Samsung Electronics has ousted Procter & Gamble as the world’s largest advertiser, spending $US11.2 billion on advertising and sales promotion in 2017.
The South Korean heavyweight increased total advertising budget by 13% in 2017, outstripping P&G’s estimated spend of $US10.5 billion, a figure largely unchanged from the previous year.
P&G has held on to second place, despite cutting $US200 million from its advertising budget in 2017 after the FMCG found that portion of its digital budget was not delivering effectiveness.
However, budget cuts did not extend to P&G’s wider media spending as funds were directed elsewhere to increase TV, radio, ecommerce and audio spend.
P&G is still the world's largest spender on a narrower definition of advertising, reporting $7.1 billion in advertising costs in the year ended June 2018, including TV, print, radio, internet and in-store ads.
Samsung's reported advertising expenses, excluding its massive sales promotion budget, came in at $4.8 billion in 2017.
One of Samsung Australia's 2018 ads
The dedicated ad spend is part of Samsung’s overarching mission to reposition itself as an "aspirational consumer electronics brand".
Apple, the market’s leading aspirational smartphone creator, spends just $US1 billion on advertising in comparison. In contrast Samsung’s global brand value is 50% less than rival Apple, despite spending strikingly more on advertising.
According to Thomson Reuters data, Samsung spends a larger proportion of its annual revenue, 5.4%, on advertising and promotion than any of the world’s top 20 companies. This year, Samsung is forecasted to spend ~ $US 14 billion on advertising and marketing.
The increase in Samsung’s ad spend follows a difficult period for the tech giant after multiple recalls of its Galaxy Note 7 handset.
Multiple reports of the smartphone spontaneously combusting due to exploding batteries saw Samsung lose $US 26 billion in stock market value. In the United States the handset was recalled twice after replacement units had similar combustion issues.
Other notable ad spend increases include Alibaba Group Holding, doubling spending compared to the previous year at $US2.7 billion.
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