Samsung Outspends Apple In Smartphone Advertising Dollars

Tyler Durden's picture

With the marked shift in "coolness" surrounding smartphones away from Apple and toward Samsung (one of the primary reasons why AAPL is trading at or near its 52 week low and at the price target set for it by Jeffrey Gundlach back when the Smart Money crowd was advising their soon to be broke viewers to sell AAPL puts day after day), many wonder if this is merely a drop in innovation by Apple under it new, less visionary and far more Wall Street-friendly CEO, or is it something else? A possible answer is that is may be something as trivial as marketing. As the WSJ reports, in 2012 Samsung for the first time outspent AAPL in advertising dollars, handing out $401 million to raise brand awareness compared to Apple's $333 million.

From the WSJ:

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. The onslaught—including ads that poked fun at Apple while dubbing Samsung devices "The Next Big Thing"—has helped Samsung open a huge lead in the global smartphone race.


The willingness to spend heavily could prove even more important as the technology gap between rivals narrows.


Samsung's aggressive approach has carried over into this year, with Super Bowl ads and a big presence at the Mobile World Congress wireless industry conference in Barcelona., where Samsung built a large booth with a coffee bar and private office suites for meetings.


The company will roll out its new Galaxy phone Thursday night, with a big splash at Radio City Music Hall in Manhattan.


The heavy ad spending is only the most visible of Samsung's investments. Some wireless carrier executives said the South Korean company also spends more on "below the line" marketing than any device maker. Those funds help pay for in-store advertising, promotions and training for carrier sales representatives that help close the sale.

And while Apple's cash hoard would certainly allow it to far outspend Samsung if it so desired, one wonders what the incremental returns on such outflows would be: it is not as if anyone in the entire world, or at least in those parts of the world that can afford the student loans to load up on the latest generation of self-cannibalizing AAPL products, is not familiar with the famous fruit symbol and the Cupertino company's product line up. Alas, for AAPL's shareholders, especially those who bought near the top, this question may not be relevant - for them the company must do something to shake things up or continue being relegated to the "has been" coolness sector, which will impact future growth and revenues, absent of course some revolutionary product, which is what made AAPL the consumer juggernaut in the first place.

So while we wait to see how Apple responds, we look forward to another pseudo-activist investor owning 0.1% of the stock to come up with a 300 page slideshow demanding, now that the special dividend idea has been repeatedly struck down by management, that the company spend billions on a new, aggressive marketing campaign. Because when all else fails, one must clutch at 30 second primetime TV slot straws.

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SheepDog-One's picture

Advertising? What does Apple need that for? Doesn't everyone already own the entire iLineup, except for hermit shut-in's or total dorks?

McMolotov's picture

MDB would add doomer libertardians and gold- and bitcoin-bugs.

MillionDollarBonus_'s picture

I'm finding my iPad mini is extremely convenient. It supplements the iPad in situations where the full-size is inconvenient. It's great for when you're in a public area and you want to check your Facebook contacts or update your profile. It's the perfect addition to the range of excellent products offered by Apple.

redpill's picture

Or in case you want to load up your Fidelity App and swap around your large cap mutual funds for other large cap mutual funds, amirite?

Canadian Dirtlump's picture

With all the zeroes in volved he needs the larger 27  inch display on his mega mac.

dubbleoj's picture

Samsung makes nice toys, but can only afford to do so with korean slave labor, chinese slave labor, and a herd-driven korean consumer who buys anything they make at full price because korean society tells them to get the newest thing--essentially providing a test market and subsidy for their products that go global. their other group companies bleed so much cash and are run so poorly that samsung electronics is forced to buy their products at a 40% markup just to keep them in the black. thats what happens when you mix confucian culture with modern business--lifetime employment, zero incentive to be innovative as you just wait your turn for a promotion 20 years down the line. and as 30% of the economy in korea, samsung is basically the government, just another bureaucratic institution with an incredibly corrupt and byzantine culture. what happens when the koreans decide they dont want to work 14 hours per day for $45k/year any more? it probably wont happen because processed foods are being consumed at an exponential rate now--no cultural revolution here when everyones buying their 200% mark up german butter on cheap credit. what happens when one of the head office decides to cancel all projects that they are funneling cash through giving to one of their sister companies for the entire is happening with a certain construction company?

Canadian Dirtlump's picture

for 100 bucks or close to it new, the defunct blackberry playbook is a face melting value. The same small tablet that was roundly castigated for being so small. Nice to see apple slit their own throat making something they used to mock.

My 3 year old son has one in fact for watching scooby doo, etc on youtube. In a perhaps related story, from his online research creds he is being kicked around as a potential new bank of canada governor.

Mark Carney's picture

Ill put a good word in for him.



-count to Three apples

-piss your pants


-mandatory nap time

-push ctrl + P


Send me his CV

rich_wicks's picture

I'm finding my iPad mini is extremely convenient. It supplements the iPad in situations where the full-size is inconvenient. It's great for when you're in a public area and you want to check your Facebook contacts or update your profile. It's the perfect addition to the range of excellent products offered by Apple.

