Fox is preparing to wade deeper into Snapchat by handling all the ad sales for Vertical Networks, the digital media startup that was specially designed for the messaging app.
Fox's first deal is with Boost Mobile, which will sponsor Vertical Networks' dating show "Phone Swap," about people on blind dates trading phones to learn about each other. Boost's ad campaign is about getting consumers to switch phone carriers. The brand will be mentioned during the show, which premieres for its third season on Tuesday, and will run six-second commercial breaks. (Snapchat just began running six-second ads that don't allow skipping last week.)
It's the kind of brand integration that's common on television, especially on reality shows, but Snapchat has avoided them for years as it tried to maintain barriers between content and commercials. However, that's not the best way to appeal to the networks and studios Snapchat needs to develop programming.
This is the first product placement and brand integration that Vertical Networks has done on Snapchat. Vertical Networks runs a number of Snapchat properties, including a digital magazine called Brother and shows like "Celebrity Binge Watch," "Yes Theory" and a new murder-mystery "Solve."
Fox will be able to sell ads for all that content. Vertical Networks was founded by Elisabeth Murdoch, the daughter of News Corp. CEO and founder Rupert Murdoch.
"We sell content across other platforms already," says Meredith Brace, Fox Networks Digital senior vice president. "Fox Sports is a good example. It's available on Facebook and YouTube and we manage that inventory. This is ... an extension of what we're already doing."
The Boost deal, the exact terms of which were not disclosed, is a model for how Fox could pitch brands on ad space across its television networks and Snapchat. Boost will run 30-second commercial spots on the TV version of "Phone Swap," when it starts airing on television over the summer.
Bringing in Fox to handle ad sales for Vertical Networks could help increase the value of the sponsorships. Media partners like Fox are able to set their own ad prices when they deal directly with brands, while advertisers that go through Snapchat's ad platform bid on ad space with competing brands.
The Snapchat ad platform typically offers lower prices than direct deals, and Snapchat has been struggling to drive revenue growth. Deeper sponsorships like the one with Boost could give advertisers incentives to spend more.
"Phone Swap" averaged 10 million viewers in the 48 hours each show was up in the first season, according to Tom Wright, CEO of Vertical Networks. Those are solid numbers for Snapchat, which counts views when people tap into a program for any amount of time, but not directly comparable to a TV series, which typically measures the average audience every minute a show airs.
"Building a loyal audience is what we have focused on on Snapchat," Wright says. "It's about that behavior around people finding shows they love and tuning into watch those shows on a consistent basis."
Fox plans more programming for Snapchat, as well, according to Brace, who would not elaborate on the types of content in development. "Fox is working on creating extensions of its shows in partnership with Vertical Networks for Snapchat," Brace says.