Horizon Media bets on future of hybrid events with stake in digital experience platform

Horizon Media, the largest independent U.S. media agency, has acquired a majority interest in First Tube, a Brooklyn, New York-based branded live experience marketing platform.

The agency announced the deal this morning, after a six-month-long internal discussion, according to Donnie Williams, Horizon's executive VP and chief digital officer. Horizon Media has had a close relationship with First Tube, founded in 2017, for five years, Williams told Ad Age in an interview.

Terms of the deal were not disclosed.

“They went into a process in the past nine to 12 months, looking for capital to invest around the infrastructures for their own business,” Williams said. From then, Horizon Media started considering a commercial relationship with First Tube, beyond the existing business collaborations. As the discussion went on, Horizon Media realized First Tube would offer the agency a vehicle that reinforces a “creative and innovative marketing strategy” amid the unpredictable post-COVID market and the tightening privacy regulations.

Immersive content experience

“We’ve considered First Tube to be a hybrid experiential service provider with access to live events and on-demand events distributed across digital channels," he said. "But we also have access to immersive content experience, as in the metaverse. It gives you a lot of flexibility to reach the consumers.” Acquiring a majority interest in First Tube, Williams said, “will allow us to be flexible enough to [stay in front of] shifting consumer behaviors.”

In December of last year, Horizon, a long-time independent, agreed to sell a minority stake in its company to two investors, Singapore-based investment firm Temasek and New York-based investment and merchant bank LionTree. At the time, Founder and CEO Bill Koenigsberg said the proceeds offered an opportunity to “supersize” the verticals it operates. “You're going to see us get more aggressive in content, data opportunities, and other verticals that maybe we're currently not as strong in that we want to shore up,” Koenigsberg said at the time.

Last month, Horizon Media launched Chapter & Verse, a Web3-focused division that allowed the agency to leap into the metaverse. The acquisition of First Tube shows the agency’s continued dedication to the metaverse and adjacent technologies.

“Blockchain and NFT technology is great for digital representation, but it’s also a really great mechanism for unlocking experiences,” Williams said. Taking music as an example, Williams said that metaverse-adjacent technologies allow consumers to “be able to see their favorite artist perform in a realistic setting, because they’re loyal customers, is something really powerful. And it’s already been leveraged as a marketing strategy.”

Horizon Media said it is investing despite the current uncertainty in business and markets. “Some companies have chosen to reactively cut back in this time, but Horizon is focused on the long game,” Koenigsberg said in a statement. "We are making strategic investments in technology and creativity platforms that meet and exceed our clients’ desire to better connect their brands with consumers in more meaningful ways now and in the future.”

“We’re a 30-plus-year-old company," said Williams. "We’ve seen challenges around economic headwind historically. More recently, we’ve seen challenges no one else has seen before [during the pandemic] ... We’re a long-term player. We’re always looking to realize opportunities to strengthen our business. We’re not going away. We have a tendency to double down on areas where we feel the value far outweighs the risk.”

Horizon described First Tube as a pioneer company in the “‘experiential transformation" space, combining performance media with experiential. First Tube’s past clients include Google, YouTube, Chase, Taco Bell, Grubhub, New Balance, American Airlines and Creative Artists Agency.

Merging in the middle

Following the acquisition, the business functions of both companies will co-develop, while the personnel across both companies will remain largely independent. “Merging in the middle is a good way to think about it. I’ll be First Tube’s executive sponsor and a board director,” Williams said. 

Williams added that First Tube will join Horizon Media in the agency’s Tribeca office to work in close proximity as a team. “Beyond that,” he said, “we’ll start integrating First Tube’s capabilities within the infrastructure of our organizations,” referring to the companies’ different production capabilities, which will benefit both companies’ clients. “But there’s no Horizon employee going over there, and no First Tube employee coming to us.”

“We’ll be operating as truly independent organizations. I’ll be the bridge. We’ll be on-site together, and we’ll make sure that all of their best capabilities will be incorporated into our existing offerings in Horizon, and we’ll go from there,” said Williams.