27/05/2002

Unilever sign biggest-ever airtime advertising deal

Carlton Communications and Granada have won the largest-ever airtime television advertising contract with Britain's biggest advertiser Unilever to the tune of £320 million over four-years.

The four-year deal marks forms part of Unilever’s 'Path to Growth' strategy, which is designed to concentrate company resources behind its focused portfolio of leading brands through television advertising.

Chris Pomfret, Chairman of Unilever’s UK Marketing Executive Committee, said: “ITV’s unique ability to deliver mass audiences makes the broadcaster a vital component for Unilever in its drive to promote its household name brands to a large audience swiftly and effectively.”

The details of the deal have yet to be released but in the current advertising climate advertisers are moving toward long-term deals which can see discounts of up to 25%. The move cements Carlton and Granada's position as the top advertiser in television, as between them they claim more than 50% of all television advertising revenue.

The deal will be of welcome news to Granada and Carlton who have had to endure a mass of adverse publicity in the wake of the ITV Digital insolvency. City analysts had been expecting poor figures when the annual results are released later this week, but the Unilever announcement will give some comfort to shareholders.

The deal was negotiated for Unilever by its UK Media Manager, Edwin Sharpe, with Ilker Shakir, Broadcast Director at Initiative Media (Unilever’s UK Media Agency), Steve Platt at Carlton Sales and Graham Duff at Granada Media Sales.

Edwin Sharpe added: “Our consolidated portfolio of leading brands needs the drive and strength of television as the primary channel to achieve its communication objectives. As ITV will continue to be the major provider of commercial ‘impacts’ for some years to come, particularly given its dominance in prime time, there is a natural fit to this long-term arrangement.”

Granada and Carlton had been the subject of the media rumour mill after the draft Communications Bill made a merger deal more likely. A merger had been mooted in February, however, the problems associated with ITV Digital had seen the share prices of Granada and Carlton dip and talks were abandoned.

Should the bill become law, the ban on a single company owning ITV will open the way for a merger deal. However, the lifting of the ban also applies to foreign ownership and media giants like Rupert Murdoch, AOL Time Warner and Bertelsman could pounce for ITV companies.

A merger, with its associated cost reductions, and the revenues boost announced today will give some heart to shareholders who watched Carlton and Granada pour around £1 billion into their failed digital pay-TV venture.

Charles Allen, Granada's chief executive, has said that ITV under single ownership could streamline its operation and create savings of up to £50 million a year.

(GMcG)

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