Get the Original: Because Steve Says So T-Shirt
Your one stop Mac spot

Warning: file() [function.file]: php_network_getaddresses: getaddrinfo failed: Name or service not known in /homepages/30/d186991128/htdocs/MacBlogzStaging/wp-content/themes/macblogz/header.php on line 101

Warning: file(http://download.finance.yahoo.com/d/quotes.csv?s=AAPL&f=sl1d1t1c1ohgv&e=.csv) [function.file]: failed to open stream: Success in /homepages/30/d186991128/htdocs/MacBlogzStaging/wp-content/themes/macblogz/header.php on line 101
AAPL: 0.00 ( . )

Blog

Apple’s Entire Ad Budget: $486M, Compared to Vista’s $300M

In its 2008 fiscal year, Apple’s entire advertising budget was $486 million. Comparatively, Microsoft’s entire Vista advertising budget was $300 million. While Microsoft is a much bigger company, how effective have both campaigns really been?

Lindsay Blakely over at Bnet has dug up some numbers regarding Apple’s entire annual advertising budget, and when compared to Microsoft’s annual ad budget, it’s a rather surprising find.

According to Apple’s recent 10-k filing, the company spent $486 Million on advertising in fiscal year 2008. This may perhaps be more than most people would have estimated, however Apple’s push with Leopard and the iPhone 3G has been massive. Not to mention how hard they’ve been touting the iPod touch as a gaming device. Comparatively, Microsoft’s “Vista only” advertising budget was $300 million, while they spent $1.3 billion when combined with everything else (Xbox, Office, Windows, enterprise).

It’s important to point out that Microsoft is a much bigger company. When comparing these advertising budgets, Microsoft’s $300 million was specifically allocated towards advertising Windows Vista, which is in direct competition with Mac OS X. Apple’s $486 million was spent on advertising everything the company has to offer. Which comparatively cost Microsoft around $1.3 billion.

TechCrunch’s Erick Schonfeld seems shocked that Apple spends so much money on advertising. However when marketing products such as OS X, the iPhone 3G and the iPod touch, $486 million doesn’t seem like an exorbitant amount of money. The $300 million Microsoft spent on trying to “change Vista’s image,” seems like an astronomical amount of money to spend on a campaign which has had very little effect in actually moving copies of Vista. The difference between both approaches garners varying results among consumers. A quarter into Leopard’s launch, 19% of Apple customers had installed the new OS. More than a year after Microsoft released Vista, only 13% of its customers had upgraded. Microsoft has even had to deal with reissuing copies of Windows XP, Vista’s successor, because of the dissatisfaction with Vista. A problem Apple has never had to face. Arguably, Apple’s customer base are the most devoted and loyal, however those same customers would be the first to point out flaws in Apple’s products.


Apple’s commercial titled “Bean Counter”

Both advertising campaigns have their flaws. While some may find Apple’s commercials to be childish and too aggressive, focusing more on thrashing Vista, then touting OS X. Others may find Microsoft’s commercials to be completely irrelevant and totally out of touch.


Microsoft’s commercial titled “New Family” with Jerry Seinfeld and Bill Gates.

When comparing both advertising campaigns and budgets to each other, it’s difficult to determine which one is more “effective.” Both attract eyeballs, which is essentially any advertising campaign’s ultimate goal. Whether you love the PC commercials, love the Mac commercials, or don’t care either way, the campaigns were a big part of technology culture this year.

Comments [16]

16 Comments to “Apple’s Entire Ad Budget: $486M, Compared to Vista’s $300M”

iAirmanshirk @ November 22nd, 2008 at 10:26 pm
 Add karma Subtract karma  +0

uhm yeah but apple is an entire company, vista is one product of a company. Which ads completely failed BTW

Reply

Aviv @ November 22nd, 2008 at 10:38 pm
 Add karma Subtract karma  --1

I don’t know if either ad campaign “failed” in particular. None of the campaigns actually mentioned technical features, or showed technological innovation. Microsoft focused on strengthening the Windows brand, and changing the way people perceived Vista, while Apple focused on slamming Microsoft for taking that approach. Each campaign had a different goal.

Reply

Ryan @ December 4th, 2008 at 12:23 pm
 Add karma Subtract karma  +0

I would say that the Apple ads failed. The more I see of them, the more I absolutely hate the company and the more adamant I am to never buy any of their products. Any reasonable person out there would come to the same conclusion: Mac is the John McCain of computers. They advertise nothing that they have to offer, their whole strategy is about creating strawmen and attacking their opponent for flaws that they fabricated themselves.
PCs ads, by contrast, were all damage control. Just to show that the stereotype that Mac was trying to shove down people’s throats was BS, and that many different kinds of people use PCs for many different things. I don’t know how successful this campaign was. I already saw the obvious truth in it before I ever saw the first commercial, but maybe someone else out there was convinced. At least they didn’t go all negative or resort to spreading total bald-faced lies and being snooty and condescending… so even if they didn’t win customers, I doubt that they pushed any away the way that Mac ads do. In that respect, clearly Microsoft’s campaign was more successful.

