Samsung and LG to Advertise and Invest More in 2nd Half

○ Aggressive ad campaign

The Samsung Group is expected to dramatically increase its advertising volume in this year’s second half with a focus on promoting products of its key affiliate Samsung Electronics.

A Samsung Electronics executive said, “We didn’t run many ads in the first half, so our ad spending in the second will be more than 50 percent higher than in the first half.”

“There is a wide consensus within the group that Samsung Electronics deserves meaningful appreciation for pioneering markets for LED (light-emitting diode) TV or AMOLED (active-matrix organic light-emitting diode) mobile phones,” he said, adding, “We also aim to contribute to boosting consumption and demand in our society.”

Industry experts said Samsung Electronics spent 57.3 billion won (45 million U.S. dollars) on advertising online and in newspapers, television, radio and magazines in the first half, down from 68.6 billion won (54 million dollars) in the first half last year.

The company spent 130.7 billion won (104 million dollars) on online and offline advertising last year. To maintain last year’s advertising spending level, it expects to increase ad spending 40 to 50 percent in the second half of this year, according to a Samsung source.

The company will also not advertise in some newspapers that previously did not run Samsung ads.

The parent group’s plan is interpreted as a move to reach out to customers by lifting the conglomerate’s spirit in the wake of trials over the below-market issuance of Samsung SDS bonds with warrant. The trials are expected to end in mid-August.

In the same context, the group’s Web site has been stressing intimacy with customers with a video guide on the main page. A new customer publication called “Samsung & u” was created by integrating the in-company magazine “Samsung World” and the customer magazine “Living Together.”

Voices within the group, however, feel the aggressive ad campaign could be premature, though agreeing with product promotion. A high-ranking Samsung source said, “Samsung is still being battered by certain members of society. There are sensitive pending issues to be resolved, so we have no other choice but to express our ideas and positions passively and defensively.”

○ Record investment for LG

The LG Group this year will make an additional investment of one trillion won (794 million dollars), with a focus on LCD manufacturing facilities. A group source said yesterday, “LG Display will invest more than a trillion won this year on adding the eighth-generation line in the LCD complex in Paju, Gyeonggi Province.”

As a result, the conglomerate will invest a combined 12.3 trillion won (9.7 billion dollars) this year, the largest in the group’s history and up 8.8 percent from the projection of 11.3 trillion won (8.9 billion dollars) made early this year.

LG Display has spent 4.4 trillion won (3.4 billion dollars) on building the eighth-generation LCD line in Paju and adding the sixth in Gumi. Investment in the eighth line will rise to 3.27 trillion won (2.5 billion dollars) until next year. The LCD line in Paju launched production in March this year.

LG Chem will invest 1.2 trillion won (952 million dollars) by 2012 on manufacturing glass panels, the key component of LCDs, to nurture LCD glass panels as a new growth engine and vertically integrate the LCD business within the group.

The group will also get aggressive on employment as well as for investment. LG Display CEO Kwon Young-soo recently announced the hiring of 1,700 regular workers --500 college graduates and 1,200 technicians -- in the second half of the year.