Fox Cable Network Group’s new extreme-action sports network, Fuel, may not have much name recognition and only limited carriage. But it has quickly signed up a number of national advertisers, who see it as a way to reach an audience that does not watch TV regularly.
The most recent advertisers to make marketing platform deals include T-Mobile Communications’ Sidekick PDA/cellphone; Warner Bros.’ “The Grind,” a movie about skateboarding; Artisan Entertainment’s “Step Into Liquid,” a film about surfing; Sony’s PlayStation; Nintendo of America’s GameCube; VF Corp.’s Lee Jeans; and Honda Motor Co.’s new SUV, Element. In all, some 25 national advertisers have signed on. This is rare for a young network-given that it has only some 5 million mostly digital subscribers.
What is it advertisers see? The answer is easy: Fuel is targeted to perhaps the most highly sought-after viewership group.
“The young male demographic is the most difficult to reach,” said Bill Carroll, VP and director of programming for New York-based Katz Television Group. “When you accomplish that, you make yourself extremely attractive to specific advertisers.”
Fuel can do this even though it doesn’t yet have ratings from Nielsen Media Research-nor is it offering ratings guarantees.
“I don’t want to say this is easy, but this network has been so well targeted,” said Guy Souza, executive VP of advertising sales for Fox Cable Sports. “It reminds me of how cable was targeted in the early days. So many advertisers are trying to reach this important demographic: men, boys 13 to 24. There has been quite a response to it.”
Mr. Souza said Fuel has been able to draw on the Fox Cable and Fox Sports stable of national advertisers, with about half of Fuel’s deals from existing Fox advertisers. Fuel has targeted 50 to 100 advertisers, in categories including movies, video games, clothing, recruitment services, soft drinks and electronics. Fuel and Fox are part of News Corp.
Fuel launched in July with programming that covers a wide range of competitive and noncompetitive sports: skateboarding, surfing, BMX, freestyle motocross, snowboarding and wakeboarding. It also offers music videos.
While there are no specifics available about the latest deals, Fuel executives have said they will consider nontraditional advertising-from product placements to spots that are shorter than the usual 30 seconds, and some longer. So far, Fuel’s pitch seems to be on target.
“We feel this action-sports genre is going to explode,” said Chris Magel, senior VP and group director of national broadcast for Publicis Groupe’s Optimedia International, New York, who bought the network for client T-Mobile. “You can do a lot of good things with a network this size. T-Mobile has already signed a number of action-sports athletes, so this is a natural extension to what it is doing.”
For its deal with Warner Bros. to promote the skateboarding movie “The Grind,” Fuel produced a behind-the-scenes program, covered all the red-carpet festivities of the movie’s premiere and provided the film with special branded-advertising promos.
Fuel comes from Fox Cable and Fox Sports broadcast and cable networks, which already target younger men, so most national ad buyers surveyed believe it has an excellent chance to prosper. The name Fuel was purposely chosen to disassociate it from other Fox networks, so viewers don’t confuse it with other program services or see it as part of a large corporation.
The pricing is also right for advertisers, especially when compared with more expensive sports events aimed at a similar audience, such as ESPN’s powerhouse “X-Games.”
Advertising packages for Fuel, according to media agency executives, can range from $50,000 to $80,000, with individual spots going anywhere from $75 to a couple of hundred dollars per commercial spot.
“You don’t have to pay $1 million or $2 million like you would for a minimum sponsorship for the X-Games,” said Andrew Lein, VP of account services for Palisades Media Group in Santa Monica, Calif., the agency that has done a deal with Artisan Entertainment.
Typically, with a cable network start-up, national advertisers are given price incentives through multiyear deals. But Mr. Souza said there is so much demand for this network he has not had to make any multiyear or exclusive advertising deals.
“If you take a big deal like that, advertisers usually also want exclusivity,” Mr. Souza said. “But I thought if we had one big advertiser, viewers would go, `What’s up with that?’ So we figure it was much better to take all. It has challenged [all] advertisers to be creative.”
Concerning the lack of Nielsen ratings, Mr. Souza said, “It’s been a nonissue for advertisers. You want to have the ratings statistically stable, and with a 5 million-home universe, it’s absolutely impossible to get a sample that you can measure.”
Mr. Souza believes at 20 million to 30 million subscribers, Fuel will ask Nielsen to measure viewership. Most of its subscribers come from satellite service DirecTV. It also has cable deals with Time Warner Cable and Cable One.