Sky and Virgin Media are close to a landmark deal to join forces in the advertising market, in a move meant to challenge local media and tempt spending away from Google and Facebook. The pay-TV and broadband rivals are in advanced discussions over a partnership that will effectively mean Virgin Media will join Sky’s Adsmart targeted advertising network, industry sources revealed. Once the deal is finalised, the cable operator is expected to add up to 3.7 million homes to the network, which allows TV advertisers to target consumers based on an array of attributes including their postcode, level of affluence and age. Using data from credit agencies and other sources, Adsmart claims to be able to focus marketing spending on characteristics as specific as whether a home has a south-facing garden or a pet. The system works by replacing standard commercial breaks on participating channels with more targeted advertising, delivered to set-top boxes via a broadband connection. As well as Sky’s own channels, Channel 5 and MTV, owned by Viacom, have signed up to Adsmart. Virgin Media, owned by the pan-European giant Liberty Global, will bring extra scale to the operation and in return take a share of revenue of the advertising it distributes, sources said. Sales will be handled by Sky’s media sales house, which aims to use Adsmart to boost its sales to £1bn by 2020, from under £800m last year.
Sky and Virgin Media are in advanced discussions about joining forces in the advertising market in an attempt to rival Google and Facebook as well as local media. It's believed that Virgin Media will join Sky's Adsmart targeting advertising network. Adsmart competes with Google and Facebook by targeting TV ads at consumers, based on a range of their attributes. However, the deal is not thought to be exclusive since the Liberty Global set-top box used by Virgin is capable of targeted advertising on channels that are not part of Adsmart.