Special Report on Cable & Satellite: Advertisers aim to stop the sideshow: Their role in raising revenue is small but they are selling more, writes Jason Nisse

ADVERTISING on cable and satellite television in the UK is a sideshow - but an important one. The revenue of British Sky Broadcasting does not depend on advertising - the backbone of its move into profits and its revenue forecasts are subscription income. First from its film channels, then its sports channels, now its children's channels, and ultimately all its channels. The advertising campaigns for fast-moving consumer goods (FMCGs to the trade) are also not going to be based on adverts running on a service which, even when all its channels are added together, is watched by fewer than 5 per cent of television viewers.

However, this is not to say that it does not have a role to play. More than pounds 75m was spent on advertising on cable and satellite last year, and the role is growing, albeit much more slowly than had been thought when British Satellite Broadcasting merged with Sky just over two years ago.

Simon Reiss, head of broadcast at Carat International, the media buying group, says that many clients had their expectations dashed by the slow growth of BSkyB. 'People are taking it seriously, but its growth has been very slow,' says Mr Reiss.

BSkyB has been selling itself as a national television advertising medium, but as such it does not deliver the goods in the way that either GMTV of Channel 4 do. The emergence of Channel 4 as a competitor, which has been selling its own advertising since 1 January, has had a bad effect on satellite and cable. 'What Channel 4 is offering is one stop national coverage,' says Mr Reiss. 'It reaches all the areas that satellite reaches. Channel 4 is damaging the revenue of satellite.'

But though satellite does not deliver the audiences of ITV or the coverage of Channel 4, it has an important role, as a top up to the main advertising campaign, to pick up viewers who are not caught by the main sweep of the campaign.

'Building up a client's communications needs is a jigsaw,' says Andy Bolden, head of broadcasting at another large media buyer, CIA Group. 'You would use mainstream ITV for the main audience-building exercise, Channel 4 for national coverage and BSkyB for targeting of specific areas, for instance people interested in sport.'

The sort of viewer delivered by BSkyB tends to be male - a great deal of BSkyB's output in news and sport attracts a predominantly male audience - and tends to be much younger than the average ITV viewer. Mr Bolden is even more specific in the type of viewer BSkyB has.

'People who tend to view BSkyB have made the conscious decision to buy satellite television. Therefore, they have shown themselves as consumers who want more choice and are susceptible to purchasing new technology,' argues Mr Bolden.

There is also a heavy emphasis on children in the viewer mix, though there are already a number of ways to reach children without going on to BSkyB.

There are problems, though. The first is BSkyB's programme mix, which does not lend itslef to advertising. Adverts can only be run at the end of films of the three movies channels. Similarly, adverts are not run during football marches on Sky Sports. These programmes are not likely to become more advertiser friendly so long as BSkyB's revenues depend on subscriptions.

BSkyB has queered its pitch somewhat by saturation advertising during the Cricket World Cup, which brought accusations of clutter - having so much advertising that it was obscuring the message. At the same time, there have been complaints that there are too many sponsors for some sporting events on Sky Sports.

These are teething problems which BSkyB needs to sort out. But cable and satellite have definitely arrived as media.