Google sells ads, but won’t spend much on them

Some well-known companies are even more frugal advertisers than Google.

Starbucks Corp. spent just $95 million on advertising last year, 49 percent less than Google did. Like Google, Starbucks made a name for itself by developing a distinctive product that quickly resonated with consumers whose enthusiasm became infectious.

Google believes happy users are worth infinitely more than any goodwill advertising might buy, said marketing chief Lawee.

“If our products are great, our reputation soars,” he said.

Google’s brand also has been bolstered by the media’s fixation on the company. Hardly a day goes by without Google’s name being splattered across television, radio, magazines, newspapers and, of course, the Internet. That gives the company even more clout with advertisers and even less reason to advertise itself.

“They are at the crest of this wave that gives them a lot of free publicity,” said Roland Rust, chairman of the University of Maryland’s marketing department.

Google has proven adept at orchestrating stories that have little to do with its day-to-day business.

The company attracted headlines last month by funding a $30 million race to the moon. And it made news last year by investing in solar energy to power its headquarters. Some news outlets even filed stories on Google’s 2005 search for a new executive chef.

Not all the coverage has been flattering, but even negative stories build brand recognition. Chief Executive Eric Schmidt said the company benefited from a spike in usage of its search engine after The Wall Street Journal reported last year that Page and Brin engaged in a petty spat about the size of the beds on their personal jet.

Industry experts say Google may have to invest more heavily in advertising as it branches in new directions.

It already is selling a suite of online software applications to businesses and reportedly is mulling lending its name to a line of mobile phones. Ventures like those typically rely on more conventional advertising.

“It’s inevitable that they will have to advertise more,” said veteran marketing consultant Bob Kahn, who runs his a Darien, Conn., firm. “At some point, the power of the Google brand will cease to support all those extremities.”

Although he declined to provide specifics, Lawee also hinted that Google probably will need to increase its marketing budget because many longtime users of the search engine don’t know about the company’s peripheral products.

“Even with all the attention we get,” he said, “that tells me we are still not getting all our messages out.”

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