LAS VEGAS — While artificial intelligence is supposed to simplify all kinds of processes, the relative newness of agencies’ AI embrace is still complicating enterprise partnership negotiations, particularly when it comes to structuring contracts around new AI dynamics, pricing models, and technical integration requirements.
“There’s certainly more time spent on contracts and on the principles and dynamics to make some of this stuff work. It’s been taking more time than maybe in the past because there are more AI dynamics at play,” Alex Stone, svp, managing director, Enterprise Partnerships at Horizon Media, told Beet.TV contributor David Kaplan at CES.
The added complexity requires evaluating whether partnerships operate on percentage of media, CPM, licensing fees, or hybrid approaches before finalizing agreements.
Managing complexity
Horizon pairs every joint business partnership agreement with joint technical partnership agreements that establish roadmaps for technical alliances and innovation timelines rather than just commercial terms.
“For every JBP joint business partnership agreement that we have, which is the creme de la creme of what we’re doing with our largest partners, we want to pair that with a JTPA joint technical plan,” Stone said.
Technical plans focus on innovation and actual technical components that solve client problems while integrating with Blu, Horizon’s agency platform for audience segmentation, planning, measurement, and creative capabilities within Horizon OS.
OEM home screens deliver unexpected performance
Original equipment manufacturer home screen advertising on platforms like Roku is generating surprising lower-funnel ROI, contradicting assumptions that these branded opportunities serve only upper-funnel objectives.
“We’ve seen things like the OEM home screen on the Rokus of the world really perform well from a lower funnel ROI perspective, which is surprising,” Stone said. “That’s probably one of the biggest surprises where a lot of misconception exists that these are higher funnel tactics, but we’re seeing more performance out of some of these larger branded opportunities.”
Agility over holding company constraints
Horizon structures enterprise partnerships to enable creativity and agility beyond strict commercial arrangements that define holding company relationships, emphasizing joint technical alliances and client solution orientation.
“We structure our agency and enterprise partnerships in a way that allows for more agility and frankly more creativity than maybe the constructs of a holding company in which there is such a strong reliance on strictly commercial,” Stone said.
Partners seek incremental growth while Horizon focuses on collaborative design that brings best-in-class capabilities into its platform ecosystem.
Simplification for adoption
Despite increased complexity, Horizon structures partnerships so clients easily understand benefits while agency employees can identify appropriate partners for specific tasks, balancing commercial agreements with technical innovation requirements.
“We try to simplify and structure them in a way that a client will easily grasp and understand the benefits, but also so our agency employees can kind of find the right partner for the task at hand,” Stone said.
Horizon maintains focus on media strategy fundamentals while ensuring proper dynamics create pricing efficiencies, though the contract negotiation process has become more involved.
“We are not removing ourselves from the strategy component of media that is at its core. We just want to make sure that we also have the proper dynamics in place to create more efficiencies from a pricing standpoint,” Stone said. “It’s important that we’re thinking of all of it before we sign anything.”
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