Andrew Griffith is more used to wooing City investors than advertisers. When Sky’s numbers man made a flying visit to Cannes Lions for the first time last summer, he recalls feeling that "I might go mad if I was there for very long".
But Griffith, the group chief operating officer, wants to raise awareness of the ad sales business, Sky Media, which he has overseen since 2012, and, perhaps, his own profile given that he is seen as a "CEO-in-waiting" by some insiders.
"I love my job – I love what I am doing," he says, batting away questions about whether he might want to succeed chief executive Jeremy Darroch.
Griffith, a former Rothschild banker who joined Sky in 1999 and became chief financial officer in 2008, knows how important advertising has become to Europe’s biggest pay-TV company.
Profits have declined because of the soaring cost of Premier League rights in its war with BT and the City is worried about falling audiences for live football (although January viewing was up 6%, he says). Private bank Berenberg estimates advertising generates as much as 29% of Sky’s profit, despite being less than 10% of turnover.
"We are actually a very big European media owner," Griffith says, noting that Sky brought in about £1.6bn in ad sales across the UK, Ireland, Italy, Germany and Austria last year.
Sky Media’s £1.2bn ad sales in the UK are on a par with Channel 4’s. And Griffith, who keeps a baseball bat handy in his office and fought unsuccessfully to be a Conservative MP at the 2001 and 2005 General Elections, wants to take on ITV.
Its £2bn a year in ad sales "are going down and ours are going up", he claims, putting ITV’s decline in the UK since the Brexit vote in an unfavourable light by comparing it with Sky Media’s growth in Europe.
Griffith, who keeps a baseball bat handy in his office and fought unsuccessfully to be a Conservative MP at the 2001 and 2005 General Elections, wants to take on ITV.
"It is a mathematical fact," Griffith declares, that Sky can close the gap on ITV "in the fullness of time if we continue to grow our revenues and continue to grow in a falling market, as we just have, and they continue to decline.
"Then at some point those two [revenue] lines will cross. And repricing our inventory along the way will help."
Retained ad revenues – those from Sky’s own channels, plus the commission it makes from handling ad sales for third parties such as Viacom and Discovery – were £778m last year, up from £440m in 2012.
Griffith wants to hit £1bn by 2020, driven by AdSmart, Sky’s ad-targeting technology that has pushed up prices for some inventory as much as eightfold.
Sky’s ad technology was cited by Rupert Murdoch’s 21st Century Fox as one of the reasons for its fresh takeover bid in December.
Sky Media doubled its share of the TV ad market in the UK to about 26% between 2006 and 2016, after swallowing up sales for Channel 5 and the Virgin channels, but the good times could be over. Sky’s ad revenues in the six months after the Brexit vote fell 2% in the UK, its biggest market.
By contrast, Italy was up 14% and Germany 29%. No wonder Griffith says he is keen to attract more chief marketing officers from across Europe to advertise both nationally and on a pan-European basis. He dismisses suggestions that it has been hard to gain traction since Sky Media opened an international sales house in Munich in 2015 but concedes most ad money is still held on a country basis and there is "a high degree of rigidity in marketing budgets".
Sky has always had an "outsider" mentality as it challenged the TV and broadband establishment, and that extends to Griffith’s view of the ad industry.
"When I looked at advertising in 2012," Griffith says, "it looked to me like the City before the ‘Big Bang’" – the watershed in 1986 when stockmarket trading was deregulated.
"The budget allocation was not transparent, it was opaque. It was still [like] the old days of stripey blazers and who you know, rather than what you know."
Griffith, tieless in a blue suit, sees Sky Media differently. It is all about advanced analytics, smart audience targeting and working directly with advertisers rather than just agencies to create "actionable data", he says, adding that Sky itself is one of the UK’s biggest advertisers on TV.
One statistic Griffith is particularly fond of is AdSmart’s repeat client return rate of 66%. More than 1,000 brands, from McLaren to Dean’s Taxis in Newcastle, have run 6,700 campaigns since AdSmart launched three years ago, attracting new advertisers to TV.
"That tells me it works. It’s not part of some backward-looking share deal," he says, referring to how agencies trade. "It’s a discretionary buy – a decision generally made directly by the client."
Addressable advertising
Griffith, who is also a non-executive director of Just Eat, says owning data and going "direct to the consumer" is essential for brands. "The businesses that are winning are those that are closest to and know the most about their customers," he argues.
