Tussle with Publicis over media rates could cost Channel 4 millions in ad revenue
Channel 4 and Publicis have locked horns over the cost of buying ads across the former's suite of channels; a tussle that could cost the broadcaster millions of pounds in revenue if left unresolved by the new year.
Channel 4's CCOr Jonathan Allan has taken the unprecedented step of penning a letter to Publicis Media clients / Channel 4
As first reported by the Guardian, Channel 4's chief commercial officer Jonathan Allan has taken the unprecedented step of penning a letter to Publicis Media clients - which includes big spenders like Asda and Samsung. The note informed them of the potential blackout after talks over a 2019 ad deal broke down.
“As I write, it looks very much like we may not reach an agency agreement with Publicis Media,” he noted.
“This means we will not be able to offer you the opportunity to advertise across our portfolio of 26 linear channels and three video-on-demand platforms from the start of next year.”
A source with knowledge of the matter confirmed to The Drum that the memo had been circulated.
It's understood that discussions on behalf of Publicis clients have come to a halt ahead of next year because Channel 4 is upping TV ad prices despite a decline in audiences.
Channel 4's portfolio includes E4 and Film4. It also sells inventory on behalf of BT Sport and UKTV's multitude of channels.
If the issue isn't resolved by 1 January it could spell trouble for Channel 4 since Publicis Groupe accounts for about 17%. The Guardian has placed the potential loss to Channel 4 at £210m, although The Drum understands the number is significantly lower.
Publicis Groupe was unable to comment on the report. In a statement to media Allan said Channel 4 had "put forward competitive proposal to Publicis" and would continue discussions to "hopefully reach an agreement that suits both parties."
The news comes amid huge pressures from advertisers on agency holding groups to drive down costs and break down internal silos.
Separately, Channel 4 announced earlier this week that it was to fill two newly-created roles in a restructure it believes will better suit its business as it prepares to move an estimated 300 staff to regional hubs across the UK.
The broadcaster's chief executive, Alex Mahon announced that the network will enlist a chief marketing officer and managing director of nations and regions next year.
In line with this, the company has merged its planning and communications departments, putting chief of staff Lynette Huntley at the top of that structure.