Campaign UK

MO­BILE WORLD CONGRESS 2017

- By Gideon Spanier

Ev­ery­thing from ad-block­ing to ad fraud, AR to VR and 5G to O2

O2’s de­ci­sion to re­new the nam­ing rights for The O2, the Lon­don en­ter­tain­ment arena, re­flects the im­por­tance of the part­ner­ship in main­tain­ing cus­tomer loy­alty in the mo­bile mar­ket.

Nina Bibby, chief mar­ket­ing of­fi­cer at O2, hailed the new ten-year deal, which is es­ti­mated to be worth about £12m a year – or £120m over the decade – to venue owner AEG.

“We know this helps us re­tain cus­tomers, it drives brand con­sid­er­a­tion, it drives aware­ness, it drives sig­nif­i­cant me­dia value,” Bibby said as she looked back on the mo­bile net­work’s orig­i­nal ten-year deal that in­volved re­brand­ing the Mil­len­nium Dome as The O2 in 2007.

James Bar­ford, a tele­coms ex­pert at En­ders Anal­y­sis, said there was ev­i­dence that O2’s part­ner­ship with the arena and other mu­sic venues “does help with loy­alty”.

He cited fig­ures that show O2 is the mar­ket leader in the UK at re­duc­ing churn – the rate at which sub­scribers quit – and was “the strong­est-grow­ing mo­bile op­er­a­tor” last year.

O2’s UK cus­tomer base has risen from 17.8 mil­lion in 2007 to 25.5 mil­lion in 2016, ac­cord­ing to the brand’s most re­cent fi­nan­cial re­sults. Con­tract churn has halved from 1.8% to 0.9% over the same pe­riod.

The new deal with AEG cov­ers the nam­ing rights for The O2 and bet­ter ben­e­fits, in­clud­ing a dou­bling of the num­ber of tick­ets made avail­able for O2 cus­tomers to pur­chase 48 hours in ad­vance.

O2 re­gards Pri­or­ity Tick­ets, which launched in 2008, as a key part of its Pri­or­ity loy­alty pro­gramme.

AEG and O2 will also in­vest jointly in up­grad­ing lounges and other “in-venue ex­pe­ri­ence” ar­eas for O2 cus­tomers.

Bibby said the part­ner­ship with The O2 is “such a fun­da­men­tal part of what we do for our cus­tomers in terms of hav­ing that richer re­la­tion­ship with them – give them more of what they love to do”.

An ad in­dus­try source with knowl­edge of O2 de­scribed the part­ner­ship as “the best cus­tomer ac­qui­si­tion and re­ten­tion tool they’ve ever had”.

The O2, seen as a “white ele­phant” when it was the Mil­len­nium Dome, has been a suc­cess un­der AEG’S own­er­ship. It has over­taken New York’s Madi­son Square Gar­den to be­come the world’s most pop­u­lar en­ter­tain­ment arena by vol­ume of an­nual ticket sales, ac­cord­ing to Poll­star. AEG claims the venue at­tracts nine mil­lion vis­i­tors a year.

Spon­sor­ship ex­perts said the part­ner­ship is “unique” be­cause the phone brand is so closely linked with “the bricks and mor­tar” of the 21,000-ca­pac­ity arena and it might have been dif­fi­cult for AEG to find an­other com­mer­cial part­ner.

“What other brand would try and take on the spon­sor­ship? You would spend two decades telling peo­ple it’s not The O2,” one source said.

O2 re­port­edly paid £6m a year in 2007 when the part­ner­ship be­gan. It is thought that the value of the deal has in­creased over the decade as the venue, which hosted the Brit Awards on Wed­nes­day night, has be­come more pop­u­lar. O2 and AEG de­clined to com­ment on fi­nan­cial terms.

Paul Sa­muels, ex­ec­u­tive vice-pres­i­dent at AEG Europe, said the part­ner­ship has “gone from strength to strength” be­cause it was “not just a spon­sor­ship”.

He added: “Ev­ery­thing we do, we do to­gether. When a show is an­nounced at The O2, cus­tomers get a chance to buy tick­ets be­fore any­one else and it is launched first on the O2 Pri­or­ity plat­form. So O2 helps us to sell tick­ets.”

Bibby ad­mit­ted the UK mo­bile mar­ket was close to sat­u­ra­tion point but said “it’s still a growth mar­ket” be­cause the num­ber of con­nected de­vices in the home and wear­ables has “ex­ploded”.

O2 dropped the “Be more dog” po­si­tion­ing from its mar­ket­ing last year in favour of “More for you”, and Bibby said a new cam­paign will launch “in the next few weeks” about “un­for­get­table live ex­pe­ri­ences”.

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 ??  ?? The O2: new ten-year deal in­cludes nam­ing rights and more ben­e­fits for O2 cus­tomers
The O2: new ten-year deal in­cludes nam­ing rights and more ben­e­fits for O2 cus­tomers

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