Samsung ad (iPhone 5 launch 001)

For years, the knock (unfairly) against Apple has been its slick marketing was what pushed sales. A report earlier this week put a dent in that urban myth, showing South Korea’s Samsung outpaced the iPhone maker in terms of self-promotion.

Samsung spent $401 million to promote its mobile devices in the U.S. during 2012, above Apple’s $333 million during the same period, according to the Wall Street Journal. Although Apple’s brand is much better known, Samsung is pouring money toward raising brand awareness in the U.S. market, trying to overcome the lead the iPhone already has.

Indeed, Samsung’s marketing budget may be cutting into its profits – spending that will only increase as sales of the company’s smartphones climb, say analysts…

Samsung’s marketing “has been a crucial component to Samsung’s success in surpassing Apple as the premiere smartphone manufacturer and top cellphone player in the industry,”according to CNET, which cited the Wall Street Journal report on Kantar Media research.

Outspent by rival Apple Inc. more than three to one in advertising for mobile phones in the U.S. in 2011, Samsung responded with a marketing blitz on TV, billboards, the Internet and print media that moved the Korean company into the pole position last year.

In 2012, Samsung spent $401 million advertising its phones in the U.S. to Apple’s $333 million, according to ad research and consulting firm Kantar Media.

Among Samsung’s splashiest marketing: a 2012 “Next Big Thing” television campaign poking fun at the iPhone as no longer the coolest device.

Fortune has a nice write-up on how Samsung’s ad agency 72andSunny came up with the now famous commercial that bashes iPhone line sitters.

Galaxy Note II launch Kayne West performance
A promotion of Samsung’s new Galaxy Note included Kanye West.

As we reported late last year, such marketing efforts are depressing Samsung’s profit margin.

Asymco analyst Horace Dediu found the Korean firm had one of the lowest operating profit markets in the mobile industry: 17 percent. That compares to around 45 percent for the iPhone, although some expect that to change in the future – particularly if Apple unveils an inexpensive handset while also propping up sales in some emerging markets.

http://www.youtube.com/watch?v=YzkfC7–jog

Dediu points to Samsung’s spending on Sales, General and Administrative, known as SG&A.

In the case of Samsung Electronics, as sales has grown these expenses have grown in proportion. As a percent of sales SG&A have held relatively steady at around 17%.”

According to Apple’s former ad man who conceived the ‘Think Different’ campaign, Apple needs to rethink and amp up its advertising to re-create emotional connections with its loyalists.

Here’s Samsung’s Super Bowl commercial.

http://www.youtube.com/watch?v=5ae7E8J7h7Y

While Apple has had a relatively easy time marketing its iPhone via blogs and news of fans lined up around the block each time a new product goes on sales, Samsung is having to build its reputation as a smartphone maker.

Another unseen advantage for the consumer technology giant many have written off as past its prime.

  • pauleebe

    This makes sense, since every turn you make you see an obnoxious samsung TV, paper or billboard advertisement.

    I’m curious how Apple’s bottom line would change had they advertised as aggressively, seeing as they are maintaining and growing their iPhone market share at least in the US.

    • Kaptivator

      The best advertisement is Word of Mouth. Marketing 101. When people are not talking about it, you have to spend to get the word out. The iPhone sells itself. There is really not a need for apple to market it. Plus, networks advertise iPhones for Apple (correct me if I’m wrong). Reason I assume that is because every iPhone commercial I see is Carrier based. So its more like a commercial for that particular carrier saying something about the iPhone on their network and how it performs.

      • pauleebe

        You do raise a good point regarding word of mouth. But there wouldn’t be any harm in Apple spending at least half as much as Samsung on advertising.

        And those advertisements are Apple based, but likely paid partially by the carrier, which is why we see their logo at the end. Most carriers seem to want to push non-Apple devices as they bring in more profits for the carrier.

      • Kaptivator

        Honestly, I only see either iPhone or Galaxy commercials in my area for cell carriers. More iPhone with ATT, VZW and Sprint than Galaxy or Note carrier based commercials. And the commercials with samsung is normally buy one get one free or buy one and get something free with it..ie buy a phone get one free or buy a phone and get a case free or buy a phone and get a phone free with a case for each phone.

        Yes, in store, carriers do push other phones. Thats why I either go to best buy or just directly to apple for my iDevice purchases. Unless best buy is giving a gift card or something else away with the purchase.

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  • The differences in Apple Vs. SS ads is this: Apple’s ads portray how you can use your iPhone/iPad in real life and connects with people that way. Samsung’s ads are mostly DEFENSIVE, poking fun at Apple and their users. Then they sprinkle in a little of the features of their devices. One good Apple ad is equivalent to five Samsung defensive ads IMO.