Horizon Media aims for more than half its ad deals to be guaranteed on business outcomes in next five years
Introduces new performance-based agency
Horizon Media is aiming for more than half of its ad deals to be guaranteed on actual business outcomes, rather than the standard age and gender demographics, within the next three to five years.
To this end, Horizon is introducing a new agency, Big, that will operate under a 100 percent performance-based model, says Horizon CEO Bill Koenigsberg. This means Horizon will only get paid if it's media deals effect business outcomes, like driving website traffic or test drives of a car.
"We want to change the currency of the entire marketplace to business outcomes," Koenigsberg says.
Big, which will be led by Gene Turner, exec VP chief of Horizon Next, is specifically designed for start-ups, e-commerce and emerging brands that are looking to structure deals based on key performance indicators. The agency will debut with a new brand from the makers of Fridababy dedicated to millennial moms coming later this year.
More broadly, Horizon is looking for 70 to 80 percent of all of its media deals to be guaranteed on business outcomes in the next three to five years, Koenigsberg says. The agency is currently searching for a chief business outcomes officer (a new role) who will structure these types of deals.
"The days of delivering impressions are over," Koenigsberg says. Instead, he says Horizon will be looking for media partners that produce positive business outcomes for its clients and reward them with bonuses if they outperform on delivering business results.
Attribution has certainly become a talking point for many major TV network groups over the past year as the industry works to better compete with the likes of the Googles and Facebooks of the world, which have long promised last-click attribution.
NBC Universal is the latest TV network group to introduce an attribution product in conjunction with analytics company Data Plus Math. Earlier this month, NBCU said it struck a deal with STXFilms guaranteeing that commercials that aired on its networks drove purchases of movie tickets for the flick "The Upside." Horizon negotiated that deal on behalf of STX.
Last year, Turner struck a deal with Chipotle to guarantee sales of its tacos and burritos. And A&E Networks, AMC Networks and Discovery have also been testing attribution models.
As it relates to this year's upfront negotiations—when networks look to secure a bulk of their ad commitments for the following season—Koenigsberg says we will see some deals guaranteed on business outcomes, but the amount of business done in this way will still be minimal.