NEWS: Fmcg spending crisis looms for TV sales houses

One of the UK’s largest fmcg advertisers is poised to renege on its volume expenditure commitments to the ITV sales houses in the latest twist to the current TV trading furore.

One of the UK’s largest fmcg advertisers is poised to renege on its

volume expenditure commitments to the ITV sales houses in the latest

twist to the current TV trading furore.



The advertiser is understood to have pledged a level of spend - spread

over a number of years - to each of the ITV sales houses, which it is

now not able to meet.



The sales houses are said to be examining the terms of their deals with

the advertiser and are concerned that the shortfall will run into

significant sums in 1997.



The report comes amid a downward trend in TV spending by many of the

major fmcg advertisers, who are traditionally the staples of TV

companies’ revenue.



Procter and Gamble’s spend has been down since the beginning of the

year, when the advertiser pulled most of its advertising from Carlton

Television.



Total spend for P&G across the year looks set to decline by up to 30 per

cent, with figures for the 12 months to September down more than 20 per

cent year on year.



P&G is rumoured to be having difficulties with meeting its deals with

one of the TV sales houses. This has been denied.



Similarly, Mars’s TV spend is understood to be down by around 10 per

cent year on year, while Lever Brothers’ spend is said to have fallen by

a similar amount. Kellogg’s is also believed to be cutting back its

spend from next year.



Many major fmcg clients are pumping more money into below-the-line

activities, such as price promotions and retailer incentives. TV

companies are now keen to find additional ways to capitalise on

increased budgets from growth sectors such as telecoms and financial

services.



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