Strategy Verdict - Virgin Media

Strategy: Virgin Media merges online and TV ad sales.

Much has been said about how TV and online are merging as media channels. Ostensibly then, it seems likely that the natural extension of this is to merge TV and online sales forces.

It would make no sense at all - in a world where TV and online are merged - to have different sets of people selling across the one medium to the same agencies.

The problem is that we are clearly not at that stage yet. TV and online are separate media at the moment and while there may be some "moving image" content available online, and there might be some online-style content available on TV, it looks likely that the separation of the two media will continue for at least another year, if not for a few years longer.

It is, therefore, interesting that Virgin Media has decided to take such an early first-mover advantage. The company is to merge its online sales operation with that of IDS, its TV channels sales house.

On the one hand, there will be rewards for being integrated in the long term. On the other hand, the advantages for it right now - beyond increasing its visibility in the industry through PR - are unlikely to be detectable financially.

Having said that, I can't see how the move will cause it harm. Until the two media are merged, I don't believe that this can be a bad move, even if it might not necessarily be a great one.

Even if the only tangible benefit at this stage is increasing the column inches devoted to Virgin Media, that is strategically, a good thing for it.

3 OUT OF 5

- Review by Dave Katz, head of trading, Media Contacts.

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