The one-year deal covers numerous P&G brands that will be featured initially across Viacom's 12 television channels including CBS, MTV, VH1 and Nickelodeon. Both companies expect this to expand to outdoor advertising, radio and Blockbuster video-rental stores. The deal could eventually become a global contract.
It is the first in what many expect to be a wave of big media advertising deals. AOL Time Warner is working on similar deals comprising its internet, print and television properties.
P&G has been a pioneer of advertising strategy in the past. It says as much as 40% of its advertising budget could be tied up in this kind of deal in the future.
The deal means P&G will no longer have to deal separately with cable or network TV broadcasters, which it spent more than $986.6m (£695.8m) with in the US last year. In theory, dealing with the media company, rather than TV channels, allows P&G cheaper advertising thanks to its huge marketing budget.
The deal certainly gives it the clout to get peak time advertising on oversubscribed channels such as VH1 and perhaps the chance to access Viacom research and data on its viewers.