See! See! Apple is the Marketing Bully

Last September, when Microsoft first launched its “I’m a PC” ads, we pointed out that Apple was a marketing behemoth, and Microsoft was the nerdy engineering company:

 We think of Apple as a products company, and Microsoft as a business behemoth, but Apple is the company that floods the airwaves with ads while Microsoft is mostly a company of software engineers. Every time I’m about to buy an Airbook, I wonder how much of its cost is its carefully constructed image.

An astute commenter on that post, Mark Zims of Toronto, compared the actual spending on sales & marketing for both Apple and Dell: 12% of revenue for both.

We also noted that the ad would be difficult for Apple to one-up. When Apple finally did take it shot, a month later, it complained about Microsoft’s ad spending, prompting TechCrunch’s Erick Schonfeld to complain that Apple spends plenty of money on advertising too.

Last night, courtesy of Lindsay Blakeley, TechCrunch reported on the precise amount Apple spends on advertising alone, $438 million (13% of total sales & GA expenses) in FY07 compared to the $300 million Microsoft spent marketing Windows Vista.  The comparison is slightly unfair, because Apple also sells iPhones, iPods and Macs, not just an operating system, but Windows also has far more sales.

No matter how you slice it, our original point still seems worthwhile: Apple is more of a marketing company than Microsoft, by a long shot.

Discussion

  • http://www.redfin.com Sasha Aickin

    Glenn,

    Sorry, but you’re just off-track here; the numbers don’t support your argument at all. As several folks pointed out, and the TechCrunch article updated, Microsoft’s total ad budget was $1.2 billion in FY08. Apple’s was $486 million.

    If we compare revenues in FY08 (Oct 1, 2007 – Sept 30, 2008):

    Microsoft: $61.72 billion
    Apple: $32.47 billion

    So Apple had 52% of Microsoft’s revenues with about 41% of its ad budget. On what possible planet does that make them the marketing bully?

  • http://www.redfin.com Sasha Aickin

    It occurred to me after I posted that you might have been taking the tack of looking at how much money each company spent on ads as a percentage of its overall spending, so I tried to take a look at that as well. If we take each company’s FY08 revenues minus net income, we get:

    Microsoft: $42.7 billion
    Apple: $27.6 billion

    So in that comparison, Apple spent 65% of what Microsoft spent overall, but only 41% of what Microsoft spent on ads. It still seems like Microsoft is the more ad-focused company, or am I missing something?

  • altar555

    Apple’s yearly advertising budget is 1.5% of its revenue (486/32,479). Microsoft’s yearly advertising budget is 2% of its revenue (1,200/60,420). Who is the marketing bully?

  • altar555

    Oh BTW, when Apple is spending money on advertising, it seems to be quite effective. Apple’s business is growing, people keep talking about the iPhone, the new Macs, yadda yadda.

    On the other hand, Microsoft is spending $300 million just to change Vista’s image. Do you think this ad campaign had a sizable effect on Microsoft’s revenue?

  • http://www.mikestewart.ca Downtown Vancouver Realtor Mike Stewart

    I agree with the perception that Microsoft are a bunch of computer engineers, but I would respectfully disagree with Apple being the market bully. Microsoft is the market bully. They have consistently designed their products to ensure their platforms and applications are central to the world of computing even to the detriment of advances and progress. If that isn’t a bully I don’t know what is. And I am lifelong PC guy (soon to be not based on my latest PC experience)

  • altar555

    Microsoft’s newest ad campaign got me thinking again about your post. How many different ad campaigns did they run recently?

    -Windows Vista: The “Wow” starts now
    -The Mojave Experiment
    -Bill Gates with Jerry Seinfeld
    -”I’m a PC” ad campaign
    -Yet another new campaign (Laura shopping at Best Buy)