P&G dumps five in dispute over discounts

Procter & Gamble has pulled its advertising from five, leaving the broadcaster facing a potential £27 million hole in its revenue.

The FMCG giant withdrew its advertising after failing to agree terms for its 2005 deal. P&G is one of five's biggest advertisers, responsible for providing 10 per cent of its advertising revenue, and it is thought that the dispute centres on the level of share and corresponding discount that P&G wanted to get from five. Negotiations between P&G, its agency Starcom Motive and five, are still in progress.

Bernard Balderston, the associate director of media at the advertiser, said: "It is factually correct that we are not advertising on five at the moment, but I'm not going to discuss it further."

A five insider played down the negotiation stalemate, saying P&G and five had been in a similar position before.

According to Nielsen Media Research, P&G spent a total of £190 million on its above-the-line advertising last year, supporting brands including Ariel, Pampers and Pringles. Historically, the advertiser has been a big supporter of five, attracted by its ability to supply cheap frequency and act as a cost-reducer to the other TV channels.

Separately, broadcast directors are predicting TV airtime inflation will continue during the year. January and February have been affected, with increased spending driving inflation. This trend is expected to last throughout 2005.