In less than the year since its launch, BT Sport has not only exceeded viewing figures and financial expectations but also provided the added bonus of boosting brand perceptions across BT’s entire consumer product portfolio, the company claims. But BT must ensure it keeps up the marketing pace next season to grow its appeal beyond eager sports fanatics while finding new ways to monetise its core audience.
Earlier this week BT credited the 1 August launch of BT Sport – now available in more than 5 million UK households – for helping its consumer division post its first yearly growth in revenue in more than a decade.
BT’s decision to offer Sport for free to broadband customers – an offer it will continue into next year – helped drive its share of the broadband market, up from 50 per cent of new broadband signups in the quarter prior to launch to 79 per cent thereafter. In the most recent quarter (the three months to 31 March) BT added 170,000 new broadband customers, while rival Sky posted 70,000 broadband additions in the same period.
BT and Sky have been locked in a high-spending advertising battle ever since the former company kicked off its first marketing push to promote BT Sport’s launch in May last year, highlighting that it was broadcasting 18 of the coveted “top pick” Premier League matches.
David James, BT Retail marketing director, told Marketing Week the decision to launch its marketing campaign “earlier than anyone expected”, two months before the channel launched, helped drive awareness of the channel among football fanatics to more than 80 per cent – a level he says the brand has maintained throughout the season.
“The fundamental part of our marketing campaign was partnering together announcing our rights with a surprising price proposition. We had the chance to land all the key messages before Sky even reacted,” he adds.
Those levels of awareness also appeared to translate into actions. James claims BT Sport’s average viewing figures for Premier League games are 33 per cent greater than on the predecessor Premiership broadcaster ESPN, with an audience of 750,000 – 25 per cent shy of the average Premier League game audience Sky Sports attracts. Not a bad achievement in 10 months versus the decade Sky has been in the market, James says.
Brand perception halo effect
But a more important achievement than these numbers is the payback BT Sport has afforded to the wider business.
James says because BT Sport could never creatively compare with Sky’s emotionally-charged “we feel the same as you” in its first year broadcasting football as a telecoms brand, it chose to market its authentic entrance into the market by positioning around the “democratisation of sport”.
By introducing a certain level of “BT-ness” – particularly the “lighter touch content” compared with the “serious and analytical” Sky, according to James – the launch of BT Sport has also sparked a 25 per cent jump in brand advocacy on the mother brand, the biggest spike in more than a decade, the company says.
Independent data from YouGov’s Brand Index tells a slightly different story. BT’s “index” score – which includes six measures of consumer perception including reputation, impression, recommendation, quality, satisfaction and value – is actually lower currently at 4.3 (8 May) than on 19 June 2012 (6.6), shortly after it was announced (13 June) BT had acquired broadcast rights to the Premier League for the 2013-16 season.
However, BT’s index score did see spikes just ahead of the 2013/14 Premier League opening games, rising up to 11.7 on 12 July as the BT Sport marketing campaign picked up pace.
James also says the runaway success of BT Sport’s first year has also meant the business has already absorbed the £246m per season the company is paying in broadcast rights for Premier League games.
BT Sport as a proposition to marketers
The take-up of BT Sport has also proved an attractive proposition to advertisers. Jonathan Allan, director of sales for Channel 4 which handles ad sales for BT Sport, says the channels has attracted 250 to 300 brand advertisers since launch. Last week Channel 4 sales also signed up “all” the major gambling brands to advertising packages for next season.
That pool of advertisers and the amount in revenue generated by them is only likely to grow as BT Sport looks towards offering packages around the ChampionsLeague, having acquired rights to broadcast next season’s tournament.
He adds: “BT Sport is a very advertiser friendly set-up, there’s a small team and it’s easy to talk to them and the channel skews a lot younger than Sky Sports, with comparable numbers.”
Reasons to go back to the training ground
But while offering BT Sport free to broadband customers has helped draw in new customers, CCS Insight director of apps and media Paolo Pescatore says BT must seek to monetise its growing customer base if it is to remain competitive.
He adds: “It’s unsustainable to continue giving away its channels for free in the long term. As a result, we fully expect costs to grow due to numerous bidding wars with Sky on sports rights such as the Premier League rights when they next come up for grabs.”
There is also room for improvement beyond the tentpole Premier League matches, Aviva Premiership Rugby games and Moto GP races, according to one industry observer.
Steven Ballinger, head of broadcast at Carat’s Amplifi division, says: “I think it’s far to say that some of the studio shows have struggled in terms of performance, taking the Clare Balding Show and BTSportsPanel as examples. That said, BT has an opportunity to review its formats over the summer and make any necessary changes for its second season, so I think this will help to improve things.”
BT’s James also hints that marketing next season needs to focus on a wider group of consumers beyond core sports “fanatics”, which may see a more refined focus on its wider range of programming. Meanwhile, existing BT Sport customers have already started being targeted with direct marketing pointing them towards the entire range of the BT offer – such as the Moto GP companion app as well as upsell opportunities around broadband and TV, signalling another change of tack as the channel matures.
An impressive package of sports rights, a consistent marketing campaign and compelling pricing have helped BT create the first real challenge to Sky’s dominance of the sports broadcasting market in the UK. But to move from exciting underdog status, BT must ensure its entire content and marketing output as well as its long-term price positioning maintain the stamina of its exciting headline grabbing first season.