Analysis: Brand spend analysis - ONdigital will continue to spend heavily on ITV as it vies with Sky for viewers

When ONdigital became the first company in the world to offer multi-channel digital TV through an ordinary TV aerial, it immediately became the number one contender on the digital scene. Across the ring stood the undisputed champion Sky Digital, with its powerful brand and formidable financial clout. However, ONdigital had innovation on its side.

When ONdigital became the first company in the world to offer

multi-channel digital TV through an ordinary TV aerial, it immediately

became the number one contender on the digital scene. Across the ring

stood the undisputed champion Sky Digital, with its powerful brand and

formidable financial clout. However, ONdigital had innovation on its

side.



Created by its joint shareholders Carlton Communications and Granada

Media Group, it was launched to customers in November 1998 and had

notched up 673,000 subscribers by the end of March 2000.



The service gained the marketing support of BT as it offered an

alternative to the combined TV and phone packages that are a thorn in

the telecom giant’s side. This has enabled ONdigital to send targeted

direct mail with BT on a third-party basis. Recently it has followed

Sky’s lead into interactive TV, launching Carlton Active to rival Sky’s

Open.



Media agencies ONdigital uses New PHD for its media planning and buying,

with BMP DDB taking care of its creative work.



Total spend and the media mix ONdigital spent pounds 36.17 million on

advertising in the year to March 2000. Most spend went on television (74

per cent), with outdoor and press each taking a 9 per cent share. Direct

mail accounted for 8 per cent of adspend, while radio took a very small

share.



Spend details The highest overall spend occurred in April 1999 - nearly

pounds 6 million was shared across TV, outdoor and press.



After a quiet June and July, ONdigital began to spend more to promote

its upcoming autumn schedule. The new football season also gave

ONdigital something to shout about in the form of its comprehensive UEFA

Champions League coverage.



Ninety-nine per cent of TV spend went on ITV companies. Channel 4,

Channel 5 and two minor satellite channels picked up the scraps. This is

hardly surprising given ITV’s support for ONdigital and the fact that

ITV is not available on Sky Digital. Carlton and Granada are among the

heaviest ITV ONdigital advertisers, alongside LWT and Central.



Conclusion ONdigital faces an uncertain future as it is threatened by

the dominance of Sky and the launch of digital TV by existing cable

companies.



Consolidation in this field seems very likely as the major players aim

to convert their customers to digital as quickly as possible before

embarking on further expansion. ONdigital claims to be ahead of its

subscriptions target but it will need to market itself aggressively -

particularly to terrestrial viewers - and this will be helped by its

links with the ITV network.



Just as Sky was bold and aggressive in its seizure of Premiership

football in the early days, ONdigital must find a marketing angle that

captures the public’s imagination. Only then will it avoid foundering in

the wake of its satellite and cable rivals.





Research by AC Nielsen MMS tel: 01344-627553 www.mediamonitoring.com.