Terra Lycos, Unilever in Marketing Alliance

Consumer packaged goods giant Unilever will promote its goods online in Latin America through a deal with portal Terra Lycos, continuing the string of alliances between big-name traditional advertisers and cash-strapped Web publishers.

The agreement, financial terms of which were not disclosed, comes just days after Barcelona, Spain-based Terra Lycos said its media operations would take six months longer to reach profitability than previously expected.

Like its competitors, the portal is suffering from a shortage of advertising money that had previously come from dot-coms.

Meanwhile, as the terms of Terra Lycos’ deal with Unilever exemplify, ad-dependent portals and niche-interest Web publishers are increasingly willing to offer new advertising and marketing arrangements in a bid to woo deep-pocketed traditional clients.

In Terra Lycos’ case, its new efforts include a new advertising format that it calls “sub-sets.” According to the firms, as Web surfers troll Terra Lycos’s content, they will see links to relevant Unilever products.

“We are tearing the borders down and inaugurating a new Internet experience, which entails much more than simple banner production and linking,” said Terra Lycos sales vice president Raul de la Cruz.

In addition to “sub-set” links in Terra Lycos content, the deal calls for the two partners to jointly produce content, to share marketing, data analysis and CRM duties associated with the joint content work, and to promote Unilever products in e-commerce initiatives and in general publicity.

The alliance will first target women in Spain, Latin America, and the Spanish-speaking market in the United States, areas in which Terra Networks — which merged with Lycos in 2000 — remains a sizable player. Eventually, the firms said the arrangement would expand to cover other countries in which Terra Lycos operates.

While Web publishers are feeling the pinch from the dot-com fallout and sluggish across-the-board ad spending, offline marketers like Unilever are finding new opportunities. The economic climate makes publishers more amenable to greater advertiser presence in their product, one of the reasons that sponsored Web content deals by traditional advertisers are currently on the rise.

“A few months ago, we were barely taking our first tentative steps towards advertising on the Internet,” said Unilever’s Laercio Cardoso de Holanda Jr., who heads the company’s Latin American Interactive Brand Center. “With Terra Lycos, we hope to achieve an ever-increasing expansion of our marketing actions online.”

The London- and Amsterdam-based consumer packaged goods giant recently unveiled a deal with iVillage to produce co-branded content in India. Meanwhile, competitors P&G and Clorox are hot on Unilever’s heels, with similar agreements with Women.com (which iVillage is set to acquire later this year) and other Web properties.

Earlier this month, iVillage also nabbed Coca Cola’s Dasani bottled water in a content deal. And this week, France’s Groupe Danone this week announced an agreement with StarMedia to create content promoting its products to Latin American audiences.

Naturally, online publishers are ecstatic about this upswing in activity from traditional marketers.

The work with Unilever “clearly demonstrates that the Internet will become a communication channel with a great deal of influence in brand development and building,” said Terra Lycos’ de la Cruz. “The Internet is going through a consolidation period and this alliance underlines the importance of this medium in the approach to marketing by traditional companies.”

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