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Apple's yearly ad budget rises past $500 million

updated 09:25 pm EDT, Wed October 28, 2009

Spending still modest compared to competitors

Apple's ad budget for its 2009 fiscal year surpassed $500 million for the first time, as noted in the company's Form 10-K filing with the SEC. Spending from 2008 was closer to $486 million, while the 2007 budget was approximately $467 million. According to Fortune, the Mac maker's marketing spending is still modest compared to the $1.4 billion spent by Microsoft or the $811 million dished out by Dell.

Despite the increases in Apple's marketing spending, the ratio between ad output and revenue has seen a sharp decline. Going back to 2001, the company was spending 5 percent of its revenue on ads. As the company keeps breaking its own sales records, even the half billion in 2009 ad spending only represents 1.37 percent of revenue for the fiscal year.

A recent Interbrand report placed Apple as the 20th strongest global brand. The study included companies from a wide range of industries, with the Mac maker climbing 12 percent in perceived value to $15.4 billion. Meanwhile, competitors such as Microsoft, Intel and Dell each saw value declines ranging from 2 to 12 percent. A MillwardBrown comparison ranked Apple at 6th place, with a consideration for social impact as well as actual income.

The company has continued a long series of "Get a Mac" ads that promote its own systems while directly bashing Windows. Three separate ads were launched alongside the Windows 7 launch, with each suggesting customers would be better off switching from XP or Vista to Mac instead of Microsoft's latest OS.

Many analysts have praised Apple for maintaining strong marketing across the entire line of products including Macs, iPods and the iPhone. High rankings in customer satisfaction and quality surveys are said to contribute to free word-of-mouth advertising, while Apple Stores provide a venue for the company's employees to directly engage potential customers.



By Electronista Staff
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  1. DanielSw

    Fresh-Faced Recruit

    Joined: Aug 2009

    +5

    Generally rising statistics is the best indicator

    Advertising contributes to Apple's overall success.

    I'd like to know how they verify the effectiveness of the "Get a Mac" ad series--not to challenge its validity, but to understand how such a thing is evaluated.

  1. Foe Hammer

    Fresh-Faced Recruit

    Joined: Feb 2005

    +2

    Quality On Multiple Fronts

    While I don't know how they evaluate or verify the effectiveness of their ads per se, it's clear that with great ads for great products and a great shopping experience (be it online or in person) a company doesn't need to carpet bomb the world with its advertising to be extremely successful. To a great degree, the products become advertisements for themselves and word-of-mouth becomes the advertising you just can't buy at any price. MS, Dell, HP, etc. would KILL to get the media coverage that Apple does which in turn saves big bucks on advertising as well. (It's not that tough, guys: just go make great, innovative products that last and that people want. Well, OK. For you it IS tough.)

    It still amazes me, after all these years, how many devout PCphiles answer a friend's questions of "What PC should I buy?" with resignation in their voices ("Go look around at Best Buy, but in the end you're probably just better off getting an X" where X is Dell, HP, or whatever the PCphile figures will cause the least amount of help-me-with-my-computer pain should their friend follow their advice.

    I can't begin to tell you how many unsolicited Dell catalogs I've thrown out over the years, but at least that explains where a fraction of that extra $300 million is going. And don't get me going on MS' Win 7 advertising (I wanted my computer to be "simpler"? Imagine that. Welcome to 1984, MS.)

    Sorry MS, sorry Dell, sorry HP, sorry all of you PC makers, but it doesn't matter how much you advertise. Until you make those great, innovative products that I absolutely have to have, just can't live without, and work seamlessly by themselves and together, PCs will always be computers I use for free at work and Macs will always be computers worth paying for to own.

  1. cwsmith

    Fresh-Faced Recruit

    Joined: Aug 2007

    +3

    Effective advertising?

    Quick, name me a Dell ad from this year. Anyone? ... C'mon, anybody at all? $811 million in advertising doesn't do Dell any good if it's ineffective.

    The "Get a Mac" campaign, love it or hate it, is memorable. It's the most effective campaign Apple has run in decades.

    Quick, anyone remember the Macintosh Classic ad? The one with the motorcycle? ... From 1991?

    Again, anybody?

  1. climacs

    Forum Regular

    Joined: Sep 2001

    +3

    @cwsmith

    The last Dell ad I remember was, 'dude you're getting a Dell'. That was, what, 8 or 9 years ago?

    I was talking with a non-computer-savvy friend of mine while watching "Broken Promises" on TV (he thought it was hilarious and spot-on). He mentioned that until recently, one never saw as many Windows commercials as one sees for the Mac. I pointed out that most people do not buy Windows, they buy a PC with Windows pre-installed.

    And that's the problem with Windows and Microsoft. You are not their primary customer, even though you are the end user. For years, Windows was 'sold' by the combined efforts of Dell, Acer, HP, etc. The popularity and public image of the operating system was determined by how well the OS worked on the computer, over which MS had little to no control.

    There's nothing memorable about advertising by the major PC makers. So Apple's advertising is even more effective because the efforts of its competitors are so fragmented and weak.

  1. bjojade

    Fresh-Faced Recruit

    Joined: Jun 2007

    +2

    Here is where LESS products really helps

    Apple has a very focused product line, unlike Dell. Dell has about a thousand different models of machines, yet their sales are not THAT much higher than Apple's. It makes it easier for Apple to promote specific products

    The marketing value that Apple is getting with only 1.37% of gross revenue spent on advertising is remarkable!! Compare that to other industries. Cell phone companies (like AT&T) can spend well into the double digits on marketing efforts.

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