Report: Samsung & LG Spent Over $11B On Marketing In 2016

Samsung Electronics and LG Electronics combined spent over $11 billion on marketing in 2016, industry data shows, as reported by the Yonhap News Agency. Samsung's spending accounts for the majority of that figure, with the largest phone maker in the world spending approximately $10.2 billion on advertising and other promotional efforts last year, a 15-percent increase compared to the company's marketing-related spending in 2015. LG Electronics spent 1.3 trillion won — over $1.1 billion — on advertisements over the course of 2016, thus increasing its promotional spending by 21.4 percent year-on-year. Experts believe the increase in spending was caused by a number of factors, including Samsung's heightened focus on smartphones and LG's struggles to promote its other consumer electronics.

The report states Samsung had to invest more than expected to promote the Galaxy S7 and the Galaxy S7 Edge while also being forced to spend more on marketing following the Galaxy Note 7 fiasco last fall. After two unprecedented recalls that ultimately led to the discontinuation of Samsung's phablet, the company opted to commit more resources to marketing the rest of its smartphone portfolio in an effort to make up for some lost sales of the Galaxy Note 7, but also with the goal of maintaining its brand value that took a hit following the ordeal caused by its faulty flagship. All of that led to a significant increase in Samsung's promotional spending, experts say, adding that the trend was also caused by an increased competition on the domestic and global market.

As things stand right now, LG is hoping that the LG G6 will help it bounce back following disappointing performances of the LG G5 and the LG G4, while Samsung is looking to make up for the Galaxy Note 7 fiasco with the Galaxy S8 and the Galaxy S8 Plus. Given how both companies have high expectations from their latest high-end handsets and in light of the fact that other original equipment manufacturers (OEMs) are also looking to release new flagship devices in the coming months, the two South Korean tech giants will likely spend even more on marketing over the course of 2017, industry watchers believe. The LG G6 will be hitting the Western markets later this week while the Galaxy S8 and the Galaxy S8 Plus are scheduled to be released on April 21.

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