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How to turn £8 million into £120 million
Saturday 17 January 2015 13:06:14 by Andrew Ferguson

The Government sanctioned adverts for superfast broadband appear to often have a negative reaction on social media, but then that is not uncommon for any topic, but due to a written question by Chi Onwurah MP for Newcastle upon Tyne Central we now know how much the TV adverts and other advertisements are costing; which is some £8 million.

"Based on DCMS insight and research the Government concluded that an advertising campaign would promote a greater take up of superfast broadband. For the areas to be covered by the Government's phase 1 Superfast Broadband Programme, we estimate that up to a further £120m will be generated for investment in further coverage for every 10 percentage point increase on the programme's 20% take-up baseline. The quicker people take up services in the areas delivered with public funding, the quicker funding is returned for reinvestment by the supplier; we therefore launched an £8 million national marketing campaign to raise awareness.

The budget for the campaign was based on evidence of previous government campaigns to reach the optimum amount of our target audience. The campaign was coordinated with suppliers and both BT and Virgin Media have linked their advertising to it."

Answer by Mr Edward Vaizey MP, Secretary of State for Culture, Media and Sport

£8 million seems a lot of money, it could be used to build cabinets serving over 30,000 homes and businesses or FTTP for 8,000 buildings, but in the scale of the superfast broadband roll-out it is a small amount. Every week now around 40,000 premises gain the ability to order FTTC (generally 300-400 FTTP), so if the £8 million increases take-up it could quickly pay itself back.

The way that spending £5,000 (daytime) to £59,000 (peak viewing) on 30 seconds of TV advertising can help the project is that the various BDUK projects have a clawback mechanism whereby BT has to pay back some of the gap funding if take-up breaks through a certain level (usually 20%) for a particular cabinet. Most projects seem to be planning to re-invest this money into extending their footprint further.

While fibre based broadband tends to carry a price premium the number of vouchers, half price deals and cashback means that many people can upgrade to FTTC and still be paying the same or less than they would have paid for a 0.5 Mbps ADSL service in 2002 even after all the offer periods expire.

The Government led superfast broadband roll-out is not perfect, but it never had the goal of getting superfast to 100%, it is likely to eventually reach that goal, but in a series of controlled steps that are reducing the risk to the public purse. The DCMS has already said that superfast broadband coverage reaches around 80% of the UK, and since then we believe the coverage has grown to around 81%-82%. The widespread use of FTTC means there is a higher level of coverage of fibre based broadband if you remove the superfast speed filter, and we estimate that nationally fibre based broadband coverage is around 85% to 86%.

Of course the increasing coverage is no comfort to those without access at this time, but then any project delivering physical infrastructure that is not just a simple flick of a switch takes time to roll-out. We believe everyone would agree that a pure FTTP roll-out would be wonderful, but given the budget constraints from the public purse and timescales involved it was impossible.

Comments

Posted by Michael_Chare about 1 year ago
What I would really like to know is what the takeup rate is on cabinets funded by BDUK. As someone who would not get better broadband from BDUK funding (in its present form) but hopefully will get faster broadband from a commercial project I do wonder whether BDUK project is just a way of subsidising and inefficient BT.
Posted by cyberdoyle about 1 year ago
If the product was any good it wouldn't need advertising, it would sell itself.
Posted by ronandbreda about 1 year ago
Most of the higher speed goes to areas that already had a good speed. As usual the rural communities are told that at the moment they will not be able to have any sort of fibre connection
Posted by mdar5 about 1 year ago
1. I'm sure virgin, Hyperoptic, Gigaclear, City Fibre, KC and the rest would also be most interested in the takeup rate on each cabinet - so you won't be getting it....anymore than the takeup rates for ADSL are available.
To pinch a reply from Kitz forum where this same question was asked
"cabinet takeup rates will be commercially confidential market sensitive information"
Posted by mdar5 about 1 year ago
2. As for advertising - well what do you expect, BDUK to install it and not tell anyone?
Families with busy lives really do not obsess about broadband you know? They really do not follow the progress of their local cabs' installation.

