Google’s Spending on Traditional Advertising Grows Four-Fold to $213 Million
After years of touting the superiority of online advertising, Google Inc. GOOG +0.47% is taking a decidedly different approach to promote itself in areas where its rivals dominate.
After years of touting the superiority of online advertising, Google is spending more of its own cash to promote itself through traditional ads. Amir Efrati has details on The News Hub. Photo: Reuters
The Internet company is spending big sums on TV, magazine and newspaper ads to promote new services, including its Google+ social network and Chrome Web browser. Google’s ad-spending as a percentage of revenue is now almost on par with rival technology companies such as Apple Inc., AAPL +1.24% Microsoft Corp. MSFT +0.11% and Yahoo Inc., YHOO -0.13% according to new data.
Last year, Google spent about $213 million to advertise its own products in the U.S., nearly quadrupling the $56 million spent in 2010, according to estimates from Kantar Media, a unit of WPP PLC. WPPGY -1.33% The firm didn’t have data for spending outside the U.S.
“This is a sign of good old- fashioned competition,” said David Cohen, chief media officer at Universal McCann, the media-buying unit of InterPublic Group of Cos. “While Google has a dominant footprint in search, they have work to do in other areas to gain market share.”
Rob Shilkin, a Google spokesman, declined to comment specifically about the company’s ad strategy. “Our focus is on uncovering and telling stories about our products, our users and the magic they both create. The discussion about how to reach people across different media is a much later conversation.”
Online ads still represented the majority of Google’s spending, Kantar estimated. But of its non-online ad spend, Google shelled out $70 million on TV ads, compared with just $6 million a year earlier.
To promote Google+, Google spent an estimated $12 million, including on a TV ad featuring The Muppets who were seen using the social network’s “hangout” video chat and singing “Under Pressure,” the Queen and David Bowie hit.
That commercial ran during the Academy Awards show in February.
Google’s ad spending last year represented 1.2% of its U.S. revenue of $17.6 billion, compared with 1.5% for both Microsoft and Apple, based on data from Kantar.
One of Google’s TV spots promoting its Chrome Web browser features Lady Gaga and her fans.
For Google, pursuing TV ads may seem counterintuitive. The company built its $40 billion business by developing an auction system that allows the market to determine the price of an ad, only charging advertisers when someone clicks on it.