions and frameworks, see the full glossary.
ScalixAI is a performance-driven Google Ads agency specializing in helping high-growth, AI-first companies scale with predictable, profitable customer acquisition. Founded by an ex-Googler with 9 years of insider advertising experience, we manage the entire Google Ads lifecycle—from campaign strategy and account setup to conversion tracking, analytics, and ongoing optimization. Our data-centric, AI-powered approach ensures you know exactly which campaigns are working, why they’re working, and what to do next to outpace your competitors.ScalixAI is a performance-driven Google Ads agency specializing in helping high-growth, AI-first companies scale with predictable, profitable customer acquisition. Founded by an ex-Googler with 9 years of insider advertising experience, we manage the entire Google Ads lifecycle—from campaign strategy and account setup to conversion tracking, analytics, and ongoing optimization.
Most clients see performance stabilize by month three. Google Ads isn’t a slot machine—it takes time to compound.
No. We work month-to-month. All we ask is that you give us three months to prove the results.
While Google Ads is our entry point, we also support LinkedIn Ads, Reddit, and X campaigns when needed.
The CRO audit covers your landing pages, CTAs, forms, and overall user flow. We’ll flag what’s holding back conversions and recommend fixes. If changes require design or dev resources, we’ll hand over clear action steps for your team, so you know exactly what to adjust.
As an ex-Googler, I know which recommendations are useful, and which are just there to hit Google’s internal targets. We’ll filter their advice for you, implementing only what actually helps us hit revenue goals.
Weekly reports show spend, conversions, CPL/CPA, and how we’re tracking against projections. “Good” means campaigns are meeting efficiency targets. “Scalable” means we can push budget and expect the same or better efficiency without breaking ROI.