It's funny when I read something and cannot determine if it's sarcasm or seriousness.

I can see it as being sarcasm because who would need to use a device specifically to update your profile on Facebook?  And even if you had to do that, why wouldn't you just use a phone?

I can see it as being seriousness, because frankly, people have pretty spurious reasons for buying crap.

Canadian Dirtlump's picture

Glad to see Samsung shining. Those numbers are interesting, but Samsung's success is even cooler in the face of Apple's goodwill by the vast majority of MSM business talking heads and it's unquantifiable value. At least people are starting to realize that they aren't the ONE.

eclectic syncretist's picture

Samsung's phones are going to kick the iphones ass!

Crtrvlt's picture

not according to the most recent sales figures with both the 5 and 4s outselling the s3

ParkAveFlasher's picture

If that's your metric, good luck with that.

redpill's picture

The Galaxy S IV comes out this Friday, people are not going to buy the outgoing model when they know it's coming.

Crtrvlt's picture

same goes for everyone with the 4s who couldn't and didn't upgrade to the 5 w/o penalty.  


what we'll end up with anyway is a duopoly 

redpill's picture

4s sales went up because the hacked the price of them substantially once the 5 was out.  The same will probably happen with the Galaxy SIII but not to the same degree.

I agree we'll have a duopoly for the foreseeable future, but that's a massive sea change from just a couple years ago when Apple looked unassailable.  And just think of all the dumbfucks that decided to go long on their stock at $700 because some dipshit analyst on CNBC claimed it was a $1000 stock.  

ParkAveFlasher's picture

Apple pushed the smart phone technology out to the masses, with enormous one-time expense along the way.  Samsung is drafting behind.  Samsung doesn't need to be the leader, just competitive with its features and in pricing its offerings.  You might call it the "second mouse".

Crtrvlt's picture

yup.  already happenign with s3 with sprint offering $99 for the phone and other carriers offering buy one (at subsidized price) get one free.  apple never had a dominant market share unit wise.  seems like doing the opposite of all these analysts, who had it at 1000 and cut their targets to current levels, might be the way to go 

css1971's picture

No, Apple continue selling their old models as the cheap version. Samsung simply stop producing them, they have cheap models. So there'll be a sale to get rid of the obsolete stock in stores then it'll vanish... Oh and you won't get updates either.

The simple truth about smartphones is all the "ecosystem" stuff is bollocks. Nobody gives a shit. It's fashion. Every 2 years, people go to their store and ask, what's the good phone to have now? Which means the leadership can and will change on the basis of what's hot now. Last year Apple, today Samsung and tomorrow someone else with a better device.

Crash Overide's picture

Just got the S3 and it makes the iphone look like childs play. 

css1971's picture

Which one? They have 40 different smartphone models.

resurger's picture

Everyone i know switched to Samsung, saw couple of people with the new Nokia, it's not that bad.

css1971's picture

The Nokia has and does a load of shit Samsung simply can't do. You'll notice the video has 2.3 million views? Apple iPhone 5 intro video only got half that despite all the hype. They literally can't keep up with the demand for the thing.

(My Apple iSmug®: Course the time to go long was when their stock hit bottom at $1.69 in July)

reader2010's picture

Progress. If everyone really needed this type of shit, they wouldn't spend that much on brainwashing in the first place. 

TrumpXVI's picture

I still have just my two land lines......which I don't answer......the answering machine does.

orangegeek's picture

Apple's biggest revenue stream is the iphone.


This is going to hurt.

Lendo's picture

Wait until the S4 is released, it's going to be awesome for Samsung and their increasing market share.

Heck, even the S3 blows the iPhone 5 out of the water and the S4 will decimate it.

css1971's picture

The Samsung S4 will be their iPhone 5. i.e. A disappointment.

InTheLandOfTheBlind's picture

Now if samsung would put some money into their customer service they might be worth a shit.  

NoWayJose's picture

Not only is Samsung out spending Apple in marketing, they are also out spending Apple in product development. Meanwhile, Apple sits on its cash hoard. Things did not turn out well for the once powerful Dragon Smaug, who also sat on his riches, if I remember the Hobbit story.

Andy_Jackson_Jihad's picture

You don't remember it correctly. Smaug would have been fine if he didn't throw a shit fit when Samsung snuck in and stole a golden set of earbuds that come free with every iphone anyway.  AAPL will be fine to just sit and keep defending the cash while ignoring the ankle biters.  If AAPL decides to leave it's lair to go burn Seoul and it's miserable lakemen chinamen  koreans then it will be vulnerable to the black arrow ( I'm going to assume this would be a zerg rush).

css1971's picture

Samsung are having to spend $400 million telling you they are "the next big thing", which really by definition means they aren't.

Grimviewer's picture

Iv'e seen the ads.....usually starring a bunch of hipster twats  being "creative",or pricks who work on film's like the ad agencies have cast thier own employees in these fucktard ads...believing that most 20-30 somethings are so vapidly pavlovian,that any hint of "cool" results in an irresistible urge to buy......fuck off hipster cunts.