Virgin Media has turned to comedienne Ruby Wax to breathe new life into its relaunch (MW last week) as the full extent of its dispute with rival BSkyB becomes apparent.
Wax, who has previously appeared in ads for Vauxhall, the BBC and Tesco, will replace Hollywood actress Uma Thurman as the face of the brand, which last week announced that it had lost almost 47,000 customers in the first three months of 2007.
But industry experts have slammed the move as “desperate” and called on Virgin to communicate the improvements in customer service, for which its former incarnation NTL was infamous.
Virgin spent £25m on the Thurman campaign to launch its “quadruple play” offer of broadband, television, fixed-line telecoms and mobile services. But insiders claim the ads, created by Rapier, have failed to deliver – a suggestion backed up by last week’s results.
Virgin lost 46,900 customers in the first quarter of this year, taking its total number customers down to 4.8 million. That followed a 37,000 fall in the final quarter of last year. At the operating level, Virgin Media made a £15.3m loss, against a £3.9m profit last time as it absorbed extra revenue costs.
By contrast, Sky reported what analysts described as its best quarter in six years earlier this month. The two companies are embroiled in a dispute over how much Virgin should pay to carry Sky’s basic channels and the cable company has taken legal action in the High Court, accusing its rival of anti-competitive behaviour.
NTL bought Virgin Mobile for £962m last year and relaunched as Virgin Media in February but shareholders are already getting restless, with one – Franklin Mutual Advisors – reportedly demanding a showdown meeting with management. One industry source says: “When you have paid a huge amount of money for a brand like Virgin you don’t expect the business to go backwards.”
Sources claim the shadow of NTL still hangs over the company’s marketing, despite Virgin veterans James Kydd and Ashley Stockwell being appointed as managing director of marketing and managing director of brand respectively.
Old and tired
One competitor says: “The ads look a bit old and tired and as a result Virgin have failed to differentiate themselves against the competition. The communications have been more direct response-led and that’s very much an NTL way of doing things. The Ruby Wax campaign looks a little bit desperate.”
But Kydd defends the Thurman campaign and the decision to use Wax and says the new ads focus on its telephony business, which lost a net 63,400 subscribers in the first three months of this year and was the main reason for the overall decline in group customers.
Kydd says research suggests that Virgin Media has 80% awareness following the Thurman ads – three times higher than that of NTL. “This has been the quickest awareness building I can think of by any brand,” he adds. “But Ruby Wax is a good fit for the new campaign. She fits because she is talkative and in your face.” Kydd favoured big brand campaigns featuring high-profile celebrities during his time at Virgin Mobile but some experts believe that addressing NTL’s history of bad customer service should be Virgin Media’s priority.
Giles Warner, director of the customer management team at Deloitte, says: “You have to find a way to challenge people’s preconceptions. You need to position the brand in such a way that you start to address their concerns. Customer service is not really a very sexy thing to talk about but if they don’t get it right it won’t be long before people start to leave.”