ADAM HEIMLICH: At Horizon we're focused entirely on media buying, working with feedback and optimization to give clients a close view of the market and how we spend the money and do the buy. Our programmatic solution is within that view of the market.
DONNIE WILLIAMS: "Business is personal" is a philosophy that has made Horizon effective over time, servicing clients in a way that they know you will go the extra mile. That was a real big point for us. It resonates with the teams here.
We have lost a little agility because we were managing clients on an individual basis. A&E and CapitalOne have different needs. Because we manage 100 clients, we need to think through what technology is able to leverage against specific client needs and wants. We were missing opportunities to deliver solutions to brands across the programmatic marketplace. The effective use of data, integration of proprietary tools and technologies, those are not as distinct. There's an opportunity for us to partner on a centralized capability across brand challenges
How many clients are you live with?
ADAM: Roughly 75% of our  clients leverage programmatic solutions today through Horizon Media. We are in the process of migrating those clients to HX as a way to further deliver value. That's on approval, absolutely not mandatory. At present about half of those clients are in transition. We feel we're going to close that gap over time as folks start to see the positive results of working alongside HX.
What about data management? Do you have a preferred solution for data management, and how do you accommodate clients' preferred DMPs?
DONNIE: it's a necessity to have flexibility in that space. The solution is transparent for our clients. We're not looking to hold anyone hostage as a result of shared information. If a client wants the ability to own their own information, own their own technology partners, of course we're establishing partnerships that allow for that.
Are you taking a position in media, as Omnicom's Accuen and WPP's Xaxis have said they do?
DONNIE: We are not. The only thing is, if a client says, we only want to pay when you convert someone and there's no dialog around overhead, then we would look at a forecasting model where you would take a position. These are wholly transparent costs however. If these one-off instances crop up, we'll determine if that's feasible.
Of Horizon's more than $4.5 billion in billings, how much is TV? How much is digital?
DONNIE: TV is sizable, somewhere between 50% and 60%. We do national buying for Geico, Capital One, and Burger King.
Digital is closing in on 15% of our total billings. It probably sounds small but it's also the nature of how our organization grew. Year over year growth in digital is 20% to 30%, which is crazy. Our direct practice is also growing like a weed. That's more of a traditional direct practice from a billing standpoint, with a lot of remnant television buying in the linear space. Direct is the wrong classification. It's more of a brand engagement offering for large-scale clients, servicing Dish and Vonage and a handful of others.
What's your history with programmatic?
DONNIE: I will say we kicked off our programmatic strategy a handful of years ago. We were the first agency to license Adap's technology. In trying to read the tea leaves -- and perhaps overshooting a little bit -- we thought there was there was going to be extreme pressure on certain pockets of inventory and that accessing longer tail inventory with a little bit of data was going to help us mitigate the cost pressure and stay not only competitive but hopefully more effective relative to others in the industry with regard to sourcing video.
How much of your programmatic buying to date has been driven by television budgets and demand for comparable digital video?
DONNIE: It's not a one-to-one. Generally speaking, I don't think people look at programmatic video – digital video -- as an alternative to premium environments today, but that dialog is also rapidly evolving. We're not a barometer for the entire market, but it hasn't been the boon that we anticipated early on. But it has been a consistent part of the way we go to market.
ADAM: It's not just that they're TV advertisers but advertisers who are focused on premium inventory, who wouldn't consider open exchange. There's an opportunity in taking a programmatic approach even if you're exclusively negotiating long-term commitments with trusted publisher partners. There's still an advantage in adopting some of the ad tech that was developed originally for the open exchange. That same technology will get you closer to the market, a better ability to predict future trends, and give you an advantage in media buying.
Lately there's been some talk that open exchange buying was phase one of the programmatic trend, and now we're entering phase two, which is direct negotiation and private exchange deals.
ADAM: Yes and HX is not exclusive to either one.
Along those lines, what do you think about the idea of putting the open auction in the past, which has been a hot topic. Is that a credible effort to make for any media agency?
DONNIE: It sounds like an effort for sure. For us it wouldn't be a discussion. It takes away from some of the opportunity and value that a marketer could ascertain. We are moving further toward audience buying, and in doing so we're taking away some of the layers of dialog around premium content. I don't know why you would want to take an open world of supply and reduce that supply, which is implicit in moving to private environments. And from our point of view, there's a real cost concern. A lot of benefit can be created if you have both [open and private].
Also, there's an assumption that if you transact only across premium publishers, somehow you've navigated beyond fraudulent practices. And of course we've done enough work, lots of people have, to suggest that's not always the case. So you're now paying a premium for the media, while leveraging additional software to make sure you get what you've paid for, which sounds like you're distancing yourselves from what you've set out to accomplish.
You said Horizon "overshot" in its early programmatic work. What did you mean?
DONNIE: The thing people fall in love with, or at least we fell in love with when we started working across these technologies, is they give you a lot of control across inventory and a lot of insight. We were contending with the same challenges that certain pockets of the marketplace have today. There's still network buying and perhaps limited visibility. You don't necessarily understand where impressions are. Adap filled a void we thought was a critical one. And it happened to be a discussion around video. We have a bunch of marketers that play in the upfront. The market was moving in this direction of more clients buying video and relatively limited supply across the key players. We saw an opportunity to expand with good tools to identify value.
But, we realized it took a tremendous amount of discussion with clients to get them comfortable with purchasing properties they had never heard of before. This is not a new story, and not surprising. But the Adap publisher marketplace is not composed of all tier-one properties and so it took a long time to talk through the potential value of these thousands of sites. And it took a long time to make people comfortable that their media would flow across these properties in a way that made sense.
It felt like we were another network, talking about the value all these tools brought to properties that in and of themselves were not valuable. It was a tough hole to climb out of. That's not to say we didn't move a lot of money through that particular opportunity. I thought the promise was to really push sizeable amounts of money through local and national cable and broadcast using a programmatic toolset. Instead there was this wall around education. We may have overestimated the momentum for change.
And I think there's still some question about if you're going to see sizable allocation shifts in video. The conversation is maturing, but it didn't happen as quickly as we thought it would.
What about the big programmatic commitments reportedly made by global advertisers like Procter & Gamble and American Express? Does this put pressure on agencies?
DONNIE: I think any marketer who's being objective would say, from an agency standpoint there's a lot of effort – improving available data, or improving workflow. But these are available tools for anyone to utilize, not just agencies. One question that comes through is, have certain organizations overvalued their contiribution to brands? And is this a way for brands to take control back? And I think yeah, it probably is.
Whether you're going to put 75% or 80% of your digital dollars into programmatic, that probably isn't the big thing. The thing is, we are committed to this strategy.
Do you see agency workflow automation as a subset of the programmatic trend?
ADAM: We do not. If workflow automation is conflated with buying programmatically, that's not in advertisers' interest. This ability to buy media at auction is a very big change in the marketplace.
DONNIE: We focused the dialog around digital and programmatically, but there's another conversation in the traditional programmatic space, where you're talking about aspects of television planning and buying automation. We're in a unique an hopefully positive position to draw distinctions between what's possible and what's practical.