Electronics giant Philips hired a new agency to handle its $300 million ad business in a big loss to WPP and Dentsu

  • Ad giant Omnicom won Philips’ $300 million marketing business in a big loss to WPP and Dentsu.
  • Philips is transitioning from a consumer goods giant to a healthcare technology company.
  • It plans to promote itself as improving people’s health and well-being.
  • See more stories on Insider’s business page.

Philips hired ad holding company Omnicom to handle its global marketing business in a big hit to rival advertising companies WPP and Dentsu.

Omnicom agency TBWA will handle making Philips’ ads while OMD will oversee ad-buying strategy and Ketchum and FleishmanHillard will handle communications. Brand strategy firm Interbrand, design agency Critical Mass, and Omnicom’s Precision Marketing Group will also oversee parts of the business.

WPP handled Philips’ advertising for more than 10 years but got eliminated early on. Dentsu, which oversaw most of Philips’ ad planning and buying, lost that business. Havas and IPG were the other holding companies competing in the pitch, which was run by consulting firm R3.

Philips spends around $300 million on paid media each year, according to consultancy Comvergence. People with knowledge said WPP’s Ogilvy brought in about $30 million in annual revenue from the business.

The agency transition comes as Philips looks to move away from its consumer goods and electronics business and focus on more lucrative areas like healthcare technology. 

Philips’ chief marketing and ecommerce officer Lorraine Barber-Miller said Omnicom would use digital platforms to promote Philips as a company that improves people’s health and well-being through innovation.

A former Philips executive said Philips wanted to consolidate with a single holding company as it folded or sold divisions for products like televisions.

“People still think of Philips as the TV and shaving company,” the former exec said. “But [CEO Frans van Houten] has said, ‘I want to make this a health tech company.'”

Another person with direct knowledge said Omnicom had an advantage over other holding companies in having a significant presence in Philips’ home city of Amsterdam. The former Philips exec said WPP’s Ogilvy shifted responsibility for the Philips account from its London office to Amsterdam to keep the business.

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