In the UK pay-TV market, they are two fierce rivals. But now satellite operator Sky and cable company Virgin Media are forming a “strategic partnership” to scale advanced TV ad targeting opportunities, against the common enemy of online platforms.

The pair have announced Virgin will use data from Sky’s existing AdSmart addressable TV system, as well as tech from its parent company Liberty Global, to underpin its offering.

The key to the deal is billed as providing a consistent currency, targeting characteristics and capabilities for ad buyers, the pair say. We have recently seen similar moves in the US, with operators teaming to harmonize their customer datasets.

But what the pairing says about the relevant positions of these UK companies is fascinating…

Sky’s AdSmart has been in market now for three years, and works by storing TV ads on satellite set-top boxes for playback in commercial breaks, targeted based on Sky’s deep customer data. It is arguably the world’s leading advanced TV ad targeting deployment, has opened up TV ads to smaller and more local companies, and is currently being rolled out across Sky’s European footprint.

Virgin Media, which is the smaller company, uses a box running TiVo software and is seen as lagging behind. It has long had the capability to dynamically insert ads in to catch-up TV, but has only made its biggest push now that its ownership by Liberty Global, which acquired it in 2013, has bedded in.

Whilst this announcement is of a “partnership”, it does not state that Sky will be receiving any assets from Virgin Media.

Both Sky and Virgin Media both have their own media sales houses to sell ads against their own channels, but last year, John Paul, advanced advertising and data VP of LibertyGlobal, told Beet.TV that Virgin Media would primarily act as the platform for other channel operators to sell  inserted ads in to their own content aired over Virgin.

It is telling that the companies’ announcement singles out online platforms as rivals: “Advertisers will be able to target a potential audience over time of more than 30 million viewers; putting it on par with leading social networks.”

Editor’s Note: This video with Jamie West was produced by Beet.TV in London.  It has been previously been published.  Whilst it gives a thorough overview of AdSmart, it was recorded in 2014 and the platform has been expanded significantly since. 

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