J Walter Thompson and ITV sales house Laser Sales are in serious dispute over a 1995 airtime deal for Kellogg on Yorkshire Tyne Tees and Granada Television.
Laser has handled airtime sales for LWT, YTTV, Granada and Border since last September.
The agency is under pressure to complete the deal as the Granada region is home to Kellogg’s headquarters and factories.
The dispute centres on two points: Kellogg’s decision to leave YTTV off its media schedule and Laser’s demand for significantly increased airtime rates.
An agency insider says the two sides are “a long, long way away from coming to a deal”.
Laser wants 20 to 30 per cent more money from Kellogg for its airtime this year, sources claim.
Kellogg’s 1994 airtime deal with Granada was expected to roll over into 1995. However, it is now understood this has been cancelled because of the YTTV dispute.
So far this year, JWT has doubled Kellogg’s average ratings using Channel 4’s Northern macro (equivalent to Granada and YTTV) to make up for the lack of ITV airtime in those regions.
The only Kellogg airtime on YTTV has been tied into Frosties’ sponsorship of Gladiators which was negotiated with the ITV Network Centre.
Kellogg spends about £60m annually on TV. The Laser deal could be worth £10m to £15m.
JWT is understood to be making use of casualty planning – leaving certain regions off the schedule to negotiate a better deal. But the agency is no longer able to play Granada off against YTTV as both are now handled by Laser.
Kellogg is Laser’s last major advertiser to strike a deal for 1995. Procter & Gamble and Mars completed negotiations in January and February.
Both Laser and JWT declined to comment.