More trouble for DDB London as £36m Virgin Media reviews

Accounts come and go of course but Virgin Media’s advertising at DDB London is worth a chunky £36m and it’s also the central plank in what now seems to be a leaky vessel, DDB’s role in masterminding all Virgin’s communications including direct marketing which it handles with Rapp.

Virgin is now reviewing the advertising part and, according to Campaign, leaving its other arrangements with Rapp and media agency Manning Gottleb OMD intact.

All of which suggests that Virgin Media’s grand marketing plan and DDB’s attempts to execute it have gone badly awry.

DDB recently made a number of redundancies and this was soon to be followed by the departure of four senior creatives to DLKW Lowe.

The redundancies at least seemed perverse as, at the time DDB was reportedly struggling with the volume of work required by Virgin and that usually means more rather than less hands at the pump.

Virgin Media, like Sky and BT, offers packages of pay TV, broadband and phone services and this, in the UK at least, results in a relentless stream of ads and mailshots. The pace is set by BSkyB-owned Sky whose marketing budget is over £1bn a year and whose mailshots cover the nation’s living room floors each weekend.

Virgin Media, which is still heavily in debt although its figures have improved recently, is the minnow in this market although its pay-TV business is bigger than BT’s. But its main marketing advantage over Sky used to be that it was delivered by cable rather than satellite so you didn’t need one of those horrible dishes on your roof.

The dishes aren’t so horrible now and Virgin also failed in its big TV initiative, the merger with ITV which was aborted a couple of years ago when James Murdoch, then CEO of BSkyB, bought 17.9 per cent of ITV.

He was subsequently ordered to sell this down to 7.5 per cent by the Competition commission but the job was done, although it cost BSkyB several hundred millions as ITV’s share price had plummeted in the interim.

Virgin finally pulled out of UK TV programming when it sold its half stake in UKTV (BBC Worldwide owns the other half) to US-based Travel channel owner Scripps Interactive Networks last week.

So we have a troubled flagship agency, DDB London, and a client, Virgin Media, under fierce pressure from a much bigger rival, Sky, with another potentially powerful rival BT on the horizon if only it could get its TV act into gear.

Have DDB’s ads been worth all the trouble?

There’s a strategy all right – ‘a more exciting place to live’ – but one that clearly requires a bit more exposition to have any chance of rolling back Sky’s panzer divisions.

But maybe this is an impossible job. Sky’s ads just plug programmes, programmes and more programmes, chiefly but not exclusively sports. These, after all, are what people are buying.

But Virgin, unlike Sky, doesn’t make its own programmes (or not many of them). It’s primarily a distributor of Sky product. You can see why DDB is struggling a bit.

But wouldn’t any agency?

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.
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