To Cut Costs, Sprint Picks Indie Agency Horizon to Handle Its $700 Million Media Business

Budgetary concerns drove decision

The telecom giant's marketing spend has decreased greatly in recent years.
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Just over four months after launching its first media agency review in more than a decade, Sprint has chosen independent Horizon Media as its new media agency of record.

“Sprint is excited to partner with Horizon Media as its media agency of record,” said a representative in a statement. “Horizon Media’s innovative ideas and dynamic approach using traditional and emerging channels is a perfect fit for Sprint as we continue on our transformation. The agency’s unique and fresh perspective will support Sprint in an extremely competitive and continually evolving industry.”

“We’re incredibly proud to be working with Sprint,” added Horizon CEO Bill Koenigsberg, who described the partnership with “best-in-class creative agency of record Droga5” as “a great marriage,” adding, “We believe that we will be able to enhance Sprint’s business outcomes in a very positive way.”

Incumbent Mediavest defended its business in the review. One party with direct knowledge of the matter named the other finalists as WPP’s Mindshare and IPG’s UM.

According to multiple sources involved in the review who spoke to Adweek on condition of anonymity, Sprint made very specific cost-cutting requirements of the agencies involved—and Horizon won the review, in large part, because it was the only shop that could meet those demands. One party noted that, as of this morning, Sprint has yet to officially alert all the losing agencies, with one or more learning of its decision via Tuesday’s report in The Wall Street Journal.

Representatives from UM and Mediavest declined to comment for this story. Mindshare could not be reached for comment.

Koenigsberg responded to the cost claims by stating “the only demands the others could not meet which we did were the strategic ones in how we can accelerate positive business outcomes for Sprint. We are proud of the thinking we showed Sprint during the review and look forward to a great partnership.”

Sprint also declined to elaborate on its budgetary goals, but there is little doubt the telecom giant has been working to reduce its operating expenses for some time. According to analysts, the company is currently several billion dollars in debt, and CEO Marcelo Claure directly addressed a potential merger with rival T-Mobile this year.

According to the latest numbers from Kantar Media, Sprint cut its U.S. paid media spend from $782 million in 2015 to just under $700 million in 2016. These totals are both significantly lower than budget estimates the last time its media account went into review, which were well over $1 billion.

Prior to naming Droga5 as its new creative agency of record last November, Sprint took a significant portion of the business away from previous partner Deutsch by moving all production work to its in-house unit, Yellow Fan Studios. Just over two months ago, the company ended its five-year relationship with DigitasLBi Chicago, assigning all direct and email marketing work to its internal teams in yet another attempt to slash its marketing budget.