Unilever signs £200 million deal with ITV

Broadcaster ITV announced today that Unilever has signed a four-year deal to buy £200 million of airtime across its channels running to the end of 2009.

The news came as ITV said total advertising revenue was likely to be 10% down in the first quarter due to strong comparisons with a year earlier and the fact that Easter and the World Cup fall in the second quarter.

ITV, which was formed by the merger of Carlton and Granada in 2004, has been battling to retain viewers and its share of the advertising spending pot as digital channels mushroom and the nation prepares for the analogue signal to be switched off. Profits rose 42% to £460 million, despite the decline in advertising revenues at ITV1.

The deal with Unilever, which owns Dove, Lynx and Flora, is predominantly for "spot" advertising breaks on ITV channels 1 to 4 and Men & Motors.

The group, which produces Coronation Street and I'm a Celebrity...Get Me Out Of Here!, said revenues climbed 6% to £2.18 billion, while pre-tax profits rose 36% to £452 million

Although advertising revenues at its flagship channel fell £50 million in 2005 to £1.46 billion, this was offset with the growth at digital channels ITV2 and ITV3 which pushed total ad revenues up 2.7%.

ITV said revenues at its Friends Reunited website, which ITV acquired in December, were up 75% in January compared with a year ago.

The group also announced today the launch of ITV Play, a new "participation TV" digital channel, which will broadcast from April 19 on Freeview and overnight on ITV1 and ITV2 from March 31.

This follows the success of existing call-TV formats Quizmania and Play Sudoko, broadcast on ITV1 and ITV2 overnight in the last three months.

Charles Allen, chief executive of ITV, said: "ITV has had another very successful year with strong profit growth helping us to double our profits in the last two years."

He added: "We have transformed ITV from an analogue, single channel federation to a multi-channel, multi-platform, content-driven business firmly focused on the needs of viewers and advertisers."

Commenting on today's deal, Nigel Cowlin, Unilever's head of media and communication in the UK and Ireland, said: "ITV is unique in its ability to deliver mass audiences in an increasingly fragmented market.

"Advertising on ITV enables us to concentrate our resources behind our focused portfolio of leading brands using the power of television.

"Television will continue to have a vital role to play in the 360 degree plans for our brands."

Unilever was the UK's largest advertiser last year.