BSkyB – nearly the company with the UK’s biggest marketing budget

Will BSkyB soon become the UK’s biggest marketing company? It’s a sobering thought  – especially for those who, like culture secretary Jeremy Hunt, must now consider whether Rupert Murdoch and his son James are fit and proper guardians of the 61% of the broadcast media company they do not already own. What will they do with unfettered control of all that money – not so much when it is directed at ITV and the BBC (the case already), but at BSkyB’s non-broadcast rivals?

In fact, BSkyB is still some way from being the company with the biggest marketing budget. The latest Nielsen figures, which leaked out just before Christmas in The Telegraph, reveal that BSkyB has now moved into number two position behind Procter & Gamble in the advertisers’ league table: not quite the same thing, but the most reliable indicator we have in these matters. The main casualty – inevitably given what has happened to it – is the Central Office of Information. For some years the COI sat on, or very near, the top of the pile. Its fall from grace has been melodramatic: despatched from top to fifth place, with spending slashed 47% to settle – for now at – £112m. There’s no likelihood of it getting back.

BSkyB, on the other hand, increased its spend 20% to reach £161m. But even that wasn’t nearly enough for it to become top dog in the near future. P&G put on another third – giving it an unassailable lead at £189m. Unless of course BT, currently 7th with a spend of £104m, continues its phenomenal 44% multiplication of spend for the next three years (unlikely, I suggest).

These Nielsen figures are interesting indicators, but they need to be viewed with considerable caution. Although they purport to record expenditure to the end of the calendar year, there are a number of caveats; for example, there is no internet spend included for the last quarter (a significant omission). They are, moreover, merely a ratecard indicator: they do not tell us what was actually spent after discount. Finally, they do not record all forms of marketing activity. And some of these excluded sectors, like POP, are absolutely massive.

For all these imperfections, however, the Nielsen figures reveal a remarkable truth. BSkyB has become one of the UK’s most powerful companies, and it has done so in large measure through the intelligent application of marketing.

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