PHD Wins Global Sony Ericsson Media Agency Account

Sony-Eriksson-phone

Mobile phone giant Sony Ericsson -- soon to become a wholly owned subsidiary of Sony Corp.-- has awarded PHD its global planning and buying assignment after a review, the client has confirmed.

The company, which launched the review in July, spends an estimated $200 million on ads worldwide.

The incumbent was WPP's MEC, which had the account for a decade. At the time it launched the review, the client stressed it was not about the work MEC was doing, but about the length of time since the last review.

Just last month, Sony and Ericsson decided to end the phone venture, with Sony agreeing to buy out its Swedish telecom partner.

That didn't bode well for MEC, as Omnicom media shops have won a number of pieces of Sony business around the globe, including the electronics giant's $125 million account for a major portion of the Asia-Pacific region, which went to OMD this summer.

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The client said the shift takes effect Jan. 1, 2012, with an initial contract term of two years.

"PHD has impressed us with their comprehensive strategic thinking and insight," stated Steve Walker, chief marketing officer at Sony Ericsson. "Moreover, there is a strong cultural and structural connection between our two teams."

Walker added that the client's Xperia smartphone portfolio "will be a cornerstone of Sony's four-screen experience, and PHD is the right agency to partner with in bringing consumers an experience that goes beyond smartphones."

Mike Cooper, CEO of PHD Worldwide, stated: "At present there are few categories more dynamic than the global mobile handset market. Sony Ericsson is an incredibly vibrant and future-facing company, and is in a great position with its latest Xperia products. This. combined with PHD's renowned strategic capabilities and track record for innovative and creative thinking, is a formula for a winning partnership."

That said, part of the reason for the pending breakup of the phone venture is the fact that Sony Ericsson has lagged in comparison to competitors in the smartphone space and had been under immense pressure in recent quarters to develop a successful smartphone strategy. It's banking on its Android-based Experia products to deliver that winning strategy.

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. By the third quarter, year-to-year sales had stabilized at a flat $2.1 billion, while net profits fell to zero, versus about $65 million for the same period in 2010.

Mixed numbers aside, Andrew McLean, CEO at PHD USA, said: "We've done a lot of work in the mobile space and this is a great example of the agency mobilizing its global network, focusing on the client's audience and their desire to grow their business." He added that the shop was "proud and excited" to work on the new account.

Commenting on the loss, MEC global CEO Charles Courtier stated: "This is obviously disappointing news for us. We have been together for 10 years and we are immensely proud of the work we've done for them. It's been a fascinating journey and we take pride in the strong and loyal partnership we have had with them, through good times and bad. We wish them well in their new future within Sony." 

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