Social TV's Viggle to Air Its First TV Commercial

Company Also Hires First Agency of Record

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Advertising Age Player

Viggle will air its first TV commercial on Wednesday as the second-screen TV app, first introduced in January 2012, looks to move beyond word-of-mouth marketing.

The 30-second spot will run on cable TV in prime-time, late-night and afternoons starting at 4 p.m. today, Viggle CEO Greg Consiglio said, declining to describe the ad budget or identify the channels and TV shows where the commercial will appear. Viggle worked with creative agency Maude on the spot.

"We think the best way to introduce the app to people is while they are watching TV since this is the way we want people to use it," Mr. Consiglio said. Viggle will track download activity occurring during the periods when its TV spot runs and use the data to inform future marketing, he added.

The company, which is backed by media entrepreneur Robert F.X. Sillerman, has also hired Media Storm, the parent of Maude, as its first agency of record. It plans to continue to ramp up its marketing, focusing predominantly on TV, with some online components.

The Viggle app rewards users who check in to TV shows with points that can be redeemed for certain products or with brands such as Amazon, iTunes and Hulu. The majority of its marketing support until now has come in partnership with other brands like DirecTV and Verizon, but the app has still been downloaded 2 million times and had 590,000 active users in February, according to the company. Users spend an average of 56 minutes with the app per session, Viggle said.

"We spent the first year understanding the market and our business model," Mr. Consiglio said. "We now know enough about our business and the ecosystem."

The TV spot comes as Viggle looks to beef up its presence in a crowded marketplace and following the collapse of its deal to acquire rival GetGlue. The biggest question for Viggle and other second-screen TV apps is how they will turn a profit. Viggle has been burning through cash, reporting a loss of $12.4 million in the quarter ended Dec. 30, but that was down from the $19.5 million loss in the previous quarter. Revenue, meanwhile, grew to $3.9 million in the most recent quarter from $2.1 million in the quarter prior.

Mr. Sillerman has been supporting the company, extending his loan agreement with Viggle to $15 million from $12.5 million in December and then to $20 million in January, accompanied by an advance of $1 million. Last month, Viggle secured a $25 million additional line of credit from Mr. Sillerman's investment firm.

Viggle's advertising model is the biggest part of its monetization strategy. While Viggle does sell standard units on a traditional cost-per-thousand-views basis, it more often works with advertisers by charging them only when users engage with the ads and complete an action.

Mr. Consiglio said 54% of its advertisers in its most recent quarter were repeats and that marketers were spending more money when they came back for second or third campaigns. Reoccurring brand partners include Best Buy, Verizon, Target and Kraft.

Looking ahead, the company plans to enhance its rewards catalog with hundreds of new offers, including experiential offers from TV shows. "If you prove loyalty to a show you should get something from that show," Mr. Consiglio said.

Viggle has also begun offering V-gifts, where brands deliver coupons and other freebees to users just for using the app.

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