SAN FRANCISCO: The consumer electronics sector is seeing a flurry of agency reviews that some say are a reflection of the industry's stable market position amid the troubled economy.
Toshiba America Consumer Products and LG Electronics are among several consumer electronics companies that are currently reviewing PR agencies. And Samsung Electronics recently consolidated its global corporate work with Edelman (PRWeek, March 2), while Philips Electronics – whose consumer electronics division is a small part of its larger business – recently teamed with Omnicom to create OneVoice to service its PR needs (PRWeek, March 9).
Maria Repole, assistant VP of corporate communications at Toshiba America Consumer Products, said the company has not issued a formal RFP, but is conducting a “competitive analysis” to gauge the capabilities of agencies outside of its current AOR, Brodeur Partners. Toshiba's consumer products division includes LCD TVs and portable DVD players.
“In the [consumer electronics] space, it's even more competitive now,” she added. “So companies are looking for ways to differentiate their products.”
In its global PR consolidation with Edelman, Samsung, one of Toshiba's top competitors, is looking to build its brand as the preferred choice. At the time, Bret Walrath, Edelman EVP, noted that the electronics company wanted to move from the brand awareness phase to “brand preference, then brand loyalty.”
“During these economic times, I am reevaluating all my partners and vendors, as I'm sure many of my colleagues are, to make sure that we remain competitive,” Repole added. “I want to make sure that Toshiba is positioned well to lead the TV market by increasing our brand exposure. We want to make sure that we have the right partner to help us with that strategy.”
Tim Dyson, CEO of Next Fifteen, which includes tech-focused firms like Text 100, said the emphasis on branding is part of the “Apple effect.” As other electronic brands work to compete against the mega-star, they turn to strong branding in the competitive space.
Also, unlike the sagging auto and housing markets, the consumer electronics sector is expected to perform nearly on par with last year, said Steve Kidera, communications coordinator for the Consumer Electronics Association. The sector is projected to generate $171 billion in US shipment revenues in 2009, down less than 1% from 2008, with most revenue coming from TV, smartphones, and mobile sales.
“Ad budgets are challenging, so PR efforts are extremely important to our industry now,” noted Repole. She added that Toshiba is considering firms ranging from small to large, and she expects to make a decision in time for the holiday season.
John Taylor, VP of public affairs and communications at LG Electronics USA, said it is reviewing PR firms as part of a “global marketing consolidation” already underway.
He declined to give further specifics on the makeup of the review, but noted it was not prompted by dissatisfaction with its existing agency. Ogilvy PR Worldwide has been LG's US AOR since 2004. The agency declined comment.
Consumer electronics companies might be able to capitalize on a unique market opportunity where consumers are budget-conscious, yet many consider consumer electronics vital to staying connected.
“Consumer electronics is in a sweet spot,” explained Larry Kamer, owner of Kamer Consulting Group and a former partner and regional director at Fleishman-Hillard's West Coast offices. “They have discovered that PR is a good spend for their dollar. They know in these times agencies [will] come back to them with high levels of innovation and cooperation that [they] may not have done before.”