Samsung’s prolific ad spending doesn’t always deliver desired result

“Samsung Electronics Co is expected to spend around $14 billion – more than Iceland’s GDP – on advertising and marketing this year, but it doesn’t always get value for money,” Miyoung Kim reports for Reuters. “The outlay buys the South Korean technology giant publicity in TV and cinema ads, on billboards, and at sports and arts events from the Sydney Opera House to New York’s Radio City Music Hall. Google Inc spent less on buying Motorola’s handset business.”

“And Samsung, which has a market value of $227 billion, has made no secret of keeping up its aggressive marketing and promotion splurge as it seeks to make its brand as aspirational as Apple Inc’s,” Kim reports. “But the money it’s spending doesn’t always bring the desired result.”

“Last month, a Samsung-sponsored short-film contest finale at the Sydney Opera House received poor reviews for blatant product placement in a series of ‘behind the scenes’ videos. In Britain, viewers panned a product placement deal with ITV’s popular X-Factor talent show,” Kim reports. “Samsung spends a bigger chunk of its annual revenue on advertising and promotion than any other of the world’s top-20 companies by sales – 5.4 percent, according to Thomson Reuters data. Apple spends just 0.6 percent, and General Motors 3.5 percent.”

“While Samsung has become the world’s biggest advertiser, spending $4.3 billion on ads alone last year, its global brand value of $39.6 billion is less than half that of Apple, which spent only $1 billion on advertising, according to Interbrand and ad researcher Ad Age,” Kim reports. “‘The stronger, more differentiated the product, the less it needs to be propped up by advertising,”‘ said Horace Dediu, founder of independent research firm Asymco and a former Nokia business development manager, referring to Apple’s ad spend.”

Read more in the full article here.

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32 Comments

  1. Neither does/do the billions they spend buying mediocre parasite pseudo press, media and wall st. Know nothing analists…

    Quality speaks for itself and despite all the paid for FUD and trolls that invade all apple news sites, for the past year+, Apple cannot be tarnished or smeared, because the only consumers that count love it and it’s products and that Sam scumbag dear, will never stop.

    1. Well said. The reason the FUD doesn’t work is twofold: most of it occurs in the strange techno-blogosphere which is visited by only a smidgen of the millions in the real stores, and when they are in the stores, what they experience of Apple enraptures them, overcoming any vague negativity they may have absorbed from pallid news sources recycling the contemptuous FUD.

    2. iRonic too how mainstream media outlets neglected to mention AAPL and it’s now 500.32B market cap close on Friday. CNBC’s David Faber is supposedly some investment genius…. All I see is a smug paid dolt who has no comprehension of value or investment. He touts AmaZONE, along with Gaagle all the while ignoring the Worlds most valued innovative company that has been stripped of its brand value due to sub par junk manufactures that blatantly STOLE patented IP from Apple. Not only pathetic but truly narcissistic & incredibly ignorant.

    3. Since I started fre+lancing I’ve been bringing in $90 /h… I sit at home and i am doing my work from my laptop. Th℮ best thing is that i get more time to spent with my family and with my kids and in the same time i can earn enough to support them… You can do it too. Start here——— x.co/3CM8c

  2. Let me see if I can ‘math’ this out? Samsung spends 4.3 billion and Apple spends 1 billion on advertising. The article says that Apple spends “less than half” of what Samsung spends.

    1Billion / 4.3Billion = 0.23 or 23% of what Samsung spends. I think that would make it LESS THAN ONE QUARTER of what Samsung spends.

    They must be using a Galaxy Tab thingy or something to ‘mathematize’ this out.

    1. The original article, and the MDN quote, state that Samsung spends $ 14 billion, not $ 4 billion. Fourteen not four. While Apple spends $ 1 Biilion. One. 1 / 14 = 0.07 zero point zero seven, that is 7 % , seven per cent.

      1. “While Samsung has become the world’s biggest advertiser, spending $4.3 billion on ads alone last year, its global brand value of $39.6 billion is less than half that of Apple, which spent only $1 billion on advertising”

        Now I get it! It was the BRAND VALUE that was half of Apple’s brand value.

        Reading is such an important skill.

    2. ““its global brand value of $39.6 billion is less than half that of Apple,”

      Uhm, they were saying that Samsung’s brand value is “less than half” of Apple’s while they spend 4x as much moony on advertising, and the comparison is worse when you factor in other marketing spend.

    1. Advertising works only when you have a new product in the market, which is to be made aware of, which is what Apple does, as Apple doesn’t need to maintain MEMORY RETENTION with consumers. As with Samsung, they have so many GALAXY products, makes the Milkway seem more countable in comparison!

    1. Yes, but spending $4.3 billion buys a lot of talking heads repeating, Samsung is winning in the smartphone market. As they all sit their with all those Apple iOS devices.

