Samsung may be spending the money but its mega-buck marketing blitz is not really paying off.
Reportedly, Samsung is anticipated to spend a whopping $14 billion - more than Iceland's GDP - on advertising and marketing this year. However, the Korean company does not always generate the desired returns.
The marketing spend enables Samsung to garner publicity via TV and movie ads, as well as gain traction via billboards and a presence at sports and arts events. Its budget is colossal when considering that Google Inc. spent much less when acquiring Motorola's handset business.
While Samsung is quite aggressive on the marketing front, keeping rival Apple on its toes, the money spent on promoting the brand does not always result in the desired outcome.
"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."
In October, Samsung was the sponsor for a short-film contest final hosted at the Sydney Opera House. However, the company was lambasted for blatant product placements in several "behind the scenes" videos.
The company also received brickbats for a product placement deal with Britain's X-Factor on ITV.
"Is this a singing competition or an extended Samsung advert?" noted a Twitter user Ryan Browne.
Samsung's launch of its top-end Galaxy smartphone in New York was also criticized for being sexist as it portrayed women giggling and chatting about beauty products and jewelry, whereas men discussed about the new smartphone.
"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."
