Apple Inc. Takes Control of Its Marketing Destiny

After Steve Jobs' untimely death in 2011, Apple's (AAPL -0.57%) marketing strategy took a turn for the worse.

The "Genius" ads in 2012 were utterly painful to watch. Watching celebrities use Siri didn't prove to be particularly relatable. Apple has historically shied away from celebrity endorsements, and its experiment flopped. Ken Segall, the longtime Apple ad consultant that pioneered iBranding, felt that Apple had started to lose its luster in advertising. The design-centric campaign also didn't perform well, but that study may have been commissioned by rival Samsung (NASDAQOTH: SSNLF).

Marketing was a key issue at Apple's most recent patent trial with Samsung. The success of the South Korean conglomerate's "Next Big Thing" campaign supposedly kept Apple marketing chief Phil Schiller up late at night. Schiller was reportedly so distraught that he suggested to Tim Cook that Apple transition away from TBWA\Chiat\Day, saying that the Mac maker wasn't getting what it needed. Cook was open to the idea, deferring to Schiller's judgment.

According to Bloomberg, Apple is doing exactly that. The company is now starting to take more control of its marketing destiny, making several of its recent TV spots in-house. That underscores the tension between Apple and the ad agency that helped it create its most iconic marketing campaigns over the past three decades. Last year, Apple began building its own internal team, in part by hiring away several people from the TBWA unit that were already working exclusively with Apple.

It goes without saying that Jobs was a marketing genius who was heavily involved with Apple's marketing, and without him, Apple's advertising strategy has languished. Apple has slowly begun to spend a little more on marketing, attributing some of the 10% increase in SG&A expense last quarter to marketing services. Of its total $2.8 billion in off-balance sheet obligations, a small portion of that total is also related to advertising commitments.

Overall, Apple's ad spending is still relatively conservative, especially compared to Samsung. Advertisings have only risen modestly over the past three fiscal years.

Source: 10-K.

Marketing success aside, critics even pan Samsung for spending more on marketing than on R&D. The company's response to this was merely to retroactively reclassify the accounting of its marketing costs, as opposed to actually changing its ways. Even after the change, Samsung still spends 11 times as much on marketing than Apple did in 2013. This all comes shortly after Samsung said in January it wants to focus on increasing the efficiency of its marketing spending. Then it rebranded an entire terminal at London's Heathrow airport to promote the Galaxy S5.

Samsung's marketing machine isn't relenting anytime soon. Marketing has always been crucial to Apple's success, and the company is taking matters into its own hands now.