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Apple's 2010 ad budget increases by $190 million, but still outpaced by new sales growth

post #1 of 4
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In fiscal 2010, Apple ramped up its ad spending growth ten times higher than in previous years, but the company's revenues growth still dropped the overall ratio of its earnings that it spends on advertising.

Apple's recently filed SEC 10-K form reports that company spent $691 million on advertising in the year that launched both iPad and the new iPhone 4.

According to a report by TechCrunch, that's a $190 million increase over the previous fiscal year, when the company spent $501 million on ads.

Apple's 2009 budget was just $15 million more than in 2008, when it spent $486 million, which in turn was only $19 million more than the $467 million that the company paid in 2007 on advertising during the year that launched the original iPhone.

However, despite the ten fold increase in ad spending over the last year, the company's tremendous increase in revenues resulted in ads accounting for only about 1% of the firm's revenues. In 2009, Apple spent about 1.37 percent of its revenues on ads, while in 2001 the report noted that Apple was spending about 5 percent of its revenues on ads.

In contrast with its peers, Apple's ad budget this year was less than Dell's and only half as much on advertising this year as Microsoft did last year. Part of the secret of Apple's relatively low ad budget must relate to the millions of dollars worth of free advertising the company enjoys whenever it invites the media to cover a special event.

Interestingly, this summer Apple announced booking $60 million worth of ad revenue from its fledgling iAd program in 2010, meaning that the company has already created a mobile ad platform capable of generating a tenth of its current global ad spend, even despite the company's dramatic increase in marketing this year.
post #2 of 4
And you'd think that Apple could reduce their ad budget, and not have it affect demand too much. I'm pretty sure they can stop the iPhone and iPad commercials, now that they're selling all they can make.
post #3 of 4
Quote:
Originally Posted by mikemikeb View Post

And you'd think that Apple could reduce their ad budget, and not have it affect demand too much. I'm pretty sure they can stop the iPhone and iPad commercials, now that they're selling all they can make.

Their ads do more than sell any specific product. They create a marketing image. They make people like Apple in general, whether they want the specific product or not.
post #4 of 4
I have known many Marketing Managers over the years. They all fight tooth and nail to keep their funding every year because the corporate guys always want to cut marketing dollars first. Imagine this guy getting a $190 million bump in his budget. Oh yeah and on a percentage of business basis that is a decrease in funding year over year. This is the definition of heaven for marketing folks!
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