Samsung Restructures U.S. Marketing Team as Mobile Division Falters

Company Plans to Hire Exec to Oversee Media

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Samsung Electronics is making changes to its U.S. marketing team, aligning it with the conglomerate's morphing goals.

Todd Pendleton
Todd Pendleton

Todd Pendleton, CMO of the company's U.S. mobile business, now oversees creative content for mobile and other units; Vince Hudson, hired from P&G in March, leads brand strategy. And the company is recruiting a separate executive to handle all media planning, according to two executives familiar with the company.

Shifts to the U.S. marketing ranks began quietly earlier this year, following the announcement that Samsung would combine its U.S. mobile division -- Samsung Telecommunications America, based in Dallas -- with its consumer electronics and home appliances. That unit, internally dubbed One Samsung, is for the first time under the supervision of one president and CEO, Gregory Lee

Mr. Pendleton took on oversight of consumer electronics and home appliances earlier this year, said Christina Pantin, VP-public relations for Samsung U.S. Those units were previously run from New Jersey. In addition to his role as CMO of STA, Mr. Pendleton is "the chief creative officer for the combined businesses in the U.S.," Ms. Pantin added. "He is putting more of his creative involvement outside of mobile," including the advertising for Samsung's new line of HD TVs.

Additional decisions about the roles of Messrs. Pendleton and Hudson, as well as the reporting structure of the company's key marketers are still being hashed out, said an executive familiar with the company. The company said both Messrs. Pendleton and Hudson report to Mr. Lee, but declined to comment further on the management structure.

Mr. Pendleton said the organizational shifts were designed to consolidate Samsung's U.S. business into one unit, with an increasing focus on consumer electronics, including emerging categories like wearables and connected homes. "This is a company that is moving full-force into that direction," Mr. Pendleton said. "We're definitely trying to unify from a brand perspective."

In its third quarter earnings, reported on Thursday, operating profit at Samsung's mobile division declined by 74%. As a share of operating profits, the unit has shrunk to its lowest level since 2008 -- before the birth of Galaxy smartphones. Many analysts are comparing its decline to earlier slides from Blackberry and Nokia.

Shifting Influence
Over the past three years, Samsung developed an outsized, familiar presence in TV and mass-media advertising. It is the biggest ad spender in its category and 16th largest nationwide. Last year, Samsung reported $1.7 billion in U.S. advertising spending, according to the Ad Age DataCenter. And it's showing no signs of pulling back: in its two most recent pre-earnings statements, the company said it was ramping up marketing to fend off weakening sales.

Vince Hudson previously worked for P&G.
Vince Hudson previously worked for P&G.

At the same time, the influence of Mr. Lee, a 10-year Samsung veteran, is growing. He has a marketing background at CPG brands such as Johnson & Johnson and P&G. Mr. Lee, a Korean-American fluent in Korean, is well-regarded with executives in Seoul, who have increased their involvement in the U.S. as the company's financial position has deteriorated, said one executive familiar with the company.

In July, Mr. Lee announced a new office in Manhattan that will soon house the bulk of the U.S. brand-marketing team. Mr. Pendleton will be relocating from Dallas to New York next year. The transition of the marketing team from Dallas to the east coast has been rocky, sinking the morale of some marketers in Dallas, according to two executives familiar with the move. "[Human relations] is not a strong suit at the company," said one executive who has worked with the company.

"We're going to move to New York to be closer to our agency partners, our vendors and everyone at Samsung," said Mr. Pendleton. Samsung expects to finalize the transition by the end of 2015, according to an executive familiar with the decision.

In January, Samsung appointed Seok-pil Kim, its former European CEO, as global CMO. Mr. Kim led a six-month global agency review, which Samsung finalized Oct. 1, with incumbents Publicis Groupe's Leo Burnett and Starcom MediaVest Group's Starcom signed on along with multiple newcomers. Mr. Kim steered the review, giving Korean leadership more input than is typical, according to one executive.

Contributing: Jeanine Poggi

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