Reply

zedTREE @ November 22nd, 2008 at 10:30 pm
 Add karma Subtract karma  +1

that’s the thing. vista spent $300 million on ONE product. Apple spent nearly half a billion on the whole company’s advertising. Apple’s were way better commercials and ads and they just made more sense. they didn’t need to experiment, so they knew it would work. mcsft was taking a big gamble… they didn’t win IMHO.

@iAirmanshirk: vista ads FAILED horribly. apple stuck with the routine and it worked fine.

Reply

iAirmanshirk @ November 23rd, 2008 at 6:46 am
 Add karma Subtract karma  +0

agreed. thats what i said

Reply

pete @ November 22nd, 2008 at 11:01 pm
 Add karma Subtract karma  +1

I think it’s sick that Microsoft would spend so much money on “Fixing” vista when they could’ve stayed entirely quiet and rewrote windows from the ground up. This could’ve brought another truly stable OS to the market, other than OS X (sorry Linux) — and there could have been some real competition. But now, Ballmer insisted on backtracking and instead of Windows 7 being something promising, it’s more of the same :(

Microsoft is going to find themselves in the same situation five years from now. Take a lesson Redmond. Windows needs to be redone. Start over. Square one. Registry and all. Sorry to tell you the harsh honest truth. But, that’s the way it is. Until that happens, there’s no competition. OS X is too far advanced.

Reply

aaron @ November 24th, 2008 at 6:22 am
 Add karma Subtract karma  +1

The numbers in the article are not being given with proper context. Microsoft’s Windows business is bigger than Apple’s entire business in terms of both revenue and profit. This article should be saying Microsoft spends 38% less than Apple on compareable revenue. Another way to compare the marketing spend is by unit sales. Microspft outsells Apple 30-to1 so they could effectively spend 30x Apple’s marketing budget in actual dollars and still be equal as a percent of sales.

Overall, comparing a product marketing budget with a company marketing budget is silly and uninformative. They share almost nothing in common to be compared against. .

Reply

Aviv @ November 24th, 2008 at 10:09 am
 Add karma Subtract karma  +0

@Aaron: The reason I compared the two pieces of data is because the comparison is actually pretty interesting. Apple sent half a billion dollars on their entire marketing campaign. Micorosft, nearly $1.3 billion. So, those numbers may not seem too interesting to most, or some may think Apple is the one who is overspending. However, which ads are more effective? Is Microsoft gaining market share and moving copies of Vista? Have they been successful rebranding Vista? Is Leopard gaining market share? Is Apple selling macs and iPhones? The numbers really don’t do justice to the comparison itself until you take a second to think about what products are being marketed.

Reply

aaron @ November 25th, 2008 at 2:13 am
 Add karma Subtract karma  +0

These are all great questions you just posted – why did you did not answer any of them in your article?

While I cannot find any data for the post-seinfield and I’m a PC ads, Microsoft has definately been “moving copies of Vista”. In June, 2007, it had 4.54% market share. In June, 2008, it had reached 16.14% – more than a 355% gain. (Source PCWorld)

Writing that one tech company spends more on marketing than other tech company with overlapping products does not give any real perspective. Here is a statement with more perspective: Microsoft is spending $300M to advertise their Windows Vista (140M users), Windows Live (45M users), and Windows Mobile (18M users) products – Apple marketing cost 62% more to attract a smaller audience, with less revenue, and less profits.

Reply

Aviv @ November 25th, 2008 at 10:58 am
 Add karma Subtract karma  +0

@Aaron: That’s just it Aaron. You’re just relying on market share for your conclusions. Microsoft forces its products on to people. Windows is pre-installed onto many more machines than Mac OS X. How much do you think Apple would spend if it had that market share?

I believe we should ignore market share for a moment and try and focus on how well the campaigns worked against each other.

You have to understand, if we keep relying on market share (for stats) then we can’t even draw ANY comparisons the two companies. Apple isn’t even in the same league as Microsoft when it comes to installed base. The market share and users (per million) side of the argument has to be set aside for some conversations or else it simply won’t progress.

Reply

aaron @ November 25th, 2008 at 2:29 pm
 Add karma Subtract karma  +0

Aviv, I appreciate your responses and enjoy a health discussion of this topic.

I agree that pivoting only off of market share is not a complete story either. There are several valueable data points to use when drawing conclusions around marketing spend. spend/units sold, spend/margin profit, spend/positive perspection increase. Even stats like spend/commercial minutes viewed, spend/repeat views, spend/youtube views…etc

The problem I found in your approach to this article is you drew a major conclusion (apple is better/more efficient at advertising) without solid data to get your readers to that point.

