An interesting article posted by the associated press compares the advertising spends of major search engines with some interesting results. It appears Google spends much less on advertising than its counterparts, Yahoo! and Microsoft.
While Google takes billions from companies and websites advertising via its AdWords platform, the search engine itself is frugal in promoting their own products. The company spent just 8% of revenue on advertising, compared with over 20% from Yahoo! and Microsoft in 2006.
Through constant innovation and product improvement, Google has managed to build their brand without spending a huge amount on traditional advertising.
“It has been an advantage because it has helped keep them cool. They have zigged while everyone else has been zagging.” said Mark Hughes, author of the book “Buzzmarketing,”
Many experts believe that Google’s view on advertising has been adopted by sites like MySpace, FaceBook and YouTube, allowing them to increase market share with little or no advertising.
“That’s a change from the dot-com boom era in 1999 and 2000 when Internet entrepreneurs went broke paying for Super Bowl ads and other theatrics in a mostly fruitless effort to stand out from the rest of the crowd.” claims the article.
As Google’s rivals spend millions trying to play catch-up, it’s expected that Google will increase their advertising spend in coming years. This could be the key for the company to dominate new search markets such as local and mobile.