The most interesting thing about today’s launch of Google Calendar isn’t the product. Instead, it’s how well the product launch exemplifies the advantage Google gains from free marketing from blogs, news aggregators, and other media.

For example, take a look at the free love Google gets from blogs for almost any move they make. Here’s a screenshot of today’s Tech.Memeorandum.

(There are more links but I wanted to keep the image size small).

Diggers like Google, too.

4000+ diggs means Google got a lot of traffic. In fact, Google-related stories account for 13 of the “most dugg” stories of all of 2006–no other company comes close.

It’s noteworthy that, at one point, Google thought they might need to run a traditional high spend marketing campaign to build its brand. Readers of John Battelle’s book The Search may remember that Google eventually decided against that approach–a decision driven largely by the fact that Google’s business model wasn’t yet working, so the company had to conserve cash (Ram Shriram, a board member, recalls: “it was a hard decision to make… we were the only company not spending money on marketing. Were we the dumbest people in the business?”). If you have a copy of Battelle’s book, see pages 126-129 for more detail.

Google’s parsimonious approach to marketing spend still holds true today–though cash is obviously no longer a concern–because the company gets an extraordinary amount of free advertising. Compare Google’s marketing budget to Microsoft’s: in FY2005, Google spent about $440 million on sales and marketing, or about 7% of revenues (via Edgar). That’s not chump change, but consider Microsoft; they, on the other hand, spent about $8.7 billion, or almost 22% of revenues, in the same period (also via Edgar).

Despite the fact that Microsoft far outspends Google on marketing, Google’s brand is, by some accounts, the best in the world (Apple comes in second, but they spent about $1.9 billion on SG&A, or 13% of net sales). Though it’s something of a chicken/egg question as to whether the strength of Google’s brand drives its free advertising or if the free advertising drives the strength of the brand, there is no question that being able to funnel money that might be spent on marketing into other, more productive areas–like talent acquisition and retention, research and development, and M&A–gives Google a huge advantage.

Seeing as we bloggers are Google’s real marketing department, maybe it’s time we got a piece of the action… Sergey? Larry?

Posted by Dan Grossman on Thursday, April 13th, 2006 at 8:01 pm.