…Sky’s marketing spend up 18% after Virgin battle

BSkyB spent 734m on marketing in the year to June 30, a 112m – or 18% – rise on the previous 12 months.

BSkyB spent £734m on marketing in the year to June 30, a £112m – or 18% – rise on the previous 12 months.

The figure, about ten times Sky’s spend on above-the-line, includes all activity such as retention marketing, customer upgrade activity, customer acquisitions, an increase in online costs and investment in its databases and on below-the-line media such as direct mail and experiential.

Sky, which is embroiled in a public battle against cable rival Virgin Media, also upped its above-the-line spend to £96m, a 28% increase on £75m a year earlier.

Much of the activity relates to advertising and marketing in the first half of 2007 with Sky pushing its See Speak Surf package of TV, home telephone and internet and waging a lengthy ad battle with Virgin Media.

The satellite operator says the overall figure includes a £49m increase relating to residential broadband and £2m relating to Easynet Enterprise, the business it bought in 2005 for £211m.

Marketing costs relating to new customers rose £16m to £316m while retention and other marketing increased £19m to £187m, which it says is due to investment in its segmentation database and higher online marketing costs.

The costs were revealed in Sky’s results for the 12 months ending June 30. Results from the group, 39.1% of which is owned by News Corporation, showed full-year underlying operating profits rose 6% to £958m.

Revenue climbed 10% to £4.5bn with ad revenue up 3% and average revenue per user climbing to £412, an increase of £21 a year ago.

Figures released by Nielsen Media Research in July show Sky spent about £70m in the first six months of the year, 40% more than a year earlier and about double the £37m spent by Virgin Media.

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