Virgin Media sees subscriptions soar thanks to £41m ad spend

Virgin Media says it has added a net total of 38,300 new households to its cable subscription base in the first quarter of the year, boosted by its £41m marketing spend.

Virgin Media  Broadband TV ad
Virgin Media Broadband TV ad

The company says the growth is its highest since it was formed by the merger of NTL and Telewest four years ago, and helped operating income increase to £76m from £13m.

It attributes the growth “to a combination of a historically low customer churn rate of 1.1%”, as well as expansion of its reach and its opening of new shops.

The company says marketing costs were £41m in the first quarter, up from the £32.8m it spent in the fourth quarter last year, and the £31m the company spent in the same period in 2009. Marketing costs include advertising, brand costs, agency fees, support and research, public relations and “internal communication costs”.

Recent campaigns have focused on its high-speed broadband offerings and “family” offers for existing Virgin Media customers. It is also championing its HD capabilities in time for the World Cup.

These have helped the company report a 53% increase year-on-year in broadband subscribers to 72,300, 35,700 net new TV subscribers, and 81,200 new mobile customers,

“This quarter, we added cable customers at our fastest ever rate.We are developing our services to exploit our natural network advantage, both now and in the future. More customers than ever before are choosing faster broadband and every day millions of our customers are enjoying the benefits of the video-on-demand revolution we are leading,” says Neil Berkett, chief executive of Virgin Media.

Virgin Media is currently reviewing its creative, direct and digital marketing agencies, in an effort to develop an integrated approach to its communications.

In February, the company renamed ntl:Telewest Business as Virgin Media Business.

Earlier this month, Virgin Media TV brand and marketing director Jeff Dodds stepped down from his role to become Virgin Media director of internal communications and engagement.

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