Advertising Investments Rise At Tech Companies
U.S. tech companies spent $723 million -- up 30% -- on advertising in the first quarter of 2013, compared with the year-ago quarter, according to findings released Wednesday.
Microsoft led in the quarter with the most aggressive marketing strategy supporting newer products like Windows Phone, the Surface tablet, and the Windows 8 operating system, per Nielsen. In aggregate, it contributed to a more than 200% increase in ad spend during the quarter, knocking Intuit out of the No. 1 spot for the first time in five years.
While ad tech spending rose, Nielsen reported that total spend across all industries declined 1% during the same period.
Sales and marketing expenses rose $380 million or 11% -- primarily reflecting advertising of Windows 8 and Surface during the three months ended March 31, 2013, compared with the same months in the prior year, according to Microsoft's U.S. Securities and Exchange Commission 10-Q filing.
Historically, Intuit -- the company behind personal finance programs TurboTax and Quicken -- spends big just prior to tax season. Apple, Google and Amazon, also worth mentioning, are not strangers to ad spending in previous years.
Operating income from continuing operations increased 12% in Intuit's third quarter of fiscal 2013, which ended April 30, compared with the same quarter of fiscal 2012 -- partly as a result of higher expenses for advertising and other marketing programs in its Financial Management Solutions and Consumer Tax segments, according to Intuit's U.S. Securities and Exchange Commission 10-Q filing.
Apple -- which filed its 10-Q on April 24, 2013 -- does not separate advertising costs, but it does explain how continual investments in research and development and marketing and advertising are critical to the development and sale of products and services.
Apple reported "additional off-balance sheet obligations of $1.4 billion as of March 30, 2013," comprised mainly of commitments to acquire capital assets like product tooling and manufacturing process equipment, as well as commitments related to advertising, research and development, Internet and telecommunications services and more.