January 30th, 2007

Filed under:
PR and Marketing, Technology
10 Comments »

$500 Million to Advertise Something You’ll Eventually Have to Buy

Mark Evans makes a good point about Windows Vista and its half-a-billion dollar ad budget (that’s more than the GDP of Grenada, incidentally):

The strange and ironic part about spending $500-million (which is higher than the GDP of 17 countries) is, at the end of the day, most people will end up buying Vista anyway. At some point, you’ll have no choice but to trade in your Pentium III, 1GB machine for someone even more powerful, which, of course, will be powered by Vista. It’s like that old Fram oil filter ad where the garage mechanic says “You can pay me now, or you can pay me later”.

This obviously doesn’t apply to the Apple and Unix/Linux devotees out there, nor to the crazy dude with the tinfoil hat still using Windows 95, but it’s true for the vast majority of computer users.

The obvious argument here is that Microsoft is spending money to retain (and, I suppose, acquire) mindshare. I don’t know enough about advertising to judge whether this is money well spent, but it seems like a boat load of samolians.

Comments: 10 Responses so far

Mack D. Male
January 30th, 2007
2:50 pm

It’s more than mindshare. Do monopolies have to advertise? Of course not.

I think spending so much to market Vista is just another way for Microsoft to show that they in fact do not have a monopoly.

(I don’t think they do anyway…but it doesn’t matter what I think!)

[Reply]

Ian King
January 30th, 2007
8:53 pm

I wonder how the number of new computers that will ship with Vista over the next year compares to the number of upgrades that’ll sell in that timeframe. The ad buy seems nuts for something that people end up buying by default. I understood the need to hype Win95 — it was a pretty dramatic depature; maybe it’s needed when the reaction to Vista seems to be ‘Yes, and this is important how…?”

Many Unix/Linux types buying machines for their personal use also end up paying for Windows, even if the first thing they’ll do with the computer is format the hard drive and install their OS of choice. (I’m one of them.) Too many retailers and manufacturers don’t give you the option of a Windows-less PC (Frontier PC being a notable exception). You could put together your own system, but odds are that you can’t get a better deal on hardware… so you’re still paying one way or another. Sigh.

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Xero
January 30th, 2007
10:25 pm

As a person that has not purchased a Windows product into 10 years, and hasn’t used one out side of work in 5, I can tell you that they do need to advertise. Plus the buzz is that people aren’t looking to upgrade anytime soon and MS needs to recoup costs sooner rather than later.

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Graeme Pietersz
January 30th, 2007
10:46 pm

The advertising may also be aimed at encouraging people to buy new PCs with Vista installed sooner. Shortening the upgrade cycle both makes money in VIsta sales, and keeps the PC manufacturers happy with MS.

You seem to have a lot of non Windows users here (Linux in my case).

Where I live Windows is freeware (everyone pirates, even large corporations) so their advertising is even less directly related to profit.

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Nathan
January 31st, 2007
5:02 am

There was a story on the news here (NYC) yesterday about people who rushed out and bought the software, then found out (duh) that they’re current computer wasn’t fast enough to run it.

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-j.
January 31st, 2007
8:49 am

Remember when the Canadian government advertised the loonie? A “product” you literally had no choice but to use? Now that was a fine use of taxpayer monies.

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Ryan Cousineau
January 31st, 2007
9:30 am

It’s amusing to compare Vista’s advertising budget to Grenada’s GDP, but I would point out that Grenada only has 100,000 users.

That makes Grenada about as populous as Abbotsford. Same number of international airports, too.

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Leah
January 31st, 2007
12:52 pm

If you are a PC (Windows) user, admit the inevitable…just wait for the first service pack!!!

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Robeto Arias
January 31st, 2007
9:20 pm

I don’t think eveybody is going to run to switch Vista now, not in 2008, the old days of Win 95 are gone for Microsoft.

Eventually I’ll get Vista, but very likely because it will come with a new laptop, I bought my current laptop last year (with “Windows Vista Capable” badge) so I won’t replace it very soon. Furthermore, many IT people (at least here is Australia) are less than excited with the new Vista, and even parts of the Government are discouraging the switch now. And that’s why MS needs the advertising.

My XP is “fine” as it is now, and anyway I’m mostly using Linux with the compiz interface which really rocks!!

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..::B:R:A:D::.. » Microsoft_and_Advertising
February 10th, 2007
8:42 pm

[...] Microsoft will spend approximately $500 million on advertising the release of Windows Vista alone! It also spent over $200 million to advertise XP, which in turn was twice as much as they spent to advertise Windows 95. As this blog post by Darren Barefoot points out this seems like a lot of money to shell out for a product that a majority of computer users will be forced to buy at some point anyway…because heaven forbid we be able to choose not to buy Windows when we buy a majority of PC’s on the market. He also aptly points out that the Vista’s advertising budget is larger than the GDP of 17 countries. I can tell you this though…spending more on advertising doesn’t actually make your product any better. [...]

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