Philips drops incumbent Dentsu from global healthcare business

Carat retained the domestic appliances business, which was sold to PE firm Hillhouse Capital in March.

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This story has been updated with comments from Dentsu, and corrected to reflect that Dentsu’s Carat has retained Philips' media for its domestic appliances business. 

Philips has retained Dentsu’s Carat as its media agency for its domestic appliances business, which it sold off to private equity firm Hillhouse Capital for €3.7 billion ($4.4 billion) in March, the company confirmed.

The global healthcare electronics company, which has worked with Carat for two decades, will no longer work with the agency on its healthcare business. Carat, which held the majority of Philips global media business, will hang on to about one-third of the account, covering kitchen, coffee, garment care and home care appliances

“Dentsu are proud of our two-decade long relationship with Royal Philips and the growth we have fueled together,” said Peter Huijboom, Global CEO Dentsu Media and global clients, in a statement. “We're excited to embark on a new chapter, as we will focus on being the global media partner of Philips’ Domestic Appliances business. We look forward to joining forces in bringing meaningful innovations to consumers’ homes.” 

In January, Philips invited four global holding companies to participate in an integrated review for its $300 million PR, media and creative account. As of Friday, IPG, Omnicom and Havas are still in the running for the account, according to sources. The review is expected to conclude in May.

In March, Business Insider reported that WPP, which held Philips’ advertising account under Ogilvy since 2011, was also cut from the review, losing $30 million worth of business. WPP still holds onto a portion of Philips’ digital and performance media duties, awarded in a separate review.

Philips is seeking a new agency structure as it pivots away from consumer goods to become "a leading health technology company,” a spokesperson told Campaign US in January. Many large, multinationals are looking to consolidate with one holding company for integrated approaches between disciplines.

Philips, which employs approximately 81,000 people across 100 countries, spends roughly $300 million on advertising annually, per Comvergence. The company reported €3.8 million ($4.57 million) in revenue in Q1 2021, up 9% year-over-year.

R3 is running the review and was unavailable for comment.

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