Snaps Lets You Mashup And Share Branded Photos, Raises $2.3M From S2K, And Google And Vevo Execs

Instagram has yet to make a formal push into using its platform for paid advertising and marketing purposes (although its co-founder is certainly putting out some signals for what it might do when it goes there). But in the meantime, Snaps â€" a startup, platform and app based around a photo network for spreading viral brand messages by way of photo mash-ups â€" is building out a standalone business targeting this very area. Today, the New York-based company is announcing an angel investment of $2.25 million, with a notable group of investors backing it.

They include Steve Kantor of S2K (Kantor is possibly most recently known for heading up Cantor Fitzgerald’s ill-fated move into investment banking); Ben Barokas, the co-founder of Admeld (acquired by Google for $400 million) who is now GM of marketplace development for Google; and Jonathan Carson, Vevo’s chief revenue officer. Carson is now also Snaps’ chairman of the board, along with another new appointment, Andy Levitt as president.

Other illustrious investors in this round include Michael Kassan of MediaLink; Mike Katz (ex-Yahoo); Leo Hindery Jr. (ex-AT&T); Bill Lohse (ex-Ziff Davis Publishing); Digital Capital Advisors; Dolgen Ventures; and Lucas Point Ventures. Prior to today, Snaps raised $1.1 million in April 2011 under its previous name, GoldRun, from investors including Jeremy Zimmer of United Talent Agency and Ed Matthias of the Carlyle Group.

While Instagram has built out an informal â€" and almost accidental, if you hear co-founder Kevin Systrom describe it â€" marketing network on its social, mobile photo-sharing platform, Snaps has been using its service to do much of the same, except with the express purpose of getting brands to pay for the privilege.

“Brands have realized that ‘communicating with images’ is the primary activity of consumers when they use social networks,” Vivian Rosenthal, CEO and founder, tells me. Some of those paying customers include Kate Spade, Deloitte, Lifetime, Travel Channel, Wendy’s, Nestle and Showtime. These brands pay Snaps through an SaaS model, she says, charged on a monthly basis.

You can see one of the fruits of one of those campaigns in the image here, of a baby â€" presumably the charge of a Kate Spade fan â€" donning a pair of her shades. Yes, cute, but also a little iffy (hello, Honey Boo Boo), and overall almost certainly viral in its whole positioning.

“Through our content management system we track all of the content and provide clients with the data and analytics around the branded photos as well as the photos themselves,” she notes.

Right now, Snaps users can share posts on Facebook, Twitter, Instagram, Tumblr, and by email. Noticeably absent are other networks like Pinterest and Google+ (although the latter may see an integration with the addition of a Googler to the list of investors.)

“We are adding more channels with each product release and prioritizing them based on user demand,” Rosenthal says. “Facebook and Instagram are the most popular,” she adds. She declined to give out specifics on how big its audience is today, except to note that Snaps is “seeing 100%+ monthly growth in downloads and active users since launching [in 2011.]“

Snaps says that the investment today will be used for two main areas: ad tech (that is, it’s expanding the engineering team to meet a demand from brands and agencies to better measure the effects of the social media sharing that Snaps enables); and new services to create more interesting features for luring users into sharing more in general. (I wouldn’t be surprised to see things like video and specifically GIFs make their way in here, for example.) The prize is a tempting one: the projectsion are for some $7.3 billion in mobile ad revenues worldwide in 2013.

Yet, as with so many other services that piggy back on other social networks that will also be looking to ad-based models to generate revenue, it will be interesting to see how companies like Snaps will evolve when those ecosystem partners become competitors:

“While Snaps is the pioneer in providing brands with a platform to engage with consumers in the visual Web, we are excited for others, like Instagram, to get into the game and help us to create this market,” Rosenthal says diplomatically.

Indeed, although sites like Instagram already offer some room or viral marketing, a lot of that goes uncaptured, pointing to an opportunity for those who can pick it up and harness that more effectively. “There are hundreds of millions of images shared via mobile device each day, yet many photo-based platforms are struggling to realize revenue from these efforts. Snaps monetizes photos through a new type of engagement: real consumers creating authentic photo-based advertising that moves beyond the more passive Like, Comment or Heart,” said Carson in a statement.

This is what interests other investors, too. “As everyone is looking beyond the banner these days, Snaps is seeing very real traction with brands, entertainers, and sports teams,” noted Katz in a statement. “Driving genuine engagement as well as ROI on mobile is far from trivial and Snaps is one of the few companies I have seen that is really getting it right.”

Snaps! is a mobile app that allows fans of a brand community to place branded virtual content into their photos and seamlessly share their creations, or “Snaps”, across their favorite social networks. With Snaps!, brands increase consumer engagement by enabling fans to become content creators and brand ambassadors. Snaps! has created mobile marketing campaigns for dozens of brands including Nestle, Kraft, The Ravens, The NY Giants, Fox Studios, Sony Pictures, Sofia Vergara, NBC Universal, AwesomenessTV, Dexter, The Travel Channel....

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