Apple Narrows Gap in U.S. Advertising Spending With Rival Samsung

MacRumors · Apr 8, 2014

Samsung is the leader in mobile advertising, significantly outspending all its rivals on commercials that target the U.S. market. Though still number one, the Korean company's advertising dollar lead is shrinking, reports the Wall Street Journal, with Samsung's rivals increasing their advertising spending by 33 percent year over year in 2013.

According to ad research company Kantar Media, the top seven U.S. smartphone makers spent over $1.3 billion in 2013 on advertisements for print, TV online, radio and outdoor venues. Apple spent $351 million last year, with the bulk of that money ($339 million) going toward TV ads.

While Apple increased its spending 5 percent year over year on mobile phone ads, Samsung scaled back its advertising efforts, reducing its U.S. advertising by 10 percent in 2013 to $363 million. The gap between Samsung and Apple now has narrowed to $12 million, which is less than the $68 million gap in 2012.

Samsung is known for its aggressive Galaxy marketing campaigns, which routinely target rival devices. Samsung's clever tagline "The next big thing" reportedly infuriated Apple executives and lead to a tense email exchange between Apple's head of marketing Phil Schiller and the company's longtime ad agency, TBWA/Media Arts Lab.

Despite outspending Apple in advertising dollars, Samsung trails Apple in U.S. smartphone subscribers, with 26.7 percent market share as compared to Apple's 41.6 percent. Apple's market share continues to grow, but the overall rate of adoption is slowing as the smartphone market approaches saturation.

Article Link: Apple Narrows Gap in U.S. Advertising Spending With Rival Samsung

JayCee842 · Apr 8, 2014

This is not a surprise. People bash me when I say the success of Samsung's Galaxy line is an affect of their drastic marketing.

keterboy · Apr 8, 2014

Joke of the day

Nebrie · Apr 8, 2014

Now work on international advertising. Outside of the tier 1 countries, Apple advertising is almost non-existent while Samsung is everywhere.

bbeagle · Apr 8, 2014

JayCee842 said:
This is not a surprise. People bash me when I say the success of Samsung's Galaxy line is an affect of their drastic marketing.

Instead of ignoring Samsung, Apple needs to combat them.

In a nice, funny, way though.

Hello, I'm an iPhone. Hello, I'm a Samsung Galaxy.

MartinAppleGuy · Apr 8, 2014

bbeagle said:
Instead of ignoring Samsung, Apple needs to combat them.

In a nice, funny, way though.

Hello, I'm an iPhone. Hello, I'm a Samsung Galaxy.

You got it

MarkMS · Apr 8, 2014

Apple might be narrowing the gap in phone advertising, but Samsung still spends a boatload overall.

realeric · Apr 8, 2014

I was told Samsung have been spending money on task force teams for reviews or comments.

Xerotech · Apr 8, 2014

MarkMS said:
Apple might be narrowing the gap in phone advertising, but Samsung still spends a boatload overall.

If this is advertising budget in general, Samsung has many different products.

tasset · Apr 8, 2014

MarkMS said:
Apple might be narrowing the gap in phone advertising, but Samsung still spends a boatload overall.
Image

Thanks for posting this chart, I was about to go search for it. Narrowing the gap on TV/radio marketing may be happening but I guarantee you Apple is not giving store flunkies and operators the same kickbacks/spiffs to push their products that Samsung is which makes up a chunk of their budget.

bbeagle · Apr 8, 2014

Nebrie said:
Now work on international advertising. Outside of the tier 1 countries, Apple advertising is almost non-existent while Samsung is everywhere.

Might be a reason why Apple's profits are so much higher. Apple doesn't pay the $3 billion additional that Samsung pays for advertising.

Rad99004 · Apr 8, 2014

JayCee842 said:
This is not a surprise. People bash me when I say the success of Samsung's Galaxy line is an affect of their drastic marketing.

I say yes and no.

Apple needs to concentrate on their feature lists.

At this point Samsung is so far ahead.

I like Apple for its ease of use. This is great but that yesterdays feature.

OS wise Microsoft is even ahead. I can't count how many times I try swiping down from the top of the screen to close an app. I like having two apps open on the screen at the same time.

Apple just catch up, pass them up and do what you do.

samcraig · Apr 8, 2014

tasset said:
Thanks for posting this chart, I was about to go search for it. Narrowing the gap on TV/radio marketing may be happening but I guarantee you Apple is not giving store flunkies and operators the same kickbacks/spiffs to push their products that Samsung is which makes up a chunk of their budget.

No - different model. Instead of offering incentives - Apple contracts the carriers to sell a guaranteed amount or the carrier eats the cost. And the margins on their phones are slim.

So I wouldn't want to be a carrier store manager. On one side you have great profits you can make with Android OEM incentives (and your employees make money) on the flip side, you have to make sure you're hitting your Apple iPhone numbers or you're costing corporate money.

andrew0122 · Apr 8, 2014

. . . But is this the line for apps?? :apple:

tasset · Apr 8, 2014

samcraig said:
No - different model. Instead of offering incentives - Apple contracts the carriers to sell a guaranteed amount or the carrier eats the cost. And the margins on their phones are slim.

So I wouldn't want to be a carrier store manager. On one side you have great profits you can make with Android OEM incentives (and your employees make money) on the flip side, you have to make sure you're hitting your Apple iPhone numbers or you're costing corporate money.

