- Samsung Electronics reportedly audited its U.S. marketing operations, examining whether employees violated the company's policies, which led to layoffs, according a report in The Wall Street Journal, citing sources familiar with the situation.
- The internal audit focused on the dealings between marketing staff and business partners, like media companies and ad agencies. While it is common for marketers to accompany partners to events they are sponsoring, like the Super Bowl, or allow vendors to pay for meals or other perks, the dealings can be a conflict of interest. It also calls into question whether marketers are steering resources to the top-performing channels.
- Samsung also audited its ad agency partners, including Interpublic Group’s PMK-BNC and R/GA, Publicis Groupe's SA media agency and independent agency Edelman. The audit looked into the agencies operations and practices, including funding and project management.
Samsung's internal audit of its marketing team's dealings with business partners comes as there is a growing push for more transparency all around in the marketing and advertising sectors. The audit is also the latest shakeup for Samsung's marketing team, and follows the recent departures of CMO Marc Mathieu and VP of media and partnerships Jay Altschuler. The company declined to say if those moves are related to the audit, according to the Journal. Samsung also recently named a new global marketing head, Stephanie Choi, for its mobile division.
Trust and transparency are hot topics in the marketing industry, with several trade groups working on initiatives to help marketers deal with the issues. Recently, the Association of National Advertisers announced the ANA Trust Consortium, aiming to help members handle trust and transparency in the digital supply chain through best practices and industry standards. ANA also unveiled the new industry standard Data Transparency Label, designed to look like a nutritional label, to disclose source, collection and other details.
Initiatives to improve trust come as consumers demand more from brands and see most brands as not meaningful. Consumer expectation for trust, connecting brands and loyalty, increased across all product and service categories and brands by about 250% year-over-year, with consumer concern over privacy, security and brand transparency reaching a "tipping point," according to Brand Keys research.
The Samsung marketing audit also comes as smartphone sales continue to decline, dropping 4.9% in the last three months of 2018, according to International Data Corp. data included in the Journal report. Samsung reported a nearly one-third decrease in operating profit in its mobile division for the quarter ending Dec. 31.