Unilever’s direct deal with media

Unilever’s tie-up with AOL Time Warner means it has access to media beyond advertising. What implications do such deals have?

It had to happen. What claims to be the world’s largest advertiser, Unilever, has got in to bed with the world’s biggest media owner, AOL Time Warner. The two announced a multi-million dollar, cross-platform advertising and marketing partnership last week.

Unilever’s products will have the use of America Online interactive brands, Turner Broadcasting System properties – including TBS, TNT and the WB Television Network – and Time Inc print titles, to reach consumers with various cross-platform marketing programmes.

The agreement extends beyond an advertising deal and comprises four key elements: cross-platform consumer advertising programmes; developing consumer relationship marketing campaigns using AOL Time Warner’s custom publishing capabilities; information sharing on emerging technology and media platforms; and the establishment of a multi-disciplinary team to drive business growth across all platforms.

The three-year deal is the progression of an online alliance struck between the consumer goods giant and America Online and Microsoft in 1998, giving Unilever access to their respective databases.

Unilever and AOL Time Warner have developed programmes for Snuggle, Dove and Unilever Bestfoods’ multi-brand initiative for Hunger Free America – an organisation dedicated to raising awareness about the implications of child hunger in the US – using the brands Ragu, Lipton and Hellmann’s.

Unilever is also looking at producing contract magazines for its various “super-brands”. In the US, AOL Time Warner already has the customer publishing contract for Unilever and IPC would be more than capable of fulfilling that role in the UK.

It’s not the first time a major advertiser and media owner have struck a cross-platform advertising deal. Procter & Gamble teamed up with Viacom – owner of MTV and CBS – last June, in a $300m (&£206.7m) one-year marketing partnership.

But Unilever worldwide head of media Alan Rutherford, the man behind the agreement with AOL Time Warner, claims that this deal, negotiated with the help of MindShare in the US, is far more extensive than that of P&G’s with only 25 per cent of it comprising pure media buying.

He says: “It’s not just media in the traditional sense, it goes beyond that in a multi-platform arena. It [AOL Time Warner] also owns films and music and has to go into new markets.”

Roy Jeans, Initiative’s managing director of Unilever’s UK and Europe account, claims there are “more opportunities for very, very senior people to talk to each other about deals” on the back of consolidation among media owners (AOL and Time Warner); media agencies (Western and Initiative, and CIA and the Media Edge) and advertisers (Unilever and Bestfoods).

But Jeans adds it is unlikely that media owners will give large discounts in key markets to secure a little extra spend in others, and that deals similar to that made between Unilever and AOL Time Warner are more to do with market access through planning opportunities and data. He says these types of deals do not threaten to cut out media agencies, as they inevitably have a role to play in evaluating them and making sure they meet clients’ budget expectations before they are signed.

In the UK , EMAP claims to have pioneered cross-media deals. EMAP Advertising group account director David Hipkiss says: “We see this as a growing trend within the industry and welcome initiatives like the Unilever and AOL Time Warner deal. Others will surely follow suit.

“At EMAP we have a dedicated media-neutral staff and so it becomes easier for a media owner like us to offer a one-stop shop for advertisers.”

Numis Securities media analyst Paul Richards is not convinced that there will be a flood of similar deals, although he believes that some large advertisers will look at following in the footsteps of Unilever and P&G.

He says: “I think it is a case of wait and see. If you go back a year or so, EMAP made a great play for multi-media packages across radio, magazines and the Internet. It hasn’t really taken off in a great way, but you can see why clients want to try these new ideas.”

Gillette European media director Michael Winkler does not think that multi-media cross-market deals will become “the next big thing” as there are few media owners that can offer all forms of media, in particular television and print, in countries relevant to the advertiser. “It is really cross-promotion that appears to have driven this deal,” he says.

Viacom managing director Paul Curtis agrees: “These deals are about having access to the market within individual brands that the larger media owners have, they are not just about getting good media value.”

And some brands are better than others, argues Curtis: “Most of the media owners own products rather than brands, the exception being MTV and Channel 4 in the UK.”

In a digital age with hundreds of different TV channels and new forms of media, it is imperative for media owners to develop strong brands that advertisers can also tap into, says Curtis.

That also means developing events around the brands, such as concerts and talent contests, which have traditionally failed to attract large amounts of sponsorship cash. But as time goes on and media proliferation gathers pace, Curtis argues, advertisers will be prepared to look for different solutions that give direct access to markets associated with a particular media brand.

Although consolidation paves the way for more cross-platform deals, their nature will depend on the advertiser’s motives – whether that means securing better value on price or trying to secure a competitive advantage by accessing particular markets.

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