Therein lies the problem- the carriers exist (or 'should' exist) to sell mobile service. End of story. They should be nothing but a passthrough for device sales and only be incentivized to direct customers to the device that best fits their need and sells their service. Perhaps this is the way things are heading now with no contract plans in the US and device costs are broken out from service.
But when you have OEMs profit sharing with retail employees, their managers, and carrier HQ, their motivations change from satisfying the customer to their own interests in the short term. I get that is the way the sales game is played, I just long for a day when it is not.

wigby · Apr 8, 2014

Rad99004 said:
I say yes and no.

Apple needs to concentrate on their feature lists.

At this point Samsung is so far ahead.

I like Apple for its ease of use. This is great but that yesterdays feature.

OS wise Microsoft is even ahead. I can't count how many times I try swiping down from the top of the screen to close an app. I like having two apps open on the screen at the same time.

Apple just catch up, pass them up and do what you do.

Sorry but you kind of sound like a marketing douche. Ease of use is "yesterdays feature"?

Ease of use will always be the number 1 feature for the general consumer of electronics and software.

Why are you trying to close an app by swiping down? Not sure I understand your problem.

So instead of complaining about the iPhone's 4" screen being too small, you want two apps open on it at the same time???

brendu · Apr 8, 2014

I must not watch the right shows. I see a ton of Samsung commercials but very rarely see apple commercials. Really I only see apple ads when watching live sports. I hope this money is worth it. Apples advertising isn't all that great anymore. I have seen teenagers who made better mockup ads than these million dollar ad agencies

Popeye206 · Apr 8, 2014

Apples best advertising has been word of mouth one you can't buy. So, for Apple to get it's "mojo" back, they need to make the iPhone 6 not just meet the other larger phones, but beat them in some cool or innovative way.

Honestly, I don't think this would be hard for them to do all the phones seem to have reached a peak in features. Quality, performance and ease of use is where Apple can really shine.

samcraig · Apr 8, 2014

tasset said:
Therein lies the problem- the carriers exist (or 'should' exist) to sell mobile service. End of story. They should be nothing but a passthrough for device sales and only be incentivized to direct customers to the device that best fits their need and sells their service. Perhaps this is the way things are heading now with no contract plans in the US and device costs are broken out from service.
But when you have OEMs profit sharing with retail employees, their managers, and carrier HQ, their motivations change from satisfying the customer to their own interests in the short term. I get that is the way the sales game is played, I just long for a day when it is not.

I agree. But if there are no incentives, there should also not be contracts with OEMs to sell a specific amount either. The problem with that is - that affects manufacturing because no one wants to have a short supply, nor does anyone want to massively over-produce...

wigby · Apr 8, 2014

tasset said:
Therein lies the problem- the carriers exist (or 'should' exist) to sell mobile service. End of story. They should be nothing but a passthrough for device sales and only be incentivized to direct customers to the device that best fits their need and sells their service. Perhaps this is the way things are heading now with no contract plans in the US and device costs are broken out from service.

Now try telling that to cable companies too. Seriously, do you blame them? No one wants to be just another data pipe.

reden · Apr 8, 2014

I have always been an iPhone user. I decided to go into the android world unbiassed by switching over to the HTC One first, then the S4. Both are good phones, but their downfalls is Android, and the User Experience that both companies implemented with their customer interfaces. NFC is useless, all the eye stuff for the S4 are just gimmicks. Both phones can get annoying to use. The only thing I miss from both phones are the Bigger screens, and the swipe to text features. Other than that, I don't see why Samsung likes to bash Apple when their Galaxies are full of flaws that far surpass the iPhones. The build quality of the HTC is an illusion as well. It's a beautiful phone, but some of the plastic parts are just pathetic quality, even dye from your jean pockets will get stuck to it, and it will be hard to take off. I had the silver HTC One with white trim, and wore some red cargo shorts I had once, had it in my pocket, it turned into an silver HTC one with a pink trim.

tasset · Apr 8, 2014

samcraig said:
I agree. But if there are no incentives, there should also not be contracts with OEMs to sell a specific amount either. The problem with that is - that affects manufacturing because no one wants to have a short supply, nor does anyone want to massively over-produce...

I will concede Apple's minimum order demands is both ruthless and even a bit self protectionist. The product can and should stand on its own. However they are dealing with phone companies who would like to have the iPhone to not be at a competitive disadvantage but then in turn try to sell as absolutely few of them as possible were it not for this guaranteed order amount.

H2SO4 · Apr 8, 2014

Xerotech said:
If this is advertising budget in general, Samsung has many different products.

THIS, This!

tasset · Apr 8, 2014

wigby said:
Now try telling that to cable companies too. Seriously, do you blame them? No one wants to be just another data pipe.

I agree. But who blames them? I DO. As should everyone else This topic would diverge into something else, so I'll briefly say that America's broadband infrastructure will slink further and further behind the rest of the world until it's realized en masse that "just another data pipe" is in the country's best interest.

bbeagle · Apr 8, 2014

reden said:
The only thing I miss from both phones are the Bigger screens, and the swipe to text features. Other than that, I don't see why Samsung likes to bash Apple when their Galaxies are full of flaws that far surpass the iPhones.

True.

The SIZE of the phone is the main feature that makes the purchasing decision of an Android over an iPhone - not what the phone can do.

Galaxies are full of flaws, but you can't count on the media to report it. Apple needs to step to the plate and ADVERTISE the flaws.

Apple Narrows Gap in U.S. Advertising Spending With Rival Samsung

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