Home Analysis Advertising Sky and Virgin prove the TV industry can set aside its rivalries...

Sky and Virgin prove the TV industry can set aside its rivalries to deliver the advanced ad-tech scale that buyers want

Share on

Major ad buyers want more scale for household-level addressable advertising and for advanced ad buying to be made as simple as possible. One agency giant – GroupM – has publicly called for media owners everywhere to set aside old rivalries for the greater good of television. Anyone who wants to marry the power of TV with data-optimised targeting will benefit from greater collaboration.

That provides some context for the announcement three months ago that Sky and Virgin Media are cooperating to create what, in effect, will be a unified TV targeting platform covering their respective footprints. That means about 12 million homes and 30 million people are available for addressable advertising through a single buying point – Sky Media.

This development is unprecedented, as two Pay TV rivals collaborate to grow the overall market for addressable advertising rather than fight each other for their own share of it. Sky is ahead of the game, in both the technology and sales stakes, when it comes to addressable so the question of why this deal was struck should be addressed to them. And the answer is provided by Jamie West, Deputy MD and Group Director of Advanced Advertising at Sky Media.

“The ‘why’ is quite simple and straight-forward,” he says. “If you put yourself in the shoes of a marketing director or agency, what they want is easy access to market. Many of them recognise the capabilities of addressable linear TV and a lot of clients and agencies want addressable across multiple platforms. They want to transact against the same [target] audience without being billed by multiple vendors. We offered to partner with Virgin to provide consistent functionality and consistent interaction points. This was about finding a balance between our commercial ambition and advertiser requirements.”

West says Sky found like-minded individuals at Virgin Media and its parent company Liberty Global, giving them a shared goal. The press release issued in June started by explaining the ambition to create brand-safe targeted TV advertising, quickly emphasised the ability to offer “transparent, brand-safe environments and trusted measurement” and then declared that the footprint of 30 million viewers for the addressable platform “puts it on a par with leading social networks.”

There are plenty of clues, then, that this deal is partly about countering the threat of online giants and their data-driven digital advertising. Both parties said they want additional sales houses and channels to benefit from the Sky AdSmart technology over time.

The efforts to generate scale for addressable TV advertising are unlikely to stop there, and will probably include more platform partnerships. West reveals: “We are keen to expand our reach beyond the Sky and Virgin platforms.” Asked if the same collaborative philosophy seen in the UK will be applied to other markets, like in Italy (where Sky AdSmart has been live for around a year) and Germany (where it is being implemented over the next two years), he did not deny it. Deals with Pay TV operators in European markets were not ruled out.

Returning to the Virgin Media deal covering the UK and Ireland, West confirms that the current focus is on what is considered the biggest opportunity: linear addressable on the set-top box. The immediate priority, once the technology and data integrations are complete, will be to help channels that are already AdSmart-enabled on Sky in the UK to become addressable on the Virgin footprint, too. That means Viacom channels (including Channel 5, the first UK public service broadcaster to adopt addressable), Fox International channels (including Nat Geo) and A+E Networks channels (like History), as examples.

The immediate challenge is to align two technology platforms. Sky AdSmart, the addressable TV solution that Sky developed with Cisco, is not being ported into the Virgin Media ecosystem, as that was deemed impractical and the cable operator has its own ad-tech partners, anyway. The companies are currently exploring how they achieve consistency using a mediation layer. The infrastructure must be built to enable data-optimised executions while protecting their respective data (and ensuring all the usual privacy compliance, including with GDPR). No launch date has been set for the combined implementation.

The long-term ambition is that the partnership should stretch beyond linear STB addressable to advanced VOD targeting and, ultimately, TV Everywhere services.

In Ireland, we will see an interesting crossover that is not relevant to the UK. There, Virgin Media owns the commercial broadcaster TV3 Group, whose channels include TV3 (the second largest channel in the country), 3e and be3. Sky will enable these channels for addressability on the Sky Ireland service and enable Sky channels on Virgin Media. Virgin does not have channel brands of its own in the UK.

Photo: Sky’s impressive new HQ in West London (a new building on the original Sky Central site in Isleworth), where Sky Media is based.


Interested in addressable TV advertising?

Then check out Future TV Advertising Forum in London, this December. We have addressable covered from every angle:

Normalising advanced advertising
How we strip out the additional cost and complexity associated with targeting via TV, and make addressable a more integrated part of media planning.

Addressable for everyone
How we get everyone into the addressable TV advertising business, including the free-to-air market.


Share on