BSkyB moves in to Virgin territory

SBHD: BSkyB’s expansion into the sports drinks sector follows similar moves by The Big Breakfast, NatMags and Channel 4, where media owners are emulating Richard Branson’s extension of the Virgin brand.

Once upon a time there was the advertiser and there was the media owner. Nice and simple. Two very different sides to the arrangement, a supplier and a buyer with very different kinds of business.

Not so now. Last week (MW April 21) BSkyB became the latest media owner to announce plans to extend its brand into a new territory with the launch of its Sky Sports Drink on May 1.

The apple and blackcurrant-flavoured canned drink will be manufactured by AG Barr under licence and distributed nationally through supermarkets and wholesale outlets and positioned to compete with Lucozade’s NRG drink.

AG Barr was attracted to the deal because Sky Sports’ audience profile so closely matches the young, sport-conscious market for “isotonic” or health drinks. BSkyB was attracted by an opportunity to promote its summer of sport including Ryder Cup golf, boxing and cricket.

There are two aspects to media brand extensions. One is as part of an off-air marketing and promotional strategy that helps reduce on-air clutter. The other is as a profit centre in its own right with the added benefit of broadening the brand recognition from a narrow media association into a general household name.

There are numerous examples of the first practice, from Big Breakfast branded pancakes, bread and muffins to Cosmopolitan board games and House Beautiful wallpaper. During the past year a Blind Date jewellery brand has been launched and an Emmerdale cheese which has now been dropped due to lack of interest.

There are far fewer of the second. But that is the area which offers the most interesting potential for media players.

“We approached a few drinks companies but only AG Barr took it seriously and not just as a gimmick,” says BSkyB marketing manager Jim Hytner. He remains reticent about follow-up products but admits that they are on the agenda “depending on the drink’s success”. BSkyB has wider ambitions to break into other consumer sectors.

For Channel 4 brand extensions are purely promotional, according to its head of marketing Peter Franklin. “It wouldn’t be true to say that we link the demographics of a particular programme’s audience with a potential for exploiting the programme brand. It has been just another way to promote Channel 4 to the public,” he says.

“The first point is always to promote Channel 4. We sponsored a board game, Ad Mad, as a vehicle to get Channel 4 associated in the public’s mind with advertising, as opposed to ITV.”

In contrast, brand extensions are much more than promotional tools for the National Magazine Company. The firm has a director of brand extensions and last year the retail value of its branded products and services amounted to £9.5m.

The company is in discus-sions with curtain, tableware and bedding manufacturers, although NatMags managing director Terry Mansfield admits there have to be limits to the products that can be used: “Brand values are far stronger than people realise. I turned down the concept of Cosmopolitan condoms because it would have made the brand image too sex-oriented.”

House Beautiful publisher Frank Farmer says there are other areas where media owners should exercise caution: “We’ve been careful to move into areas of merchandise that aren’t heavily branded. We don’t want to go into the same business as our advertisers.”

Paul Stobart, European chairman of branding specialist Interbrand, believes the extension of media owners’ brands into new markets is a logical expansion of their increased marketing.

“There has been an explosion in the branding of TV stations in the past few years as more competition has entered the media market,” he says. “The ones that succeed will be those that have built up their own brands.

“Sky has done an exceptional job for itself and it is fascinating to see it take the brand into other markets,” he continues.

There has also been a structural change in fmcg manufacturing in the UK caused by the growth of supermarkets’ own brands. A media owner is likely to find numerous manufacturers who supply generic products willing to slap a well-known name on those products.

A manufacturer knows the media name will already have had much spent on it and will bring with it a ready-made target market.

The expensively marketed media brand is also likely to make it easier for the product to make it onto supermarket shelves, giving quick access to nationwide distribution.

Stobart believes the products chosen for a media brand extension must contain broadly the same values as the media brand itself and must be attractive to the same viewers or readers.

The Big Breakfast, Cosmopolitan and Sky Sports appeal to a young audience and Stobart believes that they are more willing to accept media brands moving into unusual areas than other consumers.

However, he points out that conventional brand extensions can move across unlikely categories regardless of a target market’s age group if they have a linked strategy.

“Look at Dunhill. Who would accept perfume from a tobacco company unless, over time, Dunhill hadn’t created a luxury goods brand for itself?” he says.

For BSkyB a sports drink is very much in line with company’s growth strategy based on dominance of the UK’s televised sports coverage. A sports drink serves to underline that association.

In that way, it looks less opportunistic than many media owners’ moves in this area and obeys one of Interbrand’s rules: “Media owners should move into brand extensions in the same manner as any other company,” says Stobart. “You have to know what you’re doing and why you’re doing it.”

It is a view echoed by BSkyB’s partner in the venture, AG Barr. “It is possible that there will be more than one drink,” says AG Barr group marketing manager Nigel Dugdale. “BSkyB is keen to move on consumer products in the same way that Richard Branson has. But they must be careful not to go too far, too fast – a lot of credibility is at stake.”