Samsung Electronics Co is expected to spend about US$14 billion — more than Iceland’s GDP – on advertising and marketing this year, but it does not always get value for money.
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.
Samsung, which has a market value of US$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, but the money it is spending does not always bring the desired result.
Photo: Reuters
A Samsung-sponsored short-film contest finale at the Sydney Opera House last month 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 X-Factor talent show.
“Is this a singing competition or an extended Samsung advert?” asked Twitter user Ryan Browne.
Earlier this year, Samsung’s New York launch of its latest top-of-the-range Galaxy smartphone came under fire for being sexist, portraying giggling women chatting about jewelry and nail polish while the men discussed the new phone, and the company’s new fridge and washing machine launch in South Africa drew similar complaints as it featured swim-suit dancers.
“Samsung’s marketing is too much focused on projecting an image they aspire to — being innovative and ahead of the pack,” said Oh Jung-suk, associate professor at the business school of Seoul National University. “They are failing to efficiently bridge the gap between the aspiration and how consumers actually respond to the campaign. It’s got to be more aligned.”
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.
“When your brand doesn’t have a clear identity, as is the case with Samsung, to keep spending is probably the best strategy, but maintaining marketing spend at that level in the longer term wouldn’t bring much more benefit,” said Moon Ji-hun, head of brand consultant Interbrand’s South Korean operations. “No one can beat Samsung in terms of [ad] presence and I doubt whether keeping investing at this level is effective.”
While Samsung has become the world’s biggest advertiser, spending US$4.3 billion on ads alone last year, its global brand value of US$39.6 billion is less than half that of Apple, which spent only US$1 billion on advertising, according to Interbrand and ad researcher Ad Age.
Samsung has a more diverse range of products that need more marketing across different target audiences, but the heavy marketing spend suggests a need to convince consumers that it belongs at the top. Apple can afford to spend less as it already has that brand recognition and cachet.
“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.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
Popular vape brands such as Geek Bar might get more expensive in the US — if you can find them at all. Shipments of vapes from China to the US ground to a near halt last month from a year ago, official data showed, hit by US President Donald Trump’s tariffs and a crackdown on unauthorized e-cigarettes in the world’s biggest market for smoking alternatives. That includes Geek Bar, a brand of flavored vapes that is not authorized to sell in the US, but which had been widely available due to porous import controls. One retailer, who asked not to be named, because
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai
RSS