PHILIPS NARROWS $600 MILLION REVIEW TO TWO SHOPS

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(April 5, 2001) -- Philips Electronic's $600 million consolidated global media buying and planning review has been narrowed down to two agencies, Initiative Worldwide, owned by Interpublic Group of Cos. and Aegis Group's Carat.

In this latest round of cuts, the client has dropped incumbent Bcom3's Starcom MediaVest Group, WPP Group's MindShare and Omnicom Group's OMD. The Dutch electronics company consolidated its European media business with Carat in 1996 and now is looking to consolidate media buying and planning globally at one agency.

"It's unusual that you'll see a MediaVest lose an account like that," said an executive whose agency was involved in the review. "The business has been there a long time. There's a lot of history there."

Philips executives are meeting in the next two weeks at the North American offices of the surviving shops and at their overseas locations.

Havas Advertising's Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, currently handles print media buying for the consumer electronics business; Bcom3's MediaVest, New York, handles broadcast media buying for consumer electronics and personal care products; and Aegis Group's Carat Freeman, Boston, is responsible for business-to-business print buying.

When the review was initially confirmed in February a corporate spokeswoman in the Amsterdam office had said that the Dutch electronics giant wants to create an efficient way to buy and plan media, and that it also needed more clout in the marketplace.

Philips competes against two formidable rivals around the world, Sony Electronics and Matsushita Electric Industrial Corp. The spokeswoman also had predicted that the electronics marketer would decide on a new agency by June, but it appears that the process is moving much more rapidly. -- Richard Linnett

Copyright April 2001, Crain Communications Inc.

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