Samsung's marketing splurge questioned

Seoul - Samsung is expected to spend around $14bn - more than Iceland's GDP - on advertising and marketing this year, but it doesn't 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 spent less on buying Motorola's handset business.

Samsung, which has a market value of $227bn, has made no secret of keeping up its aggressive marketing and promotion splurge as it seeks to make its brand as aspirational as Apple's, but the money it's spending doesn't always bring the desired result.

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 popular X-Factor talent show.

Projecting an image

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 jewellery 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 dancers in swimsuits.

Oh Jung-suk, associate professor at the business school of Seoul national university said: "Samsung's marketing is too much focused on projecting an image they aspire to: being innovative and ahead of the pack.

"They are failing to bridge the gap efficiently 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%, according to some data. 

Apple spends just 0.6% and General Motors 3.5%.

"When your brand doesn't have a clear identity, as is the case with Samsung, to keep spending is probably the best strategy," said Moon Ji-hun, head of brand consultant Interbrand's Korean operation.

"But maintaining marketing spend at that level in the longer term wouldn't bring much more benefit. No one can beat Samsung in terms of (ad) presence and I doubt whether keeping investing at this level is effective."

Global brand value

Meanwhile Samsung said in a statement that it would "continue to leverage our brand power to maintain growth momentum, while focusing on optimising the efficiency of our marketing activities," reiterating recent comments by its co-CEO.

"Our product innovation and marketing strategy have made Samsung the world's most preferred smartphone brand," J.K. Shin, who also heads the group's mobile business, told investors recently.

"Now we'll move from the most preferred brand to become one of the world's leading aspirational brands."

But, while Samsung has become the world's biggest advertiser, spending $4.3bn on ads alone last year, its global brand value of $39.6bn is less than half that of Apple, which spent only $1bn on advertising, according to Interbrand and ad researcher Ad Age.

Defending its marketing budget, Samsung can point to its lead in the global smartphone market - it sells one in every three smartphones and has more than double Apple's market share. The Korean group's savvy adverts mocking Apple devotees and heavy investment in distribution channels have strengthened its Galaxy mobile brand.