Channel 4, the UK PSB, is facing a costly TV advertising blackout from key corporate names in a dispute over the cost of purchasing commercials airtime across its channel portfolio.
According to a Guardian report, the stand-off could result in the withdrawal of major advertisers including Ariel and Pampers-maker Procter & Gamble, GlaxoSmithKline, Samsung, Reckitt Benckiser and Asda from January 1st if a deal is not reached.
The advertisers are clients of the UK media-buying arm of Publicis Groupe, the world’s third-largest marketing services company, which spends over £200 million a year on Channel 4 in deals struck on behalf of its clients.
Talks between Channel 4 and Publicis Media over a new advertising deal for next year have stalled over the issue of TV ad price rises despite a decline in the broadcaster’s audiences. Any delay in reaching a deal will cost Channel 4 millions of pounds every week in lost revenue. Channel 4 also sells ad space for BT Sport and UKTV’s channels, which means the broadcaster will effectively have to compensate its partners for their loss of revenue too.
Jonathan Allan, chief commercial officer at Channel 4, has taken the step of writing directly to Publicis Media clients as it faces a significant hole in the ad revenues the commercially funded broadcaster relies upon.
“As I write, it looks very much like we may not reach an agency agreement with Publicis Media,” said Allan in the letter. “This means we will not be able to offer you the opportunity to advertise across our portfolio of 26 linear channels and three video-on-demand platforms from the start of next year.”
While a late deal could still be reached, both sides are said to be strongly opposed to budging on their stance.