Sky teams up with Virgin Media to fight online advertising

Sky (LON:SKY) is joining forces with rival Virgin Media (LON:VMED) in order to expand its targeted advertising platform.

As an attempt to counter the dominance held by Facebook (NASDAQ:FB) and Google (NASDAQ:GOOGL), the TV giants will join forces to increase advertising outreach.

The partnership was announced on Thursday as TV companies are predicted to face a drop in advertising this year, due to fierce competition from online platforms.

“I want us to compete with the Facebooks and Googles of this world,” said Andrew Griffiths, Sky’s chief operating officer.

“Today’s partnership takes that to the next level with the extension of AdSmart to millions more homes meaning more relevant ads for Virgin customers and a larger platform for advertisers,” he added.

When the media giants join forces, it will see Sky’s Ad Smart platform increase its reach from 11.4 million Sky subscribers to a total of 15 million UK homes with the help of Virgin Media.

Sky’s Ad Smart Platform was launched back in 2014 and provides a range of different adverts for different households who are watching the same programme. It allows advertisers to target viewers according to factors such as lifestyle, age and location using the companies customer data.

Sky is the first advertiser to show different adverts to different households during the same programme.

“It’s about growing the size of the cake and then dividing it up so that everyone benefits,” Andrew Griffiths said in reference to the partnership.

According to eMarketer, Spot advertising on television is forecast to grow 0.7 percent this year. Digital advertising is forecast to grow as much as 9.5 percent in 2017.

Televised adverts do offer a sense of security to advertisers. Due to strict content controls, TV advertising offers a safer alternative to the digital platforms. Earlier this year several companies including Volkswagen (ETR:VOW3) pulled their ads from YouTube after they appeared next to extremist and inappropriate content on the internet.