As to the claim that good products sell themselves - yeah right.
Why does Gigaclear then require so much local advertising, leafleting, open days, Q&A sessions, websites, articles in local rags, doorstep visits - all in an attempt to get just 30% of residents to commit to them if FTTP is so good then? The other 70% even after this clearly don't give a monkey's.
Posted by gerarda about 1 year ago
The advertising would be better targeted at those in the BDUK areas that have already been upgraded. At the moment 2/3 of it is a subsidy for operators in BTs commercial area and 3/4 of the rest is wasted as FTTC is not available to those areas.
Posted by Blackmamba about 1 year ago
Hi Broadband Watcher.
All the advertising that is required is at local leval fanning out from the County Councils network this has been done in Surrey down to the parish leval running at a four day lead time with take up over the 20%.
Posted by Blackmamba about 1 year ago
Hi Broadband Watchers.
If the customers on a post code that are unable to receive 15 Meg down BT takes the cost in their %s on the clawback money that is in Surrey,s contract.
Posted by WWWombat about 1 year ago
@cd
Like B4RN doesn't do any advertising?

The success of B4RN in a parish means drumming up enough investment, connections, subscribers & volunteer workforce. It too has a need to market itself.

No TV or radio, of course, but B4RN's success depends on community engagement. Visiting parish halls, having community meetings, doing presentations is a big part of that; sending volunteers out to canvas neighbourhoods; publishing via parish newsletters too.

Two projects, two very different scales, two solutions, but one identical sales & marketing aim: increase awareness & take up.
Posted by WWWombat about 1 year ago
@gerarda
We've seen exactly that targeting like locally.

At first, the SFNY team runs social media, and visits to the areas where cabs have recently gone live.

As coverage expands, they've gradually swapped their presence to larger gatherings, agricultural shows etc.

Further on, we've started to get radio advertising.

It isn't a surprise that, as the rollout escalates nationally, a nationwide campaign becomes worthwhile.
Posted by GMAN99 about 1 year ago
B4RN don't advertise

http://www.b4ys.org.uk/next-weekend-b4rn-demo-day-sunday-18th/

You can always count on Chris to post some nonsense and then have a number of logical replies to counter the nonsense.
Posted by Blackmamba about 1 year ago
Hi Broadband Watchers.
In Surrey the BD UK Cabs were targeted by Post Code after the CAB was open this advertised the BT commercial Cabs by default this was then repeated after a delay on Surrey Webpage this was done 24/7 by the staff.
Posted by mervl about 1 year ago
Government and their advertising chums have always engaged in mutual back-scratching. The old "if you tell people something often enough they'll believe it". Won't they?
Posted by WWWombat about 1 year ago
@gman

That's one of the groups I was thinking about.

Another is from Hornby village...
http://www.hornbyvillage.org.uk/b4rn
and
http://tinyletter.com/B4RN-Hornby/letters/update

As those updates remind you... it is a lot of hard work & time spent in engaging the community sufficiently well.

B4RN is a great project, and a good example for those who can make use of similar advantages. I have no idea why @cd feels the need to regularly post inflammatory drivel when she could post considerably more useful stuff.
Posted by GMAN99 about 1 year ago
Indeed, its also unprofessional she represents a service provider after all.
Posted by WWWombat about 1 year ago
Just checked back on the last progress report from SFNY in November.

There, they reported intervention area take up to average 20%, but 25% on cabinets that have stood for at least 15 months. They project reaching 30% in March.

On topic here is the fact they were working with central BDUK on ways to achieve 50% take up. I guess this is part of that scheme which means they might be targeting claw back of £360m!
Posted by gerarda about 1 year ago
@wwwombat

I cannot see the point of advertising this in non-BDUK areas unless BT and the other ISPs pay for it.
Posted by Blackmamba about 1 year ago
Hi Broadband Watchers
B4RN does not require advertising they have Walter he is the driving force he helps to get the % up in Surrey on all CABs.
Posted by Michael_Chare about 1 year ago
I would think that all the ADSL deployments are commercially funded and therefore take up rates might remain confidential. The BDUK projects are partly tax payer funded. So we tax payers should be told how the community has benefited from the expenditure.
Posted by WWWombat about 1 year ago
@gerarda
Which TV broadcast area doesn't have a BDUK area within it? I can't think of one.

