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back to article Olympic champ ad blitz dents Virgin Media despite £1bn sales

Virgin Media spent a whopping £52.6m on marketing costs in the telco's first quarter ended 31 March. The company ran TV, print, online and billboard ads featuring the likes of Olympian Usain Bolt and Virgin Group's Richard Branson. However, VM said the extra publicity spend, which climbed a massive 49 per cent during the three- …

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Anonymous Coward

North of £2k per customer?

That'll take some paying back at £40 per month.

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WTF?

Re: North of £2k per customer?

yer i worked it out before seeing your comment, was just under 2.5K!

Add in engineer costs to install the service in customers home, general network set-up costs (laying the fibre optics), customer services costs, general business costs etc, and it seems a vast outlay per customer.

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Anonymous Coward

Re: North of £2k per customer?

That's being very generous too and assuming that all of the 21,200 new sign ups were inspired by the adverts. In reality you ought to subtract an estimate of how many would have signed up without that publicity before doing the division.

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Joke

Wooo hooo!

Their second profitable quarter. Really flying now, huh?

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"featuring the likes of Olympian Usain Bolt and Virgin Group's Richard Branson"

Surely they get Branson for free?

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Wrong. Branson has no direct involvement in Virgin Media, his Virgin group gets paid a sum each year for the use of the branding and as I recall, there's an agreement in the small print for how much he personally gets to take to his tax haven each time he's used in their publicity.

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Bronze badge

value of the Virgin brand

it's an interesting system. There's a brand applied to a number of different (unrelated) areas of business - airline, ISP, perfume, banking, etc etc - run by unrelated companies.

So the overall brand is built on success of the individual companies that have no influence over each other. Yet problems with one company image don't seem to affect others. Though I doubt whether anyone would decide not to fly on an airline because their home broadband was rubbish.

And all Virgin group have to do is take their cut and squirrel it away in the Caribbean.

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I think the agreement also gives them rights to use branson's image and get him to do a couple TV appearences every year.

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Thumb Up

Branson......

He sure ain't Stoopid.

Since Virgin took over NTL, the service has improved.

As an ex-airline employee, I know that Virgin Airlines are VERY well respected in the industry.

So he must be doing something right.

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I hope their marketing department gets fired. Out of a cannon.

It's not the telly ads that bother me, it's the sheer amount of paper they're shoving through my letterbox every week. I'm getting thick, glossy brochures and ridiculous Tivo box offers two to three times a week, week after week. I've signed up to Mailing Preference Services, but since Virgin's crap is all addressed to "The Occupier", it makes no difference.

I'm stockpiling it to burn for heat when the double-dip recession dooms us all.

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FAIL

Re: I hope their marketing department gets fired. Out of a cannon.

Damn right Sargs.

It's ridiculous, at least 3 or 4 letters/leaflets a week.

Straight to the (recycle) bin.

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Re: I hope their marketing department gets fired. Out of a cannon.

You're receiving this because it's not "posted" (no stamp/frank), and therefore not covered by the MPS. It's leafletting carried out by Royal Mail (also called "unaddressed mail").

If you want to stop this, you have to opt-out with the Royal Mail:

http://www.royalmail.com/you-home/controlling-your-mail

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Re: I hope their marketing department gets fired. Out of a cannon.

That doesn't work if it's addressed "To The Occupier", or if it's delivered by anyone other than the Royal Mail (other companies aren't hard to find and door-to-door leafleters are pretty much unstoppable anyway).

In short, there's no way to stop that junk.

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Vic
Silver badge

Re: I hope their marketing department gets fired. Out of a cannon.

> it's the sheer amount of paper they're shoving through my letterbox

Marvelous, isn't it?

I have a wood-burning stove. Virgin Media have helped keep me warm this winter :-)

Vic.

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Bronze badge

Annual revenue per customer: £46.95

That means they take in only 47 squid each year TOTAL from the customer, before they do anything to provide that service?

That's £4 a month. What service do they provide that costs less than £4 a month and which over 50% of their customers ONLY have that service?

Or did someone misplace the decimal point? Because Sky's Q3 results show £500 ARPU.

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I'm guessing it's meant to be "MRPU" - monthly.

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Anonymous Coward

arpu

A in this case equals average. not annual.

so its £46 per month, per punter

or £552 annually

not to shabby

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Bronze badge

Re: arpu

That's not what the article says:

Annual revenue per user (ARPU)

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Anonymous Coward

Re: arpu

then the article is wrong. or VM is on the brink of collapse.

