While Sky was incorporated in 1987, its social channels were drawing attention to its 25th birthday yesterday. The remotes have changed a lot in that time, as has the broader media market, and while it still counts over half of the country's 1.6 million households as subscribers and raked in record profits last year, there's no doubt the competition has ramped up significantly in recent years. So, in honour of this milestone, here's a story we wrote last year about Sky's fruitful relationship with its long-serving agency DDB.
In an industry renowned for its chopping and changing, there aren't too many agency/client relationships that can claim to have lasted 20 years. But Sky and DDB have found their happy place and they're breaking out the china to celebrate one of the country's longest-running—and most successful—unions.
Sky, which was established in 1987 and kicked off with just a few UHF channels, has a long history of quality advertising, the vast majority of it alongside DDB. And, as every journalist knows, whenever any major anniversary comes up, it's compulsory to ask one question: what’s the secret?
“We really trust these guys to create great work. And they’ve got a consistent record of doing so," says director of marketing Mike Watson. "In the early days, and to some degree still, we had a small marketing department at Sky and we considered DDB an extension of that. We were really, really tight, and they’re our one stop shop, so we developed a really close relationship because we had to. There’s also no bullshit. We tell it like it is. There’s surprisingly little ego. It has been helpful that there’s very few layers in New Zealand marketing, and in Sky in particular, so we can kill bad ideas quickly. I think we do make a lot of quick calls on gut feel and we’re prepared to take risks. There’s a few clichés in there, but they’re true.”
DDB NZ and Australia’s executive chairman Marty O’Halloran joked that he’d been with the agency the whole time, so the secret must be him. But it’s more likely put down to the fact that the agency understands Sky’s business so well and has witnessed its evolution first hand (it started working on the account when it had 20,000 subscribers).
“One of the early marketing directors said to me ‘produce the business results for us from an acquisition and retention point of view and we’re prepared to be quite brave and creative'. We’ve always pushed the boundaries creatively, but always had in mind the business results … Mike and the earlier marketing directors have always had a great understanding of the power of creativity to connect with their customers.”
The pair have created some memorable work over the years, and by using its creativity to get Kiwis excited about the content, O'Halloran says DDB played a major role in convincing them that the service was worth paying for. He says pay TV was a difficult concept to grasp in the early days so it had to drive home the premium, exclusive programming that “Sky did such a great job of securing” (DDB’s first campaign was ‘Don’t Miss Out. Get The Picture’). But both Watson and O’Halloran pointed to the Mark and Marty campaign, which featured the line 'what will you be doing if you don't have Sky?', as one of the highlights (moderately interesting fact: the guy in the Eunuch ad also plays Lloyd, Sky's creepy envelope licker).
“At the time we had 20 percent penetration and we thought there was a lot of low hanging fruit from a sports perspective,” says Watson. “We really wanted a campaign that resonated with males. That was one of the real highlights of the work DDB has done.”
O’Halloran: “That was all about the desire and showing the lengths some would go to to watch Sky. Sky was very focused on the business results, but this campaign captured the hearts of New Zealanders over six or seven years and kept building. They were eager to see what these two characters were getting up to.”
But even the best campaign ideas tend to have a shelf life and Watson called time on it after around 12 executions when he saw a script about the pair breaking in to a nursing home and unplugging a life support machine so they could watch Sky.
O’Halloran says the work that’s been done on Sky over the years (it has also worked on Fatso, which Sky held a majority stake in, and Rialto, a privately owned channel that screens on Sky) has been a joint effort between DDB, Interbrand and OMD (which was originally DDB Media when it started working with Sky). And, just as Sky has a big number of long-serving staffers, especially in its executive ranks, he says quite a few of the Omnicom staff have been there just as long.
He says Watson is a very astute and adventurous marketer. And that attitude means he's developed a fantastic relationship with the creatives.
"They’ll do anything for him," he says. This was evidenced recently with the hugely successful social media campaign to launch season four of Game of Thrones on SoHo, which was quite a departure for a brand that's renowned for its great TV work.
"Creatives are fragile beasts and so passionate about what they create. The passion they had and the time they put in on that was amazing. They were working 24/7."
Fundamentally, Watson says Sky's business hasn’t changed since it was established: it's still about providing entertainment and, as its own research shows, if it can deliver four or five great TV experiences every week, subscribers see the value. But, more recently, the advertising has changed. In the past, it tended towards the humorous (and, understandably, given all the media channels it owns, towards TV), with a plenty of retail to back that up and grow its subscriber base. But as the business has matured and grown to over 50 percent penetration, Watson says using humour as a proxy for entertainment is a bit limiting. So last year it launched the new, more serious, more cinematic 'Come with Us' brand, which aimed to take customers on a journey through its massive range of content—and inspire staff about the positive role the company plays.
O'Halloran says the process Sky went through last year was all about looking at the brand holistically and setting it up for success in the future. And one of the main goals was to integrate that brand thinking through the organisation.
“That’s where we’re starting to get some traction,” he says, with material being made in-house now matching Sky's brand marketing and "going to another level."
There are plenty of Sky naysayers in New Zealand and, as TV viewing habits change, the original disruptor is increasingly being disrupted. But Watson doesn't think it's peaked—and, with a bit of work, he's confident it can pull an Air New Zealand and transform itself into a loved Kiwi brand.
"It’s something a lot of brands in New Zealand face when they reach a certain size," says O'Halloran. "You start off being seen as an innovator and a disruptor. Then Kiwis get a bit sceptical and wonder if they’re too big. That’s all about the how the brand interacts and connects with New Zealanders. And it’s up to Sky to prove that customers are getting value and ensure they’re still happy to pay that bill every month.”
And, as its subscriber numbers, revenue and profit continue to go up, it seems to be doing a pretty good job of that.
And for a more indepth look at how Sky plans to deal with the incoming threats and changing consumer behaviour, check out the NZ Marketing cover story from last year here.