Marketing by the Numbers: Facebook versus Google

Facebook and Google are both giants in the tech industry. However, if you compare sales and profits, you would think that Google is a far better marketer than Facebook: Googles sales last year were more than double Facebooks sales, and its profits were 40 percent higher. Sales and profits provide information to compare the profitability of companies, but between these numbers is information regarding the efficiency of marketing efforts in creating those sales and profits. Appendix 2: Marketing by the Numbers, Marketing Performance Measures, discusses other marketing profitability measures beyond the return on marketing investment (marketing ROI) measure described in this chapter. Review the appendix to answer the questions using the following information from the two companies incomes statements (all numbers are in thousands):

	Facebook	Google
Sales	$55,838,000	$136,819,000
Gross Profit	$46,483,000	$77,270,000
Marketing Expenses	$8,472,750	$18,344,250
Net Income (Profit)	$22,112,000	$30,736,000

1. 2-14. Calculate profit margin, net marketing contribution, marketing return on sales (or marketing ROS), and marketing return on investment (or marketing ROI) for each company. Which company is performing better? (AACSB: Communication; Analytic Thinking)