Further proof that youth interest in cars is declining, or simply because no one clicks on FB ads anyway?SAN FRANCISCO (MarketWatch) -- General Motors Co. plans to stop advertising on Facebook Inc. after it was determined that ads on the social networking site had little impact on consumers, the Wall Street Journal reported Tuesday on its website. Facebook, which is scheduled to debut on the stock market later this week, is expected to price its initial public offering at a range of $34 to $38 a share to raise at least $6.4 billion.
I find it at least mildly humorous that GM finds Facebook advertising to be ineffective. Why? Because, just a couple weeks ago, I saw an article talking about how The Hunger Games was advertised heavily on FB (much more so than traditional media advertising), and the company felt this was a large part of the reason for that film's gigantic commercial success. It even went so far as to say a new pattern has been established for cinema advertising, and all other movie makers are scrambling to follow suit.
I guess it works well for some products and not so well for others.
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There are ads on Facebook?
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I would think it's safe to assume that teenagers don't have the same excitement over the 2012 Chevy Sonic as they do over pop culture. Shocking.
I would also assume that the vast majority of adults on Facebook, who aren't already blocking ads, are savvy enough NOT to click on the ads in the first place.
Here's a clue GM, the FB crowd are a bunch of whiney 20 somethings that still live at home with mom, they aren't buying luxury trucks or sedans.
$10M of advertising money rolled into the cost of every vehicle. This is right up there with the Camaro in transformers. How about this idea, spend the money on better cars and they will sell themselves! You don't see many Ferrari ads on TV do you?
Social Media has given companies more ways to advertise then simply placing an add in a side bar which is what I think GM is speaking of. If that is the case then I agree it is a waste of money.
I think the other way to advertise on Social Media is more effect. This other way is to start up a page that consumers can like; as this builds a community around the brand. I have seen some great uses of this for Hunger Games. The movie also had a huge push on Twitter.
Now that leads me to two questions. First did GM simply have ads on the Facebook page and no page to like, and second does Facebook charge for a corporation to have a page?
Regardless of the target market (Huger Games vs GM) this is not good for the Facebook IPO.
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News flash: not every advertising medium is effective for every product or brand.
Last year, GM spent $4.48 billion on advertising, worldwide, so that $10M is a drop in the bucket, all things considered - less than 1/4 of 1% of their total budget. They spent more than that on ads in this year's Super Bowl broadcast alone.
As others have noted, the more relevant story here is the effectiveness or ineffectiveness of Facebook ads for various companies/brands/industries.
If it was managed as poorly as GM manages their Volt Facebook page, then it's no surprise.
With behavioral targeting, remarketing, and plenty of other things, it's never been easier to chase down low funnel, in market shoppers than it ever has been. Trick is that you have to know where to serve those ads for maximum effectiveness, and they need to have a great message to entice sales. Simply serving ads in front of people is useless.
You have to have a good pitch, a good offer, and a great product, otherwise it all gets ignored. IMO, Facebook is a poor place to pitch cars, unless you target people who have shown to be shopping.
And they should also see what the facebook average demographic is (I think it's safe to assume 20-somethings being the majority) and what automobiles they're buying.
To blindly market your non-20-something brand to a bunch of 20-somethings is a chance. They took the chance, didn't see any returns (probably not a huge surprise to them) and then they pull their ADs.
Unless they do some heavy brand rejuvenation, I don't see any use for GM to approach social media as an effective tool for exposure.
Last edited by hipster.; 05-15-2012 at 06:01 PM.
Even an awareness generator or brand building tool the jury is still most definitely out. Marketers fall in love with this stuff because it sounds cool and the CEO wants Facebook ads stat! After a few million shoved right into the Zuck's pocket and no measurable return on their investment, the luster wears off quickly.
I would be interested to see how many advertisers (not agencies, the brands themselves) would be repeat customers with multiple campaigns on FB based purely on hard data and not the 'it' factor of advertising on FB.
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Facebook will decline and finally crash just like all the others. Its an unsustainable buisness model.
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