That TV ads also happen to be broadcast to non-BDUK areas is neither here nor there.
Posted by WWWombat about 1 year ago
@Chare
You are told how the community, in total, has benefited. Recent articles show the takeup in each county.
Posted by ValueforMoney about 1 year ago
So 10% points take up above 20% provide £120 or 10% of the phase 1 budget of £1.2bn.
Maximum clawback on 100% take up is 80%! State contibution i thus a minimum of 20%!
Clawback should be less if the actuals are less than milestone payments.
If cab has only 1 44 port card and 1x100 tie cables, does the clawback kick in when this capacity is filled? Or does BT hold on to the premium so it can buy the extra cards?
Posted by Blackmamba about 1 year ago
Hi Value.
In the Hindhead Exchange Area 4 Cabs (state contibution)have been provided with 2 cards in each with a 100 tie these Cabs are on the fringe of the area so the clawback is adjusted on each Q1 as the customers are provided if the post code can not surport 15 meg down BT pays. Surrey pays for the ones over 15 meg down on each CAB.
Posted by Michael_Chare about 1 year ago
The link to the county take up rate data is shown on this page (shared spreadsheet).

https://www.gov.uk/government/publications/state-aid-advice

The take up rates look low.

It is not clear whether the take up rate is for lines where faster broadband has been made available or for all lines covered by each counties project.
Posted by andrew (Favicon staff member) about 1 year ago
You need to factor in how long after a project has started adding cabinets to an area, before writing off the take-up as low.

ADSL was available to 80% of the UK in 2003, but took years to reach take-up level, and as there is a price premium many will put up with slower speeds, but the money is not wasted since in a year or two, a new property owner will have the option, or existing person will upgrade.
Posted by ValueforMoney about 1 year ago
@Blackmamba So is clawback kick in after 20% of 88 ports? Probably not, as the milestone payment is for all premises.
Are you paying a county price of c£8k, or a national price of c£5k for cabinet?
Posted by Blackmamba about 1 year ago
Hi Value.
As all 4 cabs have differant premises on there distribution each Cab is costed individually as many customers cross into Hants from Surrey and their post code are not receiving 15 meg down this gives cross border payments.
The Cab 12 is the problem because the take up is Aprox 97 from 135 premises but there are many just under the 15 meg.I am trying to get fibre to two location and this would give 100 % coverage plus future proofing at a low price. The other Cabs get in the 15 meg target so hope to get there clawback money.
Posted by gerarda about 1 year ago
@wwwombat That is exactly why TV advertising is a waste of public money for this campaign. There are far better ways of targeting it to the audience.
Posted by WWWombat about 1 year ago
Such as?
Posted by gerarda about 1 year ago
mailshots, local newspapers, local PR, etc.etc
Posted by Michael_Chare about 1 year ago
A few days ago there was a double page advert in the Daily Telegraph. I did wonder about the wisdom of spending my taxes this way, but after seeing the take up rates I can understand why the money was spent.
Posted by JNeuhoff about 1 year ago
@GMAN99 (aka FibreFred):

"You can always count on Chris to post some nonsense and then have a number of logical replies to counter the nonsense. "

And readers can always count on you to praise your beloved copper VDSL, even while you yourself are being ripped off by BT.
Posted by WWWombat about 1 year ago
@gerarda
As explained, that's how they start, when they can focus activities on small locations precisely where cabinets are being activated. Once the rollout in a county gains traction, that's hard to sustain, so they must swap to methods with a wider audience. Here, that was agricultural shows and adverts on various local radio stations.

But when the scheme has gained traction almost everywhere in the nation, it becomes viable - and worthwhile - to start national campaigns.

When the teams in a county are 2, 3 or 4 people, only so much can be achieved by working on tiny local campaigns.
Posted by cyberdoyle about 1 year ago
Only just seen the comments here, so will respond. We don't spend money advertising, we use newsletters (free) to try to keep everyone informed. We have our social media sites, also free. We hold demo days for other communities to try it out and learn stuff from the teams who have done it for their villages. We don't waste millions on tv advertising, and we don't miss sell our product. If we were doing FTTC we would not call it 'fibre broadband'.
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