updated 07:52 pm EDT, Wed April 9, 2014
New hires won't impact existing relationships, unrelated to 2012 dispute
According to venerable industry trade magazine Ad Age, Apple is again expanding and diversifying its advertising firms and staff. The iPhone maker is said to be adding as many as four digital-advertising agencies to its roster, presumably in an effort to beef up its mobile and online advertising efforts. Apple will continue its longstanding relationship with TBWA/Media Arts Lab as its main partner, despite some now well-publicized spats in late 2012 and early 2013.
Media Arts Labs ran afoul of Apple's Senior VP of Worldwide Markting Phil Schiller a little more than a year ago when the combination of a Wall Street Journal article praising Samsung's latest products and what Schiller called a "pretty good" Superbowl ad from the Galaxy maker led Schiller to tell Apple's ad partner that "we have a lot of work to do to turn [the public perception] around." A response from MAL that suggested emergency measures "shocked" Schiller, who lectured the executive who wrote the response and inferred that perhaps the two companies were no longer on the same page. He allegedly followed up on the row by asking CEO Tim Cook about looking into other agencies as well.
Apple and MAL subsequently patched up the relationship and went on to create a new branding campaign for Apple that emphasized its California-based success story of the company, and the diversity of ways the iPhone and iPad are used by people from all walks of life -- campaigns that have been seen to be very successful, capped by a particularly well-regarded Christmas ad. The broadening of Apple's marketing strategy likely has little to do with the former dispute, and more to do with a shift in strategy towards more mobile and digital visibility alongside its flagship (and often highly memorable) TV and print campaigns.
Apple is said to be taking on agencies AKQA, Huge on the West Coast and New York-based ad shops Area 17 and Kettle. These will join Apple's existing network of digital firms that it uses, such as Rosetta's Level Studios, Profero, and indie agencies Traction and Eleven, among others. The pattern of partners would suggest that Apple is not planning to consolidate its digital advertising with its traditional campaigns, created with help from TBWA/Media Arts Labs. Since the argument with MAL, however, Apple has been seen to be bringing more creative talent in-house. One executive told Ad Age last September that Apple might even double its in-house team to "500 or 600 staffers," up from what was believed to be about 300 at the time.
The iPhone maker recently surpassed $1 billion in advertising spending, reporting $1.1 billion for 2013, though this was only a fractional rise in ad spending as a percent of sales -- and in fact the company has never spent less, percentage-wise, on advertising than it does now (currently 0.639 percent of revenues). Apple can easily afford the increased advertising budget, as it continues to grow US smartphone share against its rival Samsung, now capturing 41.3 percent of the US market compared to Samsung's 27 percent.
Despite the increased ad spending, Apple has a long way to go to catch up with Samsung on that front -- the Korean smartphone maker spends about $12 billion worldwide annually on promoting its products, which exacts a heavy toll on the company's profits in the smartphone arena compared to Apple. For 2012, Samsung outspent Apple on US advertising by $68 million, though that gap is closing as Samsung cuts its US budget and Apple increases its buying.