Effectiveness of Advertising Spend

The high marketing spend by the advertisers has been a subject of severe scrutiny. There has been little evidence of huge spends on marketing spends translating into sales. Here are some examples to demonstrate it.

IPhone v/s Lumia

IPhone 2007 Launch 

Marketing campaign of iPhone kicked off on 9 January, 2007 by then CEO Steve Jobs by an hour long presentation. Over the six months prior to iPhone going on sale, iPhone was the subject of more than of 14,000 articles, 311,000 blog posts and it generated 69 million hits on Google. Just prior to the product's release, it was estimated that two-thirds of the population of the U.S. was aware of the device. The media coverage iPhone got is estimated to worth $1,400 million, whereas Apple spend less than $97 million on the campaign.         

Lumia 2011 Launch
Nokia and Microsoft’s combined marketing budget for only US launch of Nokia Lumia was to the tune of $200 million with Nokia outspending Microsoft 2-to-1.The two companies and telecom AT&T were not the only company spending consumer to buy Windows operating system phones, Samsung and HTC as part of their deal with Microsoft also contributed in the promotion campaign. Major part of the marketing budget was used to provide hefty sales incentives ranging between $10 to $15.

Mac v/s Windows

Mac has registered highest growth in desktop and laptop operating system in last 5 years inspite of lower marketing spends than windows. Microsoft outspends Mac on advertising with marketing budget ration being 3:1.

Year	Mac. Advertising Budget	Windows Advertising Budget
2006	$ 486 million	$ 1200 million
2007	$ 467 million	$ 1300 million
2008	$ 338 million	$ 1200 million

Source : Data provided by company in annual SEC filllings