LG Ready for Its Close-up

LG has racked up U.S. market share for its mobile phones by putting its ego aside and letting carriers like Verizon and AT&T get the glory, but a new high-profile push aims to inject some star power into the brand.
LG, working with Young & Rubicam, is launching its largest-yet campaign in the U.S. and linking with Justin Timberlake, Heidi Klum and Hayden Panettiere as well Paramount’s Transformers: Revenge of the Fallen in an attempt to raise its profile.
The effort includes two focused campaigns. The LG Xenon phone, aimed at social networking-happy Gen Yers, will get a TV, print and online campaign featuring 19 year-old Heroes star Panettiere and placement in Timberlake’s MTV series The Phone. That effort breaks this week.
Meanwhile, a push begins next month for the Rumor2 phone, targeted at “style conscious teens and young adults.” It will be highlighted in a campaign featuring supermodel and Project Runway host Heidi Klum, who designed custom backplates for the phone. The Transformers  tie-in, hitting along with the film in June, is part of a partnership LG announced with Paramount on April 1 that includes placement in the film for its Versa phone. LG had a similar deal last year for Paramount’s Iron Man.
The deals were meant to underscore LG’s brand positioning, which Ehtisham Rabbani, the brand’s vp of product strategy and marketing, said is all about self-expression. “The big difference for us going forward is you’ll see a greater emphasis on using specific models to highlight the brand as a whole,” said Rabbani. “The idea is how can you best help the consumer express themselves? That’s the evolution of where we’re heading.” Rabbani said he believed it was difficult to create a strong bond with consumers with one overarching message.
The campaign comes as the U.S. phone handset market has changed radically over the past few years. LG now has about 22 percent market share in units. LG and Samsung now control more than 50 percent of the market.

Iain Gillott, founder and CEO of iGillott Research in Austin, Texas, said the two companies’ success came from working closely with wireless service providers. “What Samsung and LG did a few years ago was they looked at the market and said the big three [Motorola, Nokia and Sony Ericsson] have got this thing kind of stitched up,” said Gillott. “So they went to the operators and said, ‘What do you want?’”
That often resulted in better phones, but the downside was that the carrier would sometimes overshadow the handset maker. For instance, LG’s 2007 launch of the Chocolate phone was often referred to as the “Verizon Chocolate” because of an exclusive deal with the carrier.
But now, as LG seeks a higher profile, it faces fewer competitors on the low end, at least. Apple’s iPhone and Research in Motion’s BlackBerry may get more buzz, but each have only about 3 percent of the U.S. market. While those two brands outspent LG in 2008, with outlays of $62 million and $106 million, respectively, per Nielsen, LG’s $43 million spend trumped Nokia’s $7 million and Motorola’s $14 million. (Samsung spent $81 million. The figures don’t include online spending.)
Roger Entner, head of telecom research for the Nielsen Co. (owner of Brandweek) said that by boosting its advertising, LG is in effect saying that the brand has arrived. “It’s really one of these Cinderella stories. At the beginning of the decade no one knew it and now it’s a highly regarded phone company,” he said. “But they haven’t done a lot of advertising on their own, so it really shows the maturity of the company.”