Google is an advertising cheapskate!

What is the most valuable brand in the world?  Google_logo_2Google is the number one brand in the world with an estimated value of $66 billion according consulting firm Millward Brown Optimor. 
This got me thinking… How did Google become the most valuable brand in the world in just a short nine years?  As the Founder of a consumer-focused internet company, I find this question very interesting.  Conventional wisdom would suggest that Google must spend billions of dollars in advertising every year to accomplish such an impressive feat.

Well after a bit of research, one thing becomes clear… Google is an advertising cheapskate!

…and "that’s a good thing" as Martha Stewart likes to say. 

There are a whole bunch of factors that have combined to drive Google’s amazing success, but an aggressive advertising spend is not one of them.  To put it into perspective for you, let me first share with you how much Google’s big competitors spent on marketing and sales last year. 

In the last fiscal year, Microsoft spent $11.5 billion on marketing and sales. 
Yahoo! spent $1.3 billion. 
eBay spent $871 million.

Google?  Well Google spent a paltry $188 million on marketing and sales in 2006.  To me, this is an absolutely amazing stat.  A $66 billion brand on the back of less than $200 million in annual marketing expenses in less than one decade!  In addition, what Google does spend on advertising is largely focused on finding great people to come work at Google.  That is also pretty interesting.

All of this goes to show you that you can build a great world-wide brand by having great products, by obsessively leveraging word-of-mouth strategies/tactics, by getting yourself in the right place in the right food chain, and by creatively finding ways to leverage the network effects and viral marketing attributes of your business (if there are any).  Few of us will ever be lucky enough or good enough to achieve such momentous success, but Google has proven that it is in fact possible to build a great brand on a cheapskate budget!

The following article more specifically details Google’s skimpy ad budgets:
"Google Skimps On Its Own Advertising" by Michael Liedtke

Visit WOMMA or subscribe to WOMMA’s blogs for more information on Word-of-Mouth marketing.  The Word of Mouth Marketing Association (WOMMA) was founded by my friend, marketing guru, and author, Andy Sernovitz.

2 thoughts on “Google is an advertising cheapskate!

  1. Aparna

    Hi Steve,
    Love reading your blogs. I particularly liked reading this post…Google the advertizing cheapskate. This is great food for thought. Would love to see your perspective on this year’s apparent great start to the shopping season. How does the cyclical nature of this seasonal shopping impact buySafe? Has the general insecurity in the economy created any opportunities for buySAFE?
    Aparna

  2. Web Host FAQ

    Hi, Exactly it is possible to build a great marketing strategy by focusing the core point of the market. It is surprising to me that Google world class Search Engine spends very minimal amount of their earning in the advertisement and is even able to capture the market. More to learn from them.

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