Apple might or might not have better marketing – but give me something to base that off of outside of the fact that a bigger company spends a lot on marketing a bigger product. Does apple have a higher viewer count per ad than msft on viral sites? Does apple have a higher online video completion rate per user than msft – where people watch the whole ad vs only half)? Do they have a higher embedding rate per ad than msft – people embedding the video on their own blog?

Apple could be a ‘yes’ to many of these questions – and when/if you provide that type of data you can more accurately draw a conclusion with your readers that based on this measurement Apple is better at marketing than microsoft.

Side note: Microsoft does not force its Windows on to people. HP and Dell only sell Windows because Apple prehibits them from licensing OSX. Apple is causing that not Microsoft or even the computer manufactures. Plus anyone with a web browser can buy an apple from their online store, or go into an Apple store at any major mall, or go into the largest eletronic retailer, Bestbuy, and purchase a Mac. If someone does not by a mac computer it is only because they did not want an Apple or that Apple did not want them.

Reply

Aviv @ November 25th, 2008 at 2:34 pm
 Add karma Subtract karma  +0

Actually, see here: http://tinyurl.com/6d2kc6 :) — The comparison between viral impressions is pretty interesting within itself.

“A quarter into Leopard’s launch, 19% of Apple customers had installed the new OS. More than a year after Microsoft released Vista, only 13% of its customers had upgraded. Microsoft has even had to deal with reissuing copies of Windows XP, Vista’s successor, because of the dissatisfaction with Vista.” Doesn’t this measure success as well?

Reply

aaron @ November 25th, 2008 at 3:11 pm
 Add karma Subtract karma  +0

Aviv,

That is a good link but you did not mention what conclusions are you drawing from it?

The link shows that Microsoft’s 1 ad had 30% more viral views than Apple’s 3 ads combined – a straight forward comparison in Microsoft’s favor no matter how you slice it.

The other graph is more complicated because it does not control for multiple placements of apple ads on the same website. Assume a person likes the ads of Microsoft and Apple equally – what would that placement graph look like? It depends on 2 types of measurements:

1 By total placement volume: Apple is more successful because it launched a fresh set of 3 ads that allowed users to place more than one ad on their site – something they cannot do with microsoft yet. The focus of this measurement is on the overall campaign success not the individual ad.

2 By placement volume per ad: Microsoft’s 1 ad was more successful than any one of Apple’s ads recieving what looks like 20% more placements than the avg apple ad. The focus of this measurement is on the success of each ad rather than the whole campaign.

You can decide whether you prefer number 1 or 2 – but when writing the article explain how you are measuring a company’s marketing success and reference the data. If I read you article yesterday and you used method 1 to draw a conclusion that apple was better at marketing – well… I would completely agree with you (based on that measurement).

Reply

Aviv @ November 25th, 2008 at 3:13 pm
 Add karma Subtract karma  +0

Sidenote: I edited the last post out and got rid of the attention note at the top of your last comment for fluidity.

Reply

Aviv @ November 25th, 2008 at 3:15 pm
 Add karma Subtract karma  +0

I see your side of the argument, and it makes sense. It’s extremely difficult to draw conclusions based on one variable, especially when dealing with these two behemoth companies.

Which campaign do you personally think was more successful? And what do you base it on?

Reply

aaron @ November 25th, 2008 at 5:13 pm
 Add karma Subtract karma  +0

Aviv, as a new reader to your site I’m very impressed with your demonstrated engagement with your readers.

You pose a complicated question and my genuine answer is well… it depends.
Advertising is often times a venue to change a products perception and build more awareness of its value. Both Microsoft and Apple have both been, by many measures, successful in changing their brand perception through their commercial ads. But the fact that both of them originally made decisions that created this need to change perception and awareness shows that they were both unsuccessful in preventing problems. Resulting in them both spending millions to fix the perception problems they themselves allowed.

Apple limited its operating system to only be distributed on its high-end hardware and only through its own Apple stores. They also focused on a high-margin market with lower volume compared to Windows. For years, people surrounded by Windows computers began to become unfamiliar and alienated with apple’s operating system. The result: Apple spends hundreds of millions of dollars each year for the last 3 years to change people’s unfamiliarity and unawareness of their operating system value via their switcher ads.

Microsoft did not actively control the messaging and education around its Windows operating system for years allowing Apple to significantly distort its brand perception. This was Microsoft’s own fault for being passive and unresponsive; Apple was just being a tough competitor. At the same time Microsoft overstretched their ambitions with Windows Vista not allowing themselves time to properly 3rd party compatibility.

Each company is now buying themselves out of the problems they allowed with expensive advertising, which seems to be working as I see them each as better companies than they were 5 years ago.

Reply