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FAIL

The £52.6m marketing spend added 21 000 customers - and they consider it to have paid off?

I'd hate to see what package those new customers are on!

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This post has been deleted by its author

FAIL

And remember, a mere month after the period results are in, they change the terms of service and undo all that hard advertising by pissing off their customer base who shift to a new provider that doesn't only give them advertised speed for 13 hours of the day!

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This post has been deleted by its author

The best advertising...

is where the service sells itself by simply being the best.

so, rather than spend millions on marketing they could have spent that on infrastructure and service improvements so that their customers extolled the products and so provided a free, personal, direct advertisement to their friends and families, and so attract more customers.

Much more cost effective and better for their customers, too!

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Re: The best advertising...

Your idea has much to commend itself, being based on logic and an understanding of the customer's needs, together with the effect of ensure the business retains customers and provides employment to its workers.

To that extent it probably has no place in big business.

Much easier to spend a lot of money with an advertising firm, and if that doesn't work drop the first bunch and put more money with a different firm.

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Re: The best advertising...

Dyson is a good example of this. Firstly, they try to get maximum word of mouth from innovative design.

James Dyson spends a good proportion of his time giving interviews to the media, promoting what they do.

They have opened a press office in West London, dedicated to assembling the media for new product launches.

Their TV campaigns are created in-house - they simply hire a director + crew to film the TV adverts.

Their on-line presence is maintained in-house.

This strategy makes them highly competitive against others with their average products who have have to shell out big bucks to ad agencies and other supplies to promote their products and get them noticed.

As seen with how expensive it is for Virgin Media to attract and retain customers.

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Re: The best advertising...

yes, but their products are expensive and shite.

Give me a Henry any day of the week.

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What I don't get is why they didn't wait until AFTER they had upgraded everyone's speed. Checking the timetable it will be another year until I get upgraded. Or at least confine their advertising to the areas already upgraded. If I wasn't a VM customer and saw one of their speed upgrade ads I might be tempted to check out their website. If it then told me I would only get the new speed after a year I would jog on.

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Bronze badge

Still the only one offering fibre optic to the door ?

Am I right in thinking that the others only offer Fibre to the Cabinet and then copper from there ?

Annoyingly, VM (or their database) seems to have overlooked part of my street, though some adjoining buildings clearly have cable.

Virgin's ADSL can be blighted by the less than brilliant wireless of the Netgear DGN1000 they supply. Revised firmware recently released seems to help but it's still no match for the bigger, better, Netgear router issued to cable users which noticeably improves wireless coverage.

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Anonymous Coward

Re: Still the only one offering fibre optic to the door ?

Virgin doesn't do FTTP either, what they offer is basically FTTC, but with shared medium past the cab. It's a bit of copper coax and a clever ruse from their marketing department which the ASA seems perfectly happy with that leads you to believe that they offer "true" fibre.

By the same objective measure my old dial up was a fibre connection since the vast majority of the connection was provided over fibre.

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Re: Still the only one offering fibre optic to the door ?

The major difference being that the shared copper co-ax from the VM cabinet to your premises is carrying up to 120Mb/s dowstream for your internet as well as all those TV channels for you and everyone else on that same bit of co-ax passing all your neighbours houses.

The twisted pair copper from the BT cabinet to your premises is dedicated to your single voice line and single ADSL[2] signal of up to (what is it these days? 70Mb/s?) Getting 70Mb/s over a bit of shitty twisted pair copper is quite impressive, but I don't see it getting much better.

The downside of the VM network is that it's *still* designed mainly around content delivery so upstream speeds are shit. I've no idea if 120Mb/s is approaching the limit or not. Maybe they have more wiggle room and are holding some back so as to always be ahead of BT.

I suspect FTTP is likely still some way off on normal consumer level BB despite some "testing" roll-outs, although BT, if they really want to beat VM, can do it much cheaper on poles than VM can in ducts. But, again, there is some moves to open up the poles to other providers.

The future of BB is a twisted and tortuous thing to predict.

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Anonymous Coward

It's a shame

I spent 45 minutes in a phone last night, and the night before, trying to contact them. Gave up in the end.

Doesn't seem much point advertising that you're a communication company when you're effectively uncontactable!

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