      Samsung puts food on their table and roofs over their family’s heads. Seeing is believing. 76% of the sales in Japan are iPhones now. People want the best and they are also the ONLY 64-bit smartphones on the market. EVEN IF APPLE WILL NOT TELL YOU ABOUT THAT IN ANY TV AD!!!

      1. Samsung is not winning in the smart phone market, Android is. But most of that “winning” is no-name Android cheaply made feature phones in other parts of the world who no one wants.(Samsung’s premium phones are only about10% of the market.) Apple wins in the only metric that matters – profits and paying ecosystem with customers who have money to spend on apps, etc.. People have the “market share” on creating excrement but it isn’t worth anything. 🙂

  3. “as it seeks to make its brand as aspirational as Apple Inc’s”

    That’s a bit like WalMart spending a boatload of money to make it’s brand aspirational. Wouldn’t happen for WalMart. Ain’t gonna happen for Samsung.

  4. The numbers are a sham, the majority of that money is actually given to its own subsidiaries that it either owns or holds a stake in.
    Korean groups groups got slammed by the south korean government over this BS, as they’ve been monopolizing the advertising sector and using this special relation to prop up their spending ‘numbers’ for PR points.

    Even after a settlement, those groups still gave over 95% of their ad budgets to firms they owned. Think of it as a banker declaring to spend 100 billion dollars in advertising when he’s actually giving over 98% of it to his wife.

    1. That isn’t how ad spend works. 10% of the money goes to the ad agencies (as you correctly state, owned by Samsung in this case). The other 90% buys the media. So until Samsung owns the global media channels, only 10% goes back to their agencies, and 70% of that 10% is consumed by the agency’s operational expenses (paying Seth Grodin, keeping Samsung execs in Burberry, paying mobsters to threaten the lives of Koh’s relatives). So… When the dust settles Samsung is keeping maybe 3% of that $14b.

      1. > That isn’t how ad spend works.

        It only differs outside Korea, as they don’t own or run notable western tech and news sites, and can apply no pressure pain in economies where every aspect of life is dominated by that chaebol (including insurance/banking/loans).

        The announcement of a huge advertising budget itself is meant to pressure those outfits (through their marketing depts) to pander to Samsung’s favor, even if its actual spending was just a fraction of that or masked by sponsorship costs (paying off actors, influential people and such).

      1. They pay an actual social ad agency to jump on every relevant news or blog post to manage the discussions all in Samsung’s favor—probably on a monthly or quarterly basis. There are scripts involved, personality types, and a list of talking points as well. It’s no small operation

  5. Coca-Cola wasn’t the first carmel-colored soda, but it became iconic because of advertising. Samsung has achieved alot with it’s ad buys; It will never be Apple… But in terms of consumer sentiment, it is amazing how far they’ve come. Many people see Samsung as a high-end device. Especially TVs and phones. With there funny, Korean name, I assumed they would never be able to break out of the low-end stigma of other Korean products no matter how good they became. Hyundai is a good example of this phenomenon. However, Samsung seems to have done the impossible. Americans, especially older ones, are very susceptible to advertising messages.

  6. “And Samsung, which has a market value of $227 billion, has made no secret of keeping up its aggressive marketing and promotion splurge as it seeks to make its brand as aspirational as Apple Inc’s,”

    I honestly don’t see how that can ever be possible. Sure, Samsung may achieve a reputation for quality, but “aspirational” goes beyond that. It’s an excitement for the brand, a strong desire to get that awesome thing with the Apple logo on it and show it off to everyone. I don’t see Samsung ever achieving that status, because the brand is simply spread too thin.

    Even in the US, Samsung sells practically EVERYTHING. Phones and computers and TVs and monitors and cameras and Blu-Ray players. Washers and dryers and vacuum cleaners. In the kitchen, you’ve got microwaves and refrigerators and dishwashers and ranges. Hell, Samsung makes kitchen countertops!

    When your brand is everywhere, it’s nowhere. Consumers have a single opinion about Apple because they know what they are and what they do. But consumers see the Samsung logo plastered over half of Best Buy and Home Depot. How can you get excited about owning a phone from the same company that makes your f***ing washing machine?

    I’m not saying that this “thin brand” will affect how people think about Samsung’s quality. But it certainly does affect whether the brand becomes “aspirational”. Seriously, how many “Samsung fans” do you think there will ever be? Certainly not as many fans as Apple.

    ——RM

  7. Samsung Electronics Co is expected to spend around $14 billion

    Why? Because that’s how you sell crap to suckers.

    Meanwhile, at Samsung R&D:
    “Toss another 10% of our budget to our spies at Foxconn. We need some new Apple innovations for 2014.”

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