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Google Advertising

Alex Christie

17 October 2007

The Google story has been one of phenomenal success. (They’ve sold more than
$30 billion in advertising since 2001). The amazing thing is that this has been
achieved without buying traditionally expensive ad campaigns on television or
radio or in print.

Back in the dot-com boom era in 1999 and 2000 internet entrepreneurs routinely
spent ridiculous amounts of money on advertising campaigns including very
expensive Super Bowl advertising. Google on the other handed has avoided all of
this and their success has largely come down to word-of-mouth exposure and the
media’s obsessive coverage of its every move and some very clever PR tactics.
Google attracted headlines in Sept by funding a $30 million race to the
moon
.

While Google’s main competitors (Microsoft and Yahoo) spend more than 20
percent of their annual revenues on sales and marketing, Google spent 8 percent
of its revenue on sales and marketing in 2006. In 2006 Google spent $188 million
on advertising and promotions — roughly the same amount Microsoft spends every
two months.

Their attitude to advertising has freed up cash for new staff (the company
has hired more than 11,000 in the past three years), computing hardware and
other resources that fuel Google’s search engine. Obviously all this cash has
also kept the shareholders very happy.

The company believes its approach to advertising will become more common as
major advertisers learn to deploy technology to target consumers.

Industry experts do however seem to agree that Google may have to invest
more heavily in advertising as it branches in new directions. Google is
reportedly contemplating lending its name to a line of mobile phones and is already
is selling a suite of online software applications to businesses. Evidence has shown that ventures like those
typically rely on more conventional advertising.

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