Most Frugal in Advertising Spending Internet Company – Google

Whenever somebody mentions of Google, you must be easily thought and associated Google with search engine, and advertising. Indeed this is correct and valid opinion on Google, which provides most popular, widely used and reliable search engine service, and online advertising spaces to more than 300,000 advertisers worldwide. In fact, Google has earned more than $30 billion (as of 2007) in advertising revenue from advertisers depending on its online marketing platform since 2001. However, Google is also the most frugal spender in advertising expenses to promote itself among various Internet and technology companies.

According to AP report (dead link), Google spent just 8 percents of its revenue or $188 million in 2006, comparing with others which has the percentage ratio double digit.

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.

What make Google ads spending more unique is that most of ads Google bought were to recruit employees (the company has hired more than 11,000 in the past three years). On a few occasions, Google also has bought ads to highlight lesser-known products, such as a free telephone directory service, GOOG-411, recently featured on billboards in the San Francisco Bay area and rural parts of New York.

Then how does Google become so famous? Your mouth and of course, excellent products!