Freesat shakes up media buying model to compete with bigger TV rivals
BBC-ITV joint venture Freesat is putting a twist on media buying in a bid to gain a rare edge over larger, richer rivals like Sky and Virgin by ending its 10-year deal with Havas in favor of a hybrid one with two independent agencies, Roast and Electric Glue.
Roast will buy Freesat’s online ads, while Electric TV will do the same for TV, having first purchased for the advertiser last September. As effective as the holding group model can be for some brands, it no longer gives others the control and flexibility they need, particularly when it comes to online ads, which is why Freesat changed gears.
At its heart, the switch is about giving Freesat control over a media plan that will eventually move from mainly brand building to driving business objectives. Whether that’s growing brand awareness or driving sales and customer loyalty, plans are underway to assess future campaigns with custom metrics beyond simply proxy metrics such as click-through rates. That was harder to do at a network agency that has pre-defined ways of planning, buying and measuring ads in order to offer larger advertisers propositions that can stretch and flex in different markets. Prior to the changes, most of Freesat’s spend had gone into TV and so it was easier to accept the old way of working.
For this to happen, Freesat has had to become more open to sharing data such as customer data and website data with its agency in a privacy-compliant way.
“There was a time when clients would be quite guarded about things like data sharing, but we have to be a lot more transparent with our partners,” said Andre Santos, director of marketing at Freesat. “We’ve hired agencies to do their best for us and that only comes from having the data needed to make the right decisions.”
Freesat’s willingness to share data comes ahead of its transformation into an online retailer next year when it will start to manufacture and distribute the set-top boxes for its TV service.
“One of the metrics we’ll eventually be able to benchmark against is conversions because once we have the e-commerce part of the business sorted we’ll be able to start investigating the attribution value of each media on our plan,” said Santos.
Unlike Sky, which has both ads and subscriptions funding its own media budget, Freesat is funded by stakeholders including the BBC and ITV as well from money made from broadcasters that pay for slot on the service’s electronic program guide. Freesat has previously spent £5 million ($6.5 million) annually on ads, whereas Sky spent £124 million ($163 million) last year, per Nielsen. As the battle to profit from TV’s fragmentation intensifies, smaller players are at risk in the absence of robust business models. It heaps pressure on media investments to do more of the heavy lifting when it comes to driving customer acquisition.
“We’re competing with some of the largest companies in the world but don’t have the budgets they have, so it’s incumbent on our marketers to think about media differently in order to give us an edge,” said Santos.
Freesat hasn’t ruled out taking some of its media buying and planning in-house eventually. It was discussed during the pitch with the agencies potentially evolving into media consultants to Freesat’s marketers.
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