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What Top Brands Spend on Advertising

Want to know what top companies like Microsoft, Google, and even Coca-Cola spend on advertising? Here’s a breakdown by percent of revenues in 2006, starting with the most first (according to this article):

  1. Microsoft – more than 20 percent of their annual revenue or $11.5 billion
  2. Coca-Cola – more than $2.5 billion
  3. Yahoo – more than 20 percent of their annual revenue or $1.3 billion
  4. eBay – 14 percent to 15 percent of its revenue – which was $871 million, much of that to advertise on Google
  5. Google – In the millions rather than billions of dollars – with $188 million
  6. Starbucks – $95 million

I like the side-by-side comparison between online and offline brands. And from the stats, eBay spends a lot buying ads on Google (though less than they used to) while Google spends a lot on recruiting employees. Google has spent on advertising, like buying billboards for GOOG-411 – their free directory service that I use quite regularly. But Google spends considerably less because their approach is to turn out great products instead of great ads.

Offline, Starbucks takes a similar approach. They spent just $95 million on advertising last year, which is 49 percent less than Google. But they built most of their business on their branding and by creating happy customers and making the brand part of a culture.

  • http://www.marketingpilgrim.com Andy Beal

    I wonder how much Google spent in advertising between launch and 2005? I wouldn’t be shocked if it was less than what they spent in 2006.

  • http://www.watersubject.com Water Portal

    Sometimes Google advertises its services within its Adsense Network, is that counted as a spending or all 188 millions were spent on billboards?
    (as, I guess, there is no other place Google run ads)

  • http://andybeard.eu/ Andy Beard

    Google actually get small free adverts on every blog, and you might have to take into consideration revenue sharing as an advertising medium.

  • http://www.thevanblog.com Steven Bradley

    It’s interesting to compare Google’s spend to Microsoft’s and Yahoo’s. Who has the most market share again?

    In fairness to Microsoft and Yahoo a lot of that advertising is probably for things other than search. I’d be interested in seeing the money all three spent specifically advertising search.

  • http://www.audiomecca.com/music-software/ Music Software

    Advertising spends for products have to be much higher in percentage terms than service organisations. So, to compare Starbucks’ spend with the first two is illogical. On the assumption that we can call the other three in the service category, comparing to each other is more logical than with any or all of the first two and the last. Starbucks should really be compared with Mcdonalds, KFC etc.

  • http://searchistheos.blogspot.com Arnaud Fischer

    Very interesting. Any sense for the online brand and promotion portion of these budgets? Thanks; fully appreciated insights.

    -arnaud

  • http://www.isgooglerelevant.com Relevance

    Note the source article’s title: “Google skimps on its own advertising.” Web advertisers who use AdWords need to recognize that their ad spend is paying for a co-op ad at best, and at worst, is simply branding for the company to whom they are paying their ad dollars (see the comments in the source article about eBay). The value of ads on Google should be reframed within that context. I would suggest that the cost of their engineering staff should be added to the cost of their advertising, as the site maintenance is part of the “show.” Additionally, they have been riding a wave of publicity to which this article merely adds. It is unfair to suggest that other companies should do, or even can do, what Google has done. Google is merely an ad platform that, right now, dominates its sector.

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  • http://www.bogaziciperde.com Perde

    Starbucks spent just $95 million on advertising last year, which is 49 percent less than Google.
    Very interesting indeed. Wow!

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  • Ashley

    you guys are gay.

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  • Glen MacDonald

    It is certainly interesting to know how much is spent on advertising by different companies. Of course, each one is quite different. Google makes so much money from its ubiquitous search engine and ad network that most of its other products are free, so don’t need much advertising. While Microsoft, for example, has a lot of products in very competitive areas: databases, cloud services, application development, office software, operating systems and so on. (And Starbucks has lots of competition!) That’s when you need a good product and good marketing.