Unilever and ITV agree £320m four-year deal

Unilever has signed a £320 million four-year airtime deal with ITV, which it claims is the largest of its kind.

Although the agreement has surprised some quarters, given its length and the steady decline of ITV's audiences, it comes with caveats and incentives for ITV to deliver on audience.

Historically, Unilever's ITV deals have been for three-year periods, but in recent times these have been rolled over on an annual basis.

The agreement is mutually beneficial; for ITV it marks a welcome demonstration of improved confidence from advertisers in the television medium, which has suffered during the recession, while Unilever can benefit from future fixed airtime prices.

The news is welcome for Carlton and Granada, which are both presenting half-yearly reports to the City this week. Both companies have had a wretched time in the torpid advertising market, culminating in the closure of ITV Digital, which had haemorrhaged £1 billion.

The ITV deal mirrors those made with JCDecaux and AOL Time Warner earlier this year and marks another step on Unilever's "path to growth" strategy of concentrating on top brands and using the most powerful media.

Initiative Media negotiated the deal on behalf of Unilever. The Initiative chief executive, Jerry Hill, said: "Unilever has rationalised its brand portfolio as part of its 'path to growth' strategy and continues to invest heavily behind these leading brands on television. ITV will continue to attract significant audiences and this deal provides every incentive for ITV to invest with confidence in its product and to deliver the highest number of viewers possible."

ITV has announced that it will be increasing its programming budget by £25 million this autumn in a bid to stem its declining audience and attract more upmarket viewers. Granada Enterprises' chief executive, Graham Duff, added that the deal was a "vote of confidence in the ITV network".