South Korea's tech giant Samsung Electronics Co. spent the most money in advertising and sales promotion among companies around the world last year, a global consulting firm has said. This was largely due to a temporary increase in spending in order to improve the company’s image after the highly publicized recall in 2016 of its Galaxy Note 7 phones due to battery explosions
According to industry sources on Dec. 9, Samsung Electronics ranked first on the list of "The World's 100 Largest Advertisers" released by Ad Age, a global ad consulting firm headquartered in New York, earlier this month. It is the first time that Samsung has taken the top spot on the list.
Samsung Electronics pumped US$11.2 billion (12.57 trillion won) into its advertising and sales promotion in 2017, up 13 percent from the previous year. Procter & Gamble Co. (P&G), the largest household and personal products company in the United States, came next with US$10.5 billion (11.79 trillion won) spent during the 2017 fiscal year between July 2017 and June 2018, almost the same with the previous year.
France’s L'Oreal came in third with US$8.6 billion (9.65 trillion won), followed by Unilever, a British-Dutch transnational consumer goods company co-headquartered in in the United Kingdom and the Netherlands, with US$8.5 billion (9.54 trillion won) and Switzerland’s Nestle with US$7.2 billion (8.08 trillion won).
However, P&G maintained the number one spot in terms of ad expenditure on pure media, such as television, radio, printing, internet and shop ad, with US$7.1 billion (7.97 trillion won) over the same period, outpacing Samsung Electronics with US$4.8 billion (5.39 trillion won) by a large margin.
The total spending on advertising by the world’s top 100 advertisers came to US$279 billion (313.18 trillion won) last year, up 4.9 percent from a year earlier. In particular, China’s Alibaba saw its ad spending grow by a whopping 105 percent to US$2.7 billion (3.03 trillion won) compared to a year ago, while Tencent had a 46 percent increase to US$2 billion (2.25 trillion won), showing the highest and second highest growth in the world, according to the consulting firm.
Samsung, however, slashed its ad expenditure this year. According to a regulatory filing with the Financial Supervisory Service (FSS) from the company, its consolidated spending on advertisements totaled 2.82 trillion won (US$2.51 billion) as of the end of September this year, down as much as 24.3 percent from 3.72 trillion won (US$3.32 billion) over the same period last year. The figure for the individual company, except for affiliates, stood at 401.5 billion won (US$357.68 million), which was less than half of 961.4 billion won (US$856.48 million) a year earlier.
Samsung Electronics’ consolidated expenditure on sales promotion, including exhibition and new product launching event, amounted to 5.27 trillion won (US$4.69 billion) as of the third quarter of this year. The figure slightly grew from 5.23 trillion won (US$4.66 billion) over the same period last year.
An industry watcher said, “Samsung Electronics’ smartphone business accounts for most of the company’s spending in advertising and sales promotion. Samsung Electronics might have cut down its ad expenditure as the company believes that it has overcome the Galaxy Note 7 issue to some degree this year and its sales have fallen short of expectations.