“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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