Publicis and Channel 4 end trading dispute

Agency group will start spending again in February with broadcaster.

Asda: a Publicis Media client
Asda: a Publicis Media client

Publicis Media and Channel 4 have agreed a new advertising sales deal, ending a trading dispute that has seen the agency group pull its ads from the broadcaster since the start of January.

Agencies including Zenith, Starcom, Blue 449 and Spark Foundry will start spending again with Channel 4’s sales house, which includes UKTV and BT Sport, at the start of February. 

Publicis Media had already "redistributed" clients’ money that it would have expected to spend with Channel 4 this month by investing with other media owners, chiefly ITV and Sky.

An estimated £125m, or about 10% of Channel 4’s annual revenue, was at stake in the row as Publicis Media pulled the money from all of its clients with the exception of Procter & Gamble, which has its own deal with the state-owned commercial broadcaster.

Talks between Publicis Media and Channel 4 about a new deal collapsed in the run-up to Christmas and it is thought that meaningful dialogue only restarted last week.

Jon Horrocks, managing director of investment at Publicis Media Exchange, and Ed Chalmers, head of trading at Channel 4, led the negotiations, although more senior figures from both sides were involved on the sidelines.

Spokesmen for Publicis Media and Channel 4 declined to comment on the terms of the new deal, although both companies signalled it was a "satisfactory" outcome.

One person familiar with the negotiations said: "It’s a deal we both wanted to do."

Industry sources suggested the row was "more about the trading mechanic rather than pricing".

Publicis Media wanted Channel 4 to move to a largely "volume-based" deal, which would give the agency group a discount based on volume of spend.

Meanwhile, Channel 4 was said to be keen to keep a "share-based" element for both linear broadcast TV and video-on-demand, which would continue to link any discount to Publicis Media’s spend with Channel 4 relative to its spend with the other TV sales houses, ITV and Sky.

Channel 4 has concerns that Publicis Media has been reducing its investment in TV and a volume-based deal might encourage that, with no guarantees on spend.

It is thought that Publicis Media’s clients had been largely supportive of the agency group’s stance in the dispute, particularly since Channel 4's audiences have been in decline.

The broadcaster will be relieved to have ended the row because of gloomy predictions for the TV market in March amid suggestions that the industry is facing a double-digit decline in revenue due to a double whammy of Brexit jitters and a late Easter.

Channel 4, whose most popular programmes include Gogglebox and The Great British Bake Off, has about 27% of the TV ad sales market, with Sky holding a similar proportion and ITV with about 45%.

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