Samsung Telecommunications America -- maker of Galaxy smartphones and tablets -- is moving its digital ad business to Interpublic's RGA from Publicis Groupe's Razorfish.
The Dallas, TX-based subsidiary of the Korean electronics giant hired Razorfish as its digital agency of record last year. Around that time, parent company Samsung also selected a dedicated WPP team to support its b-to-b marketing strategy.
"Due to budget cuts and a change in direction on Samsung Telecommunications America's digital media work to be more tactically-focused, Razorfish is no longer working on the account," said a Razorfish spokeswoman. "We're exceptionally proud of the work we developed as their digital AOR over the past 18 months. While we're disappointed the relationship is changing, we wish nothing but great success for our clients."
RGA referred calls to the client. Samsung declined to comment.
The shift comes about two years after Todd Pendleton joined Samsung Telecommunications America as its Chief Marketing Officer. Prior to taking on the role, he was global brand communications director at Nike, where he worked since 1996, according to his profile on LinkedIn. RGA counts Nike among its top clients and is best known for its work on the Nike FuelBand.
It also comes as Samsung reported disappointing sales for its flagship smartphone and most profitable product, the Galaxy S4.
One of RGA's first Samsung projects was to support an initiative in which Samsung tasked one million of its customers to download a new app for free access to Jay-Z's newest album Magna Carta Holy Grail 72-hours before its July 4th release. According to people familiar with the matter, the company worked with a few shops on that effort.
Samsung works with a number of firms, including Publicis Groupe's Starcom (media) and 72andSunny (creative).
The electronics giant was a top global spender in 2012. According to an Ad Age DataCenter global marketer report, the company reported worldwide advertising expenses of $4.350 billion in 2012. That's almost double its global ad expenses of $2.714 billion in 2011.
In the U.S. last year, the company, which markets a bevy of consumer electronics products, spent $596.2 million on measured media, according to Kantar. It devoted nearly half of that amount to marketing the Samsung Galaxy S III wireless phone product.
Samsung's mobile electronics business has emerged as the only serious contender to Apple in the U.S. smartphone market in terms of both perception and sales. The brand's share of sales increased from 21% in the fourth quarter of 2011 to 30% in the fourth quarter of 2012. Apple's increased from 39% to 41% over the same time.
Contributing: John McDermott
