Generation Why: General Motors Pulls Facebook Ads, Social Media Fever Entering Remission
Happy 28th birthday, Mark Zuckerberg. Your baby is about to go public, but GM still had to rain on your parade by pulling their advertising from Facebook because GM ad men didn’t think it was effective.
The Wall Street Journal explains the move
“ GM, started to re-evaluate its Facebook strategy earlier this year after its marketing team began to question the effectiveness of the ads. GM marketing executives, including Mr. Ewanick, met with Facebook managers to address concerns about the site’s effectiveness and left unconvinced advertising on the website made sense, according to people familiar with GM’s thinking.“
GM is said to spend (or, have spent) about $40 million per year on maintaining a Facebook presence, but only a quarter of that went to advertising. The remainder goes to creating content like fan pages and other social media initiatives, which will still continue. GM’s digital marketing guru Joel Ewanick told the WSJ that he still sees value in these programs, and a statement from GM obtained by Reuters re-affirmed their commitment to this side of the marketing equation.
As much as GM gets singled out in this column, GM may be doing something right in terms of both budgeting and strategy. One report claims that 57 percent of respondents have never clicked on a Facebook ad. For young people who have grown up next to online content and advertising, this number is undoubtedly much higher. This demographic sees these kinds of ads more as background noise than anything of value – or, as marketers would say, “a way to forge an authentic connection with the brand and enter into a conversation with the consumer.”
The bigger leap of faith for GM, and a number of OEMs, is to refine how they interact with consumers via social media. What do Facebook “likes” or Twitter followers really mean in concrete terms? The field of social media has impacted many of us in positive ways, but it’s also create a disproportionate number of charlatan “social gurus” who pitch their dubious knowledge to companies that are afraid of getting left in the dust if the let their Twitter or Facebook pages lie dormant. Ford likes to cite how many millions of “impressions” the Fiesta Movement program got, but sales of the Fiesta have given Ford little reason to throw a party. In fact, GM’s apparently ineffective Facebook campaigns have helped the Cruze outsell the Focus in 2011 (though the Focus is ahead through April, 2012), while the Sonic (which only went on sale last fall) is outselling the Fiesta through April, 2012.
Tout them all you want, but “likes”, “retweets” and “impressions” (perhaps the most ill-defined of them all) are empty metrics that sound great when trying to justify one’s absurd consulting fees, but don’t translate into good products or good profits, the two things that make the automotive world go ’round. Then again, cognitive dissonance is a powerful force.
This story really has bigger implications for Facebook than GM. GM is the third biggest spender on ad dollars in the USA. Their exit may not harm Facebook in the short term, but if big institutional clients keep dropping out, then Zuckerberg’s baby may see some compromised revenue streams. I’m going to take this as a sign of positive changes for GM. Maybe they’re starting to take a closer look at the social media mania that’ stricken other OEMs and realize that it has to be done right, or you will lose them forever. And by them, I mean the people you are trying to bring in, and targeting with marketing initiatives that really need to be axed right this second.
Crosley on May 15, 2012
Facebook will be MySpace in 5 years, only an idiot would get near the IPO. Mark Zuckerberg is just another Mark Cuban, a guy that was in the right place at the right time. He's certainly no visionary, FaceBook was just a college version of mySpace. A 28 year old programmer in charge of $100 billion company, I'm sure it's only up from here on out. Companies are already seeing the futility of advertising on Facebook, the dwindling user base will be the next shoe to fall.
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