The outcome means that Carat, which has worked with Philips for eight years on all of its main categories of business -- including healthcare, lighting and lifestyle, is losing a major piece of its account to MPG. Executives familiar with the matter said MPG has picked up Philips' consumer lifestyle business, which includes consumer electronics, in North America, South America and various European markets. Carat will retain health care and lighting across all markets, including the U.S.
Carat and MPG referred calls to the client, who couldn't immediately be reached.
Philips is also conducting a review on the creative portion of the account, for which final meetings have yet to take place.
The moves mark Philips' first major global review of its agencies in years. This April the company brought in Antonio Hidalgo as exec VP-chief technology officer of Philips Consumer Lifestyle. Previously, Mr. Hidalgo had spent many years at Mars and Procter & Gamble, according to his LinkedIn profile.
The willingness to partner with a different media agency could have, at least in part, been prompted by increasing tension regarding a potential conflict between Carat's P&G work for the Gillette men's grooming account in North America, which the firm won in 2009, and its work for the Philips' Norelco shaving brand.
For MPG, which has been operating without a CEO devoted to the U.S., it marks a significant win. Last April, Shaun Holliday, the head of the region, left the agency. The move, said to be a demonstration of the importance of improving the firm's U.S. business, formally appointed global leader Maria Luisa Francoli to also head its North American division. She's running the region with Sasha Savic, MPG's chief operating officer, who joined the firm last October.
Under the duo this year, the firm has won the consolidated Mexico Tourism account, Transitions Optical, Yellow Tail wines, Reynolds -- it works with sister agency Euro RSCG out of Chicago -- and the Economist's digital media assignment. The combined work accounts for an estimated $200 million in billings.
According to Kantar, Philips spent about $40 million on measured media in the U.S. It's understood that the company spends the majority of its media budget abroad, and the combined global budget is north of $100 million, according to industry executives.