Vonage Tops Internet Ad Spend
According to the research firm TNS Media Intelligence, Vonage has been top spender on Internet advertising for three straight months -- May, June, and July (August figures are not available yet). During these three months Vonage spent $73 million in online advertising (this does not include traditional print and broadcast spending). In April, Vonage had a similar pace of spend ($21 million) but was in the number 2 position in total dollars spent for the month.
How long can Vonage spend $20 million a month in online advertising? Can they keep it up long enough to get acquired? Is it just me or does this look like the bubble to anyone else -- spend ad dollars as fast as possible to get new users... who won't generate enough revenue to pay for the ads that drew them in??
Perhaps a better use of this money would be to improve Vonage's famously aweful customer service. Both because retaining customers would seem to be a better investment than attracting new customers if those new customers are going to leave... And having happy customers will help bring in new ones.