Sky and Virgin Media Strike Unusual Deal

Sky and Virgin Media enjoy something of a tetchy relationship at present, and who could blame them? Together, they monopolise a huge portion of the pay-TV, broadband, mobile and home television markets.

True, whilst the two companies are fierce rivals on all fronts, they’ve found room for cooperation in the past, like in the appearance of Sky channels like Cinema and Sports on Virgin TV platforms. However, that was mandated by the media regulator Ofcom, who demanded that Sky’s services be available on all platforms.

Now, in a show of rare cooperation, Sky and Virgin Media have announced a strategic partnership which will enable businesses of all sizes to benefit from a more advanced form of TV advertising across both platforms. Advertisers will soon be able to leverage a potential audience of more than 30 million viewers, putting it on par with the likes of Facebook and Twitter.

The partnership centres around Sky’s AdSmart platform, which uses location data for each individual customer and deep knowledge of customers traits and habits to surface adverts which are specifically relevant to their location and life, in much the same way online adverts work. Additionally, Sky will benefit from technology developed by Virgin Media owner Liberty Global.

The partnership targets both linear (traditional) TV and Video-On-Demand platforms across both systems to “transform the scale of addressable TV advertising in the UK”, whilst making use of the trusted and quality medium that is television.

To understand why this is quite a big deal you have to understand the nature of traditional television advertising. Because television is the same across the whole country (bar some region specific channels), competition for advertising slots was high and the only feasible way to advertise would be to be a national business.

That locked out a huge number of smaller business who, when the internet matured, abandoned any hope of advertising on TV and moved online. This, in turn, created a vacuum for advertisers on TV and, as small businesses did well advertising online, a decline in demand for TV advertising.

That’s what these new platforms aim to address. By offering hyper-local advertising, they can charge significantly less for a slot, enabling smaller businesses to leverage the TV platform. When Sky and Virgin claim this will be akin to a revolution for TV advertising, they aren’t kidding – it’s a real reformulation of the equation, and one which should have the contact Sky phone lines lighting up in short order.

Virgin Media’s Chief Executive Tom Mockridge commented: “Quality programming deserves to be supported with quality advertising. In partnering with Sky we’re putting the UK and Ireland at the forefront of TV advertising innovation. We’re giving consumers advertising that is more relevant to them and giving brands a trusted destination to deliver intelligent, tailored TV campaigns to a targeted audience.”

Andrew Griffith, Sky’s Group Chief Operating Officer, said: “Addressable TV is the high quality, brand safe and transparent medium that leading brands have already been adopting in their thousands. Today’s partnership takes that to the next level with the extension of AdSmart to millions more homes meaning more relevant ads for Virgin customers and a larger platform for advertisers.”