This Associated Press article chronicles how Google has been able to build a multi-billion dollar consumer brand largely without advertising. That’s the part everybody knows. But the article also compares the annual ad spending of Google, Microsoft, Yahoo, and eBay. It points out that when Google does buy any advertising, it’s typically to recruit employees.
Citing no particular source, the article says:
While major rivals like Microsoft Corp. and Yahoo Inc. pour more than 20 percent of their annual revenue into sales and marketing, Google devoted 8 percent of its revenue to the category in 2006, spending a total of $849.5 million. Microsoft spent $11.5 billion on marketing and sales in its last fiscal year, while Yahoo spent $1.3 billion. On advertising and promotions alone, Google spent $188 million in 2006 — roughly the same amount Microsoft spends every two months.
Another Internet bellwether, online auctioneer eBay Inc., consistently earmarks 14 percent to 15 percent of its revenue for advertising. Last year, eBay spent $871 million on advertising, with much of the money winding up in Google’s wallet. The Coca-Cola Co., the brand ranked first in the Interbrand survey, spent more than $2.5 billion on advertising last year.
While Google did some online advertising for its Checkout payment service last year, and has sponsored segments of local public radio in the San Francisco Bay Area and public television, the Goog411 ads that have been popping up on the U.S. East and West Coasts represent an interesting departure for the company. They may suggest more consumer marketing to come in key, competitive areas — especially mobile services.