Sky’s the limit: What Sky Sports' new channels mean for TV marketing

Shortly before the start of the new football season, broadcasting behemoth Sky unveiled one of the most substantial overhauls of its sporting coverage in years. And given the symbiotic relationship between the television company and the online gambling sector, the changes could have major implications for sportsbook marketers.

Last month the broadcaster confirmed previous media reports it was planning to scrap its numbered sports channels in favour of themed offerings focused on specific sports. As a result, customers have since seen Sky Sports 1, 2, 3, 4 and 5 disappear from their TV guide, with dedicated channels for football, cricket, golf and F1 taking their place. Sky Sports Action and Sky Sports Arena will also broadcast international rugby union, rugby league, boxing, darts, NFL, tennis and more.

Consumers very rarely react well to change initially but Sky clearly came to the conclusion that something had to give. Recent figures revealed average Premier League viewing on Sky’s live TV channels declined 14% last season – and that was despite paying two-thirds more to show the matches under its latest three-year deal with England’s top-tier football competition. BT, meanwhile, recorded a more modest 2% fall.

“The advertising impact from this change by Sky will allow the industry to be a lot more strategic in terms of audience targeting” – Alexis Zamboglou, director of marketing at Ladbrokes Coral

To combat this decline, Sky’s new viewing format aims to entice new subscribers who might previously have scoffed at the £49.50 price tag for its cheapest sports package. Under the new set up, customers will now have the option of paying for a much cheaper £18 deal – although a total Sky Sports bundle will still prove relatively expensive.

Hitting the target

The emergence of new channels for specific sports means operators should be able to adapt their TV advertising strategies to more segmented audiences. And a number of sportsbooks have said the Sky Sports overhaul could lead to new opportunities for marketing departments – particularly when it comes to fine-tuning their targeting across TV.

“The advertising impact from this change by Sky will allow the industry to be a lot more strategic in terms of audience targeting and how we shape our TV advertising strategy to pinpoint niche sports fans,” Alexis Zamboglou, director of marketing at Ladbrokes Coral, says.

“You’ll see a greater emphasis on sport-centric creatives, which will need to resonate with very different audience profiles,” Zamboglou adds. “It’s also an obvious strategy change by Sky to combat falling live sports viewership numbers, which if it works, will have an obvious upside to advertisers.”

A potential emergence of more “sport-centric creatives” also ties in to a broader trend occurring within the sports betting sector – one where operators are now looking outside of football for lucrative sponsorship deals. Kindred Group and Sky Betting & Gaming, for example, both recently signed partnerships with county cricket teams, while Betsson’s Betsafe brand in July also became a principal sponsor of rugby union giant Saracens.

However, not everyone is convinced. One industry consultant described it as an “interesting long-tail opportunity” but one that wouldn’t make any real difference in the short- to medium-term. And in the ever-more competitive sports betting vertical the ability to deliver highly targeted advertising might sound like a huge positive but, according to Pinnacle’s head of marketing, Harry Lang, sports audience viewer habits are changing fast.

“The recent talent cull at ESPN in April this year when loads of big names were cut occurred because subscriber numbers were falling off a cliff as the consumption behaviour of a younger audience favoured on-demand and online,” he says. “A cursory glance at the incremental growth of the esports audience worldwide shows their preferred media is streaming via Twitch etcetera with only a tiny percentage watching via TV.”

Sky Sports recently ditched its numbered channels in favour of a format based on specific sports. Credit: Ben Radford/Corbis via Getty Images

Hidden opportunities

Some analysts have attributed Sky’s dwindling viewing figures to the rise of cheaper on-demand alternatives like Netflix and Amazon. For today’s consumer it’s all about choosing what they want, when they want and where they want. The days of Sky Sports 1 or BBC1 being the home of all high-profile shows and events also appear to have ended, particularly when the summer’s biggest TV show – Love Island – is able to get viewing figures of 2.5 million on ITV2.

Any opportunities for sportsbook operators following the Sky Sports revamp will, of course, be dependent on the success of the project itself. Aſter all, if Sky’s new master plan fails to have the desired effect, a more targeted TV advertising strategy is unlikely to make up for a shrinking audience size. And one dilemma experts are predicting Sky will face – despite some positive signs from its F1 channel – is filling up the allotted hours with enough quality content to satisfy its current customer base and entice new subscribers in.

However, online gambling consultant Peter Marcus believes there are actually some hidden opportunities for sportsbook marketers to consider when assessing the impact of the Sky Sports revamp. Due to current costs and a propensity for customers to bet on either football or horseracing, the former William Hill Online COO advises sportsbooks to target and appeal to football fans on channels dedicated to other sports.

“We found on a Friday night with the rugby league that people who loved that sport also tended to like football too,” he says. “We were advertising for the football on the Saturday on a Friday night during the rugby and I think companies should be looking to do that with these new channels too. So with the qualifying round of the F1 on a Saturday morning, plug the football in the afternoon. No one really bets on F1.”

Sky Sports now has channels for football, cricket, golf and F1. Credit: Christina Pahnke/Sampics/Corbis via Getty Images)

Bean counting

Based on Marcus’ logic, the fact the Sky Sports overhaul could actually lead to less targeting is one of the most interesting aspects at play. He adds: “I think what this is going to give is an opportunity to be quite clever with the statistics to work out whether if people like one sport they also like other sports. If you can get that right then you can get much smarter marketing based on cheaper TV spend and same impact.”

Within Sky’s proposed new channel alignment there will be premium favourites – football, F1 & Arena specifically – which will likely come with a high stakes or biddable advertising price tags. Lang explains: “Sky is a huge commercial entity and with significant rights fees to cover, so it’ll be interesting to see whether betting operators can benefit alongside rights owners, the viewing public and Sky themselves – or if this will simply make premium sports advertising in the UK even more expensive and drive advertisers towards streaming and digital channels.”

Indeed, a consequence of the extortionate costs of advertising around Premier League games has been a tendency for operators to look either towards other sports or lower league football. But the revamp may provide the latter with a much-needed slight boost – particularly now the Premier League has its own dedicated channel – and cheaper advertising opportunities for sportsbooks.

With so many hours of TV to fill, Sky is likely to provide more coverage opportunities for leagues below England’s top-tier division, or it could even take lessons from its rugby league success and look for new fixture timings to avoid any schedule clashes. As Marcus concludes: “I think there are some really interesting opportunities now with Sky Sports to package things up to get some good football punters away from the actual sport itself. This is what everyone has always desperately tried to achieve.”