Unilever battles to make £84m of media savings

Unilever's goal of saving 120m euros (£84m) in annual media costs has been dimissed as unachievable by UK media agencies and TV owners.

The company is to consolidate its 1bn euro (£700m) pan-European media account into MindShare in a decision that has centred on cost savings throughout the six-month review process.

Unilever has said advertising budgets will increase from 2005, and trading experts claim it will be very difficult for cuts to be achieved by media negotiation and the streamlining of Unilever's in-house media management.

Unilever's £206m media spend in the UK accounts for about 30% of its European total, and the scope for achieving savings in the UK is limited.

It is currently locked into the last year of a four-year deal with ITV.

Initiative, which is under contract until mid-2005, will feel little pressure to save any more money, having been axed in favour of MindShare last week.

The pressure, therefore, is on next year's TV trading season for 2006, which promises to be the 'mother of all bloody battles', according to one TV executive. MindShare will negotiate hard, but agencies believe that, under CRR rules, ITV has little flexibility to offer Unilever better terms, which are already regarded as some of the least profitable in the TV business.

Unilever declined to comment on the projected cuts.

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