He sees addressable TV advertising as a counter to Facebook and Google: "My big thesis is: this is about combining the power of digital and data with the quality of TV. If I have one frustration, it’s that we, as TV, not we as Sky, have still not done a good enough job to impress on people the quality and the transparency of the product that we offer versus organisations that are very good at selling but are not delivering the quality and transparency that clients need and deserve.
"Millions of pounds of client money are being squandered on buying one second of advertising as I scroll through YouTube videos – versus a high-quality ad on primetime TV.
We, as TV, have not done a good enough job to impress on people the quality of the product we offer.
"There is a world of difference [between the two], and I don’t think the market is fully reflecting that. We can’t sit there and moan about Facebook and Google. It’s up to us to build relationships with clients, not just agencies."
But hasn’t Thinkbox, TV’s trade body, made progress in challenging YouTube’s wilder assertions? Yes, but "it’s also up to me and David [Abraham of Channel 4] and Adam [Crozier of ITV]. We can’t just leave it to Thinkbox," he says.
Bracketing himself with two chief executives shows how he views himself. All this talk of working together doesn’t sit easily with Sky’s reputation for hard bargaining. Viacom’s Channel 5 finally joined AdSmart last month but ITV and Channel 4 have not agreed terms. A deal for Virgin Media to allow AdSmart technology on to its rival platform has yet to happen.
"What it requires is leadership," Griffith says. If other broadcasters are wary of Sky, it’s because it has more than 11 million pay-TV homes in the UK and the power to decide where channels appear on the electronic programme guide.
Some industry observers wonder how much Sky’s strong position over carriage deals helps Sky Media to win ad sales contracts. When Viacom gave Channel 5’s ad sales to Sky in 2015, it was part of a bigger agreement that included carriage for the owner of MTV.
Channel 5 went on to enjoy a doubledigit rise in turnover in the first year of its Sky Media deal, while Sky’s own retained ad revenues increased only 3% in the UK over a similar period. "Channel 5 had a good year," Griffith says, but he maintains "we don’t link" carriage and ad sales.
Discovery agreed an ad sales deal last autumn but renegotiated carriage terms separately in January, he points out.
Tough approach
The carriage talks were tough as Discovery accused Sky of abusing its dominance by paying less, even though ratings had risen since 2010, and threatened to pull its channels on 31 January – a tactic that worked as it prompted an outcry on social media.
Discovery won what it claimed was a "meaningfully better" deal, although Sky insisted it didn’t back down.
In the heat of the dispute, Griffith was livid and questioned the motives of Discovery’s leading shareholder, John Malone, just as its rival, Fox, seeks regulatory approval for the Sky bid.
But Griffith is now emollient, insisting that Sky had "just got to do the right job for our customers" by not overpaying for Discovery’s channels.
That tough approach to costs must also have played a part in Sky Media’s relocation last year from central London to Sky’s vast Osterley campus – a move that was said to have sapped morale.
Griffith says it was about bringing ad sales close to the rest of the business, not saving money, and little expense has been spared on Sky Central, a new state-of-the-art building that would not look out of place in Silicon Valley.
Griffith, whose father was the marketing director of an IT company, grew up in south London. The eldest of three brothers, he went to a local state school before studying law at Nottingham. Colleagues say he has "an absolute mastery of the detail" and "a similar right-wing economic view as James Murdoch".
He has earned £22.8m in just the past four years and doesn’t rule out politics again one day. "It’s a truism that many of the biggest questions in society can only be solved by government and in government," he says.
Griffith must be on the shortlist to be the next chief executive, along with Sky UK boss Stephen van Rooyen, and he has fans in the City. Lorna Tilbian, head of media at Numis Securities, recalls his early days doing investor relations for Sky. His counterparts were David Cameron at Carlton TV and John Fallon at Pearson – both of whom have seen their fortunes slump in the past year.
"I’d argue he’s been the most successful of the three and delivered a premium for shareholders," she says, referring to Fox’s £11.7bn bid for Sky at a 36% premium.
And if Griffith has his eye on a bigger job at Sky or elsewhere, such as ITV, it is investors, notably the Murdochs, rather than advertisers that will decide.
The lowdown
Lives: Putney
Family: Married with a teenage son and daughter, and a Labrador
Favourite TV shows: House of Lies (Sky Atlantic), A League of Their Own: US Road Trip (Sky One), Daily Politics (BBC Two) and 8 Out of 10 Cats Does Countdown (Channel 4)
Favourite ad: Volkswagen "The force"
Interests: Travel and outdoor activities, time with the family
One thing you don’t know about me... I was one of the first owners of a Tesla in the UK