Virgin war drives up Sky ad spend
Sky: took on Virgin Media with an aggressive campaign highlighting the loss of its channels from the cable service
BSkyB's war of attrition against Virgin Media sent its marketing spend rocketing by more than 40% year on year to about £70m for the first six months of the year.
This is almost double the amount spent by rival Virgin Media, which clocked up a marketing spend of about £37m to the end of June, according to Nielsen Media Research figures.
BSkyB's marketing outlay in the first six months of this year is more than the £68m that Marks & Spencer spent on advertising in the whole of last year.
Sky boosted its spend from just under £50m in the first half of last year, and since January has bullishly promoted its combined TV, broadband and home telephone service under the banner of "See, Speak, Surf".
The satellite company further boosted its marketing spend in a very public advertising battle after a standoff over carriage fees with Virgin Media saw Sky's basic channels including Sky One - and programmes such as Lost and 24 - removed from 3.4m Virgin Media cable homes.
Virgin Media's rebrand from NTL in February - in a campaign fronted by Uma Thurman and, more recently, by Ruby Wax - saw its own spend skyrocket.
In the first half of last year the company, then NTL, spent £16.5m on marketing - meaning it has boosted its budget by 130% in the first half of the year.
"Ultimately this is a battle for the hearts and minds of what you would term the modern broadband converged viewer," said Jim Marshall, the chairman of media planning and buying Starcom.
"What Sky and Virgin have each elected to do is to go into battle for this consumer and it inevitably costs to get your proposition over. Both companies seem to have boosted spend by about £20m. The question you have to ask is who has the longer-term appetite and deeper pockets for the battle."
Sky's six-month spend alone would have been enough to rank it 11th in Nielsen Media Research's top advertisers for the whole of 2006.
The satellite company would have tied with Nestlé's £69m budget, beating M&S and Vauxhall at £65m. Supermarket giant Tesco spent £76.3m.
In 2006, Sky was the fourth largest advertiser in the UK, spending a total of £117.4m. Last year it spent £50m in the first half of the year and boosted its spend in the second half.
Last year, the only advertisers to eclipse Sky were Procter & Gamble, Unilever and the Central Office of Information, which coordinates government advertising.
It should be noted that Nielsen Media Research's digital figures only include spending on online display advertising, and do not include the considerable sums spent on search advertising.
BSkyB's marketing surge this year has paid dividends. Last week, it beat analyst expectations across the board in terms of customer acquisition numbers and average revenue per user (ARPU) for the first six months of this year.
Nielsen Media Research has provided complete media spend figures for the six months to the end of June for most categories including TV, radio and press.
However, a lag in data gathering for some categories - internet advertising in particular - means that supplementary estimates on a small amount of media spend, amounting to a few million pounds, have been provided by media agency sources.
Regards Satdude. :thum:
Sky: took on Virgin Media with an aggressive campaign highlighting the loss of its channels from the cable service
BSkyB's war of attrition against Virgin Media sent its marketing spend rocketing by more than 40% year on year to about £70m for the first six months of the year.
This is almost double the amount spent by rival Virgin Media, which clocked up a marketing spend of about £37m to the end of June, according to Nielsen Media Research figures.
BSkyB's marketing outlay in the first six months of this year is more than the £68m that Marks & Spencer spent on advertising in the whole of last year.
Sky boosted its spend from just under £50m in the first half of last year, and since January has bullishly promoted its combined TV, broadband and home telephone service under the banner of "See, Speak, Surf".
The satellite company further boosted its marketing spend in a very public advertising battle after a standoff over carriage fees with Virgin Media saw Sky's basic channels including Sky One - and programmes such as Lost and 24 - removed from 3.4m Virgin Media cable homes.
Virgin Media's rebrand from NTL in February - in a campaign fronted by Uma Thurman and, more recently, by Ruby Wax - saw its own spend skyrocket.
In the first half of last year the company, then NTL, spent £16.5m on marketing - meaning it has boosted its budget by 130% in the first half of the year.
"Ultimately this is a battle for the hearts and minds of what you would term the modern broadband converged viewer," said Jim Marshall, the chairman of media planning and buying Starcom.
"What Sky and Virgin have each elected to do is to go into battle for this consumer and it inevitably costs to get your proposition over. Both companies seem to have boosted spend by about £20m. The question you have to ask is who has the longer-term appetite and deeper pockets for the battle."
Sky's six-month spend alone would have been enough to rank it 11th in Nielsen Media Research's top advertisers for the whole of 2006.
The satellite company would have tied with Nestlé's £69m budget, beating M&S and Vauxhall at £65m. Supermarket giant Tesco spent £76.3m.
In 2006, Sky was the fourth largest advertiser in the UK, spending a total of £117.4m. Last year it spent £50m in the first half of the year and boosted its spend in the second half.
Last year, the only advertisers to eclipse Sky were Procter & Gamble, Unilever and the Central Office of Information, which coordinates government advertising.
It should be noted that Nielsen Media Research's digital figures only include spending on online display advertising, and do not include the considerable sums spent on search advertising.
BSkyB's marketing surge this year has paid dividends. Last week, it beat analyst expectations across the board in terms of customer acquisition numbers and average revenue per user (ARPU) for the first six months of this year.
Nielsen Media Research has provided complete media spend figures for the six months to the end of June for most categories including TV, radio and press.
However, a lag in data gathering for some categories - internet advertising in particular - means that supplementary estimates on a small amount of media spend, amounting to a few million pounds, have been provided by media agency sources.
Regards Satdude. :thum: