Apple annual ad spend is less than 1% of last year's sales. While other electronics makers are similarly thrifty in marketing, the industry is beginning to ramp up its advertising, touting new types of products in new ways, writes Neil Parmar of The National.
It has been years since Apple (AAPL) featured the hugely successful rock band U2 in its advertisements, yet the most valuable company in the world has continued finding ways to pour millions of dollars into advertising campaigns to hype its latest iPhones, iPads, and iPods.
Make that hundreds of millions of dollars.
Last year, Apple spent $933 million on global marketing efforts, which was up 35% over 2010 and nearly double the $501 million it spent in 2009. Even so, some analysts say last year's figure is not especially high—relative to Apple's overall sales, that is.
"Apple spent less than 1% of sales last year on advertising," an analysis conducted by YCharts, a financial data provider, found this summer. "And its sales growth has been far outpacing its advertising budget."
Apple is by no means alone. It turns out some of the biggest consumer electronics makers around the world spend similarly small fractions of their total sales on advertising:
- Microsoft (MSFT) spent $1.6 to $1.9 billion on advertising during its three most recent fiscal years, which is only 2.2% to 2.7% of its sales from software, video-game consoles, and other products and services.
- Computer maker Dell (DELL) invested $860 million in its last fiscal year, amounting to a mere 1.3% of its overall sales, according to data from YCharts.
- Samsung is expected to more than double its advertising budget in the United States this year to promote its SIII smartphone, compared with the $142 million it spent to hype all of its Galaxy products last year.
"The smaller players can't even compete, simply thinking from the marketing level, with some of these giants," says Dominique Bonte, a vice president and the group director at ABI Research, which analyzes tech trends.
Neither industry groups, such as the Consumer Electronics Association, nor individual tech analysts track the total amount spent across all device makers. But sector experts say they have noticed a dramatic shift in the kinds of electronics dominating billboards, television slots, and online advertising campaigns today compared with just a couple of years ago.