Those Get-a-Mac spots aren't cheap, but they deliver a lot of bang for the buck

Photo: Apple Inc..

Apple (AAPL) shells out a ton of money for advertising. In fiscal 2009 it spent $501 million, according to the 10-K form filed Tuesday. That's up from $486 million in 2008 and $467 million in 2007.

But half a billion doesn't seem like so much when it's compared with the $1.4 billion Microsoft (MSFT) spent in fiscal 2009, or the $811 million Dell (DELL) spent on ads I can't remember ever seeing.

In fact, as a percentage of revenue, Apple has actually been decreasing its ad spending every year for the past eight, from nearly 5% in 2001 to 1.37%  today (1.17% if you use non-GAAP revenue). That's less than half the 3.6% of revenue Research in Motion (RIMM) spends advertising BlackBerries. (See chart below.)

Most recent fiscal year. Source: Company reports

Yet even if you despise Apple and never use their products, you tend to remember their ads. How does Apple get so much bang from its marketing buck?

I can think of five reasons: More

Celebrating Microsoft's big day with a store opening and three new Get-a-Mac ads

Image: Apple Inc.

In the long running battle between Apple (AAPL) and Microsoft (MSFT), Thursday was a huge win for the boys from Redmond.

Windows 7 launched without a visible hitch and generated more positive reviews than we could count (a Google News search turned up 3,281, but we haven't read them all.)

Meanwhile, in Scottsdale, Ariz., the opening of the first Microsoft retail store delivered the kind of publicity coup money can't buy: customers camping out all night and a crowd the next morning estimated at 500.

Which brings us to our videos. The first shows Microsoft doing its best imitation of an Apple Store opening, complete with employees in multi-colored T-shirts hollering, clapping and giving high-fives.

The other three are Apple's response to all the hoopla: three snarky Get-a-Mac ads trying to turn the event into an opportunity to grab a few more points of market share.

Let's go to the videotape. More

Video: RockBandit

UPDATE: Since this was posted, AT&T has sued Verizon in a U.S. District Court, claiming false advertising and petitioning for restraining orders that would keep this ad off the air. See here.

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Borrowing a line from Apple's (AAPL) "There's an app for that" TV ad campaign, Verizon (VZ) launched a high-profile attack on rival AT&T (T) last night in the middle of Monday Night Football's Viking-Packer game.

"If you want to know why some people have spotty 3G coverage," goes the voice over, as a scruffy-looking character frowns at his iPhone. "There’s a map for that."

A YouTube version of the ad — captured, ironically, on an iPhone 3GS — is pasted below the fold.

The campaign begins at a moment of high drama in the smartphone wars. It was launched on the eve of a Tuesday morning press conference at which Verizon discussed its plans to compete against Apple with devices running Google's (GOOG) Android operating system. (See here.)

And it follows both a new wave of complaints about AT&T's sluggish service and a widely-read estimate by Morgan Stanley that if Apple were to sell the iPhone through both AT&T and Verizon, its share of the U.S. handset market could rise from less than 5% today to more than 12%. (See here.)

Below: Verizon's new TV ad.

See also:

• Google and Verizon go after Apple

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Large advertisers are starting to shift their ad budgets to online video. Is the demise of broadcast television at hand?

By Jason Glickman, CEO, Tremor Media

Glickman: online video ads are on the verge of the big time. Photo: Tremor Media

At the 61^st Primetime Emmy Awards this week, television actors were full of quips about the demise of their medium: “Amy [Poehler] and I are honored to be presenting on the last official year of network broadcast television,” joked sitcom star Julia Louis-Dreyfus.  The subtext: Online video, among other things, is killing broadcast and cable networks by siphoning away eyeballs – and advertising dollars.

Despite the jocular talk of doom and gloom on the Emmys, the apocalypse of television isn’t upon us. Yes, online video has garnered enormous buzz – and venture investment dollars – but the medium has yet to secure much more than a sliver of the $65 – $70 billion advertisers spend annually on television spots.

Until now.

Now I would not be so bold as to call “time of death” on the television model. In fact, with all due respect to Julia Louis-Dreyfus, I think reports of TV’s death are greatly exaggerated. Viewership is as high as it’s ever been and the medium will (and should) receive the lion’s share of advertising dollars now and in the near to mid-term future. More

Image: Apple Inc.

Every Wednesday, Lee Clow, creative director of Apple's ad agency TBWA/Chiat/Day, flies from Los Angeles to Cupertino to meet with Steve Jobs, a weekly get-together that's been going on for years.

Meanwhile, in Redmond, Wash., Steve Ballmer barges into the office of Mich Mathews, head of Microsoft's central marketing group, giving her high fives and shouting again and again "I'm a PC!"

