Magazine article Marketing
As the company settles into its second year of trading, Nicola Clark talks to its marketing chief about branding Virgin's biggest venture.
The fact that Virgin Media's managing director of brand and marketing, James Kydd, is the only original Virgin Mobile executive still with the business is testament to his willpower. Since Virgin Media launched in February 2007, following the merger of NTL and Telewest and the takeover of Virgin Mobile, Kydd has been at the coalface of marketing. As well as a multimillion-pound marketing spat with Sky, he has overseen the wholesale re-launch of the biggest Virgin brand in the company's history.
'A company is only as good as its brand perception - the Virgin brand certainly has a halo effect on customers' expectations,' says Kydd, who also accepts that these expectations can be challenging.
Kydd's first task during Virgin Media's three-month launch was to second NTL and Telewest staff for positions in the new company. The 80-strong NTL/Telewest marketing team was almost halved to create Virgin Media's branding division, which includes art directors and copywriters. The reorganisation was eye-opening for Kydd. 'There was a guy in Manchester who literally could not explain what his job was - he did nothing,' he says. Kydd goes on to admit that getting people from the various companies to work together was difficult.
With the new structure in place, and the NTL and Telewest businesses kept ticking over, Virgin Media avoided a lengthy beauty contest for its advertising business, bringing in tried-and-trusted agencies Rapier and RKCR/Y&R.
However, there was no respite. Just weeks after the launch, Virgin Media and Sky embarked upon a bitter public spat in which the latter's basic channels, including Sky One, were removed from the Virgin platform in a dispute over carriage fees. The tit-for-tat ad campaign that followed fuelled media interest in the bust-up.
Some industry watchers believe the affair confused the customers of both companies, but Kydd has no regrets. 'It did Sky more harm than us, and we are ploughing our own furrow in marketing now,' he says, adding that Sky's marketing efforts have served to boost awareness of the Virgin Media brand, a claim disputed by Sky. Ultimately, it was Virgin that stepped back from the fray, after it lost an estimated 70,000 customers 'Following our research, we changed our tactics and became far more positive, with campaigns such as 'We love Setanta and we love Sky Sports too'. I think Sky really struggled to know what to do then,' adds Kydd.
Sky, though, has aggressively defended its market position as the leading digital broadcaster. In February, Sky had a customer base of 8.4m, compared with Virgin Media's 4.8m, and has continued to outstrip its rival in terms of customer acquisition (see Data file). 'Communicating our leadership in content, product innovation and value, our marketing has helped Sky to grow almost three times as quickly as cable in both TV and broadband, and even faster in telephony,' says a spokesman.
Chris Locke, group trading director at media agency Starcom, says Virgin Media has done a good job of building on its challenger brand status and positioning itself as the 'good guy' opposed to the might of Sky. However, he says Virgin1, the brand's answer to Sky One, has been 'disappointing', adding: 'Terminator: The Sarah Connor Chronicles were good, but the channel needs to get bigger and better content. …