Apple Massively Ramped Up Ad Spending In 2010, But Sales Grew Even Faster

Wednesday, 27 October 2010 23:56

Apple Massively Ramped Up Ad Spending In 2010, But Sales Grew Even Faster

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Earlier today, Apple’s 10-K form was released for their 2010 fiscal year. The long document is full of tidbits about the state of Apple’s business. One thing of note is just how much Apple ramped up their advertising spending in 2010.

For 2010, the company’s advertising costs were $691 million.

That’s up from $501 million last year. And it’s the first huge jump for Apple in recent years. In 2008, for example, they spent $486 million. And in 2007, they spent $467 million. In other words, in previous years, the ramp up in ad spending has been about $15 to $20 million. This past year? A $190 million jump.

But what’s really interesting is that even despite this huge ramp up, Apple continues their trend of lowering the percentage of revenues they spend on advertising. While the spend was $691 million this year, total revenues were over $65 billion, so Apple only spent about 1 percent of their revenue on this. Last year, that percentage was 1.37. And in 2001, it was 5 percent.

So even though Apple is ramping up ad spending, they’re bringing in money much quicker so the overall percentage of money they’re spending keeps getting less and less.

And while $691 million may seem like a massive amount of money, it’s still less than half of what Microsoft spent on advertising last year. And it’s less than what Dell spent last year.

So what did Apple spend that extra $200 million on? They don’t break it down, but you can bet a bunch was their new category: iPad. And those great Don Draper-like iPhone 4 ads.

[image: AMC]