David Blecken
Nov 19, 2009

Sony overhauls advertising budget to focus on core products

TOKYO - Sony is planning to realign its global advertising budget, worth around US$5 billion, to concentrate on a reduced number of products deemed to have strong potential in an effort to increase its competitiveness.

Sony overhauls advertising budget to focus on core products
According to a report in the Financial Times, the Japanese electronics giant has identified that it is falling behind rivals such as Samsung by spreading its marketing budget thinly across a range of categories, rather than investing heavily to build specific products.

“It’s a good strategy. It’s not rocket science,” commented Rob Campbell, creative brand strategist and managing partner at branding consultancy Sunshine. But Campbell, who worked with Sony during his time at Y&R, said the main challenge would be defining which areas to concentrate on. “I do believe there’s a real opportunity. The bigger issue is the process by which they will identify which brands get the most communications. This will have a huge knock-on effect within the organisation as to which brands receive R&D budgets and are able to develop and grow.”

Other observers were less optimistic. One senior executive who has worked with Sony noted that despite Howard Stringer’s direction, the organisation remained “very political” and said that this would weaken the effectiveness of any strategic shift.

Nobuhiko Yamamoto, managing director of M&C Saatchi Tokyo, agreed that the strategy was a step in the right direction, but stated that the main factor holding Sony back was lack of innovation. “For more than a decade, it has not launched anything new,” Yamamoto said, pointing to an overall loss of brand equity, or “Sonyness”. Rather than continuing to spend heavily on advertising, the company should draw on the ethos of its founder, Akio Morita, and focus on creating new products, Yamamoto said.

Sony is reportedly looking to boost investment in 3D television, among other areas. Gregory Birge, managing director of F5 Digital Consulting, said this was a mistake, pointing to a general lack of consumer interest in the technology. Birge argued that consumers were not necessarily seeking entirely new products, but "better integration" of existing technology within daily life. He added that Blu-ray remained an important area, and that Sony urgently needed to make up ground on Pioneer, which was outshining the brand with "better quality" players.

Last month, the firm appointed Euro RSCG to handle creative duties for its Vaio computer brand.

Meanwhile, in India Sony Entertainment Television has called for a review of its media account. 

It is understood that the general entertainment channel from Multi Screen Media, which has been steadily building ratings, is now looking for a fresh media strategy.

MediaCom is currently the media agency for the channel. The agencies participating in the pitch include OMD, Carat and MediaCom.

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