The partnership was first rumoured in April, and will see Virgin Media’s customer base added to Sky’s addressable TV offering, Sky AdSmart. It covers both targeted linear and video on demand (VOD) TV advertising.
The agreement significantly expands the reach of AdSmart from the 11m homes it had access to before the Virgin tie-up to now include 15m homes across the UK.
The two rival pay-TV providers claim that this reach translates into 30 million individual viewers in the UK and Ireland, since the average household occupancy is 2.3 people.
This scale is essential in convincing enough advertisers to invest in addressable TV in the UK in order to make it a competitive offering that rivals that of digital.
Graeme Hutcheson, director of digital and Sky AdSmart at Sky, told The Drum in April that scale of channels “is really important” because advertisers love the idea of having an addressable solution, “but it is meaningless if you can only do it on a couple of channels or on a low proportion of the population”.
With the ability to reach just under half the UK population, the two companies claim the offering is “on par with leading social networks”, forming part of the ongoing fight between traditional media and the might of the digital duopoly.
What’s more, the TV providers are putting emphasis on the “quality, trusted, and brand safe environment” of TV over that of digital, where advertisers are increasingly concerned about where their advertising is appearing alongside doubts as to the veracity of the metrics they receive from Google and Facebook.
Revenue will be split proportionally between Sky and Virgin, taking into account the addressable audience and impressions. The sales side of the operation will continue to be handled by Sky’s media sales house, which is targeting £1bn in sales by 2020 after achieving £800m last year.
In January Channel 5 became the first major broadcaster to strike a deal with Sky AdSmart.
Pat Kiely, executive lead of Virgin Media Solutions and MD of TV3, and Jamie West, group director of advanced advertising at Sky Media, will be leading the development of the strategic partnership.
Kiely said: “Quality programming deserves to be supported with quality advertising. In partnering with Sky we’re putting the UK and Ireland at the forefront of TV advertising innovation.
"We’re giving consumers advertising that is more relevant to them and giving brands a trusted destination to deliver intelligent, tailored TV campaigns to a targeted audience.”
West said: “TV remains the most effective and trusted advertising medium there is and continues to innovate at pace. Addressable TV is the high quality, brand safe and transparent medium that leading brands have already been adopting in their thousands.
"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.”