Sony-Ericsson Kicks Off Global Media Review
Mobile phone giant Sony Ericsson has launched a global review of its media planning and buying assignment, the client confirmed Thursday. The company spends an estimated $200 million on ads worldwide, per sources.
The incumbent on the account is MEC, a unit of WPP's GroupM, which has had the Sony Ericsson business for 10 years. The agency declined to comment, referring calls to the client. Sources said MEC would defend the business.
However, the mobile phone marketer issued a statement indicating that "as part of its global procurement guidelines, Sony Ericsson undertakes a standard and formal review of supplier relationships. As a result, we are reviewing our future strategic and operational requirements of our global media planning and buying."
The client stressed in its statement that it was not unhappy with the incumbent: "This is not a reflection on our relationship with MEC, who has been our trusted partner for 10 years."
Certainly much has changed in the mobile phone sector since MEC assumed duties on the account a decade ago, including the Apple-led smart phone revolution. Other strong competitors in the field include BlackBerry marketer RIM and HTC.
Sources said Sony Ericsson has been under immense pressure in recent quarters to develop a successful smartphone strategy, now centered around handsets using Google's Android operating system.
The company's first quarter was a struggle, when profits were down by almost half to $15 million and sales were down 19% to $1.6 billion. Problems, it said at the time, were exacerbated by supply chain issues caused by the Japan earthquake.
At the end of the first quarter, the company said its share of the smartphone market was a modest 5%, up a tick from the 4% it had in 2010. But it had to cut prices to get there. In terms of dollar value, its first-quarter share was just 3% versus the 6% it controlled in 2010.
The review is being handled out of London and is being managed by the consultant Accenture. The company is a joint venture between electronics giant Sony Corp. and Sweden's mobile technology firm, Ericsson.