P&G broadens deal with Viacom Plus

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Procter & Gamble Co. is expanding its groundbreaking cross-platform deal with Viacom Plus, increasing spending to more than $350 million from last year's $300 million and spreading the buy over 14 Viacom divisions.

The goal for year two is to expand to new cable channels and broaden development of integrated and ethnic marketing programs, said Greg Ross, P&G director of North America media and marketing. Bcom3 Group's MediaVest USA, New York, helped craft both the new and original deals.

P&G's first Viacom deal, announced last year, was the first nine-digit cross-platform pact, spanning numerous Viacom network, cable and syndication properties. A growing number of such deals, such as Unilever's $100 million pact with AOL Time Warner in January, extended the bounds further into print, online and global buys and even joint product development. This year, P&G is adding Nick Jr., MTV Espanol, CBS.com and MTV.com to the Viacom mix, product placements and a larger retail component.

"From both sides it is a larger deal than what we could have done individually [unit by unit]," Mr. Ross said. He said P&G also gets a better overall price than it would negotiating with the Viacom properties independently, but added: "It's not just an efficiencies piece. It's a total deal."

"Last year it was a more challenging market," said Lisa McCarthy, senior VP-Viacom Plus. "But for this year why would we do a deal about rates? We didn't charge them a premium. We just gave them the market rate."

Mr. Ross said P&G is looking to do more and bigger integrated programs with Viacom this time and for the first time extend those programs to in-store promotions with P&G retail customers.

One of last year's bigger integrated efforts was adding interactive and online media elements to the "People's Choice Awards" program, plus some other programs he termed "smaller events, smaller ideas." He added "Our concept this year is to make them larger."

"They wanted two or three marketing programs for their retailers-big home-run marketing programs," said Ms. McCarthy. "That is a real hot-button this year."

P&G and Viacom wouldn't comment on the media mix, though Ms. McCarthy said all participating units benefited.

"When I met with Mel Karmazin, [president-chief operating officer of Viacom] he said `Are all the divisions happy?"' said Ms. McCarthy. "And I said I think every division is happy. And he said, `Lisa, c'mon, everyone can't be happy.' I said, `No. every division is happy.' Everybody grew their dollars."

variety of deals

Last year's deal amounted to about 30% of the roughly $1 billion P&G spent on U.S. TV in 2001, according to Taylor Nelson Sofres' CMR. While P&G likes the cross-platform concept well enough to extend to a second year, Mr. Ross stopped short of predicting such deals would replace traditional upfront markets for P&G or others. "I think in the marketplace there will be a variety of kinds of deals, and this will be one kind," he said.

"The success of the partnership is evidenced by what has happened in the previous year, and most importantly, the renewal of the agreement," said Donna Salvatore, CEO of MediaVest.

P&G is also considering other cross-platform deals with other media companies, Mr. Ross said. "We're always looking for opportunities and in discussions with people."

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