Those are two of the scenes Devin Leonard re-creates for the New York Sunday Times business section in "Hey, PC, Who Taught You to Fight Back?" a 3,000-word feature that may be the best thing written to date about the competition between Apple (AAPL) and Microsoft (MSFT) unfolding on our TV screens.

"It’s an ad war," writes Leonard, "one destined to go down in history with the cola wars of the 1980s and ’90s and the Hertz-Avis feud of the 1960s."

Among the highlights of Leonard's story: More

Yahoo CEO Carol Bartz said two months ago that Microsoft would have to cough up “boatloads of money” to get Yahoo’s search business. In the end, it took nothing of the sort.

Apparently, all Microsoft (MSFT) CEO Steve Ballmer had to do was let Yahoo (YHOO) take the lead in selling search to premium advertisers, and promise to supply Microsoft’s Bing search technology on the cheap. Under the terms of a 10-year deal announced Wednesday, the software giant will take a slim 12% cut of the search revenue Yahoo makes from its huge network of sites. More

(MSFT) (YHOO) (GOOG)

Yahoo CEO Carol Bartz and Microsoft CEO Steve Ballmer pose for the cameras after doing a search deal. Image: Yahoo

Soon after Yahoo (YHOO) and Microsoft (MSFT) announced their search deal on July 29, I spoke with Yahoo CEO Carol Bartz and Microsoft CEO Steve Ballmer about the market's negative reaction, the benefit to the bottom line, implications for affiliates, and comparisons to Google's (GOOG) much-maligned ad deal with AOL (TWX). Below is an edited transcript.

The Street seems to have mixed feelings about this deal. Were expectations too high with people expecting boatloads of money up front, or are people misunderstanding how good this is for Yahoo? More

Over the weekend, Microsoft (MSFT) unleashed the second TV ad in its "you find it, you keep it" series — this time swapping handsome, "technically savvy" Giampaolo for perky, red-headed Lauren De Long.

Once again the camera follows a typical budget-constrained buyer on a laptop shopping spree using Steve Ballmer's money. Once again the shopper chooses an HP (HPQ) Pavilion over a Mac. And once again, the Apple (AAPL) press has gone after the buyer's choice with its teeth bared, digging into the machine's innards and ripping them apart, spec by spec.

Exactly as Microsoft hoped they would.

The most detailed critique so far comes from AppleInsider's Prince McLean, who takes delight in the fact that the Pavilion HDX 16t that Giampaolo chose …

• "weighs over 7.3 pounds naked"
• has a 1.7-in. thick "cheap plastic body"
• comes with "miserably low density 1366×768 screen resolution"
• has a "built-in battery [rated] for less than 3 hours, but reviewers gave it less than two"
• has "a slower memory architecture than Apple was shipping in early 2006 MacBooks three years ago"
• delivers a "peak transfer rate" half as fast as the latest MacBooks
• has "loads of installed RAM [his] computer can't even use."

"The strangest point of this ad," McLean concludes, "is that Giampaolo … ended up with a cheap-appearing machine that obscured its real technical limitations under a flashy layer of misleading, specification-oriented marketing." (link)

"At the beginning, this guy said he wanted Portability, Battery and Power," writes Computerworld's Seth Weintraub. "He got none of what he wanted." (link)

In Technologizer, Harry McCracken points out that Microsoft has cleverly left itself out of the ads. "They never mention Windows or argue that the presence of Windows on a computer is a selling point," he writes.

"That’s how they can get away with suggesting that the price of Macs is all about wasteful cool factor: If you treat the OS as a boring commodity, you can neatly sidestep addressing how Windows Vista compares to OS X. Whether it’s easier to use or less so; whether it has more annoyances or fewer of them; whether security is a bigger issue or less of one; whether the bundled applications are better or worse. And so on. The questions, in other words, that most sharply define the differences between Windows PCs and Macs." (link)

Pretty harsh stuff. And likely to go right over the heads of much of the computer-buying public, who may be more like Lauren and Giampaolo than they are like Prince, Seth and Harry.

Which brings us to the money quote that Dan Lyons (a.k.a. Fake Steve Jobs), writing for Newsweek, got out of David Webster, general manager for brand marketing at Microsoft.

Webster says, according to Lyons, that "the ugly attacks from Mac fanboys are exactly what Microsoft was hoping to provoke."

"He says the idea was to turn Apple's 'I'm a Mac' campaign to Microsoft's advantage. 'We associate real people with being PCs, [but then Apple] ends up looking pretty mean-spirited, the way they go after customers,' he says. 'It's clear that's who they are insulting.' At the same time he can't resist taking a crack at the preciousness of some Mac users. 'Not everyone wants a machine that's been washed with unicorn tears,' he says." (link)

Below the fold: the Giampaolo ad, via YouTube.

See also:

• How Microsoft put Apple owners on the defensive
• All about Microsoft's "Lauren"

[Follow Philip Elmer-DeWitt on Twitter @ philiped]

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