GM spent $10 million in advertising dollars with Facebook last year. According to executive managment within the company, the dollars spent on Facebook ads did not pay off for the car company. GM spent $1.8 billion last year in total ad sales, so the Facebook investment is not significant. Please read the article below.
http://online.wsj.com/article/SB10001424052702304192704577406394017764460.html
Knowing what you do about social media, do you think GM is making the right decision?
I think this is the beginning of a trend, look for more people to stop wasting money on Facebook ads, they just return poor ROI.
ReplyDeleteThe biggest proof, how many times have you clicked on an ad on Facebook? How many times has that ad caused you to buy something from that company?
If your like me I used Facebook for 6 years, might have clicked on 20 ads total and bought nothing from any company that I clicked a link. That would have been 3 ads a year, and 0 ROI. Just seems like a bad business model.
I agree with Aaron on Facebook ads. A lot of times they don’t even make sense to me. For example when I updated my profile to engaged I started getting all these wedding photographer ads, but when I clicked on the ads they weren’t even local photographers (not even in state). Why would I hire a photographer that is in NY or California? I just didn’t get it and I thought the ads were not targeting the right market segments.
Delete-Pam Burr
Is it worth having a presence there however? Do they risk giving up the space (and marketshare) to their competitors by NOT being there?
ReplyDeleteI can't read the article because I don't subscribe the WSJ. However, I did hear about this on NPR Tuesday just before class. It sounded like a simple and easy decision for GM: the ROI was poor.
ReplyDeleteBecause GMs products appeal to a wider audience, can't GM reach its markets though any other media? I guess having a FB web presence can be helpful in providing some marketing data when people 'like' them but I can't image its FB presence is more effective at espousing its products benefits than its own website is.
I suppose Facebook is moderately helpful for B2Cs selling soft goods and fad goods especially when Facebook can get its targeted ads working effectively. But I would suspect, just like with historic advertisement models, there remains a strong correlation between Facebook ad click-through rates increasing the younger the user is, since younger people are more impressionable, have less experience with purchasing the things they need and want, have not established brand loyalties, etc.
On the other hand, does anyone know about the overall effectiveness of web ads for durable goods? Especially with cars...it's been widely known for at least a generation that American cars suffer from quality problems. Furthermore, with research data more available than even before, why wouldn't any durable good be researched before purchasing it??
I think sometimes we have over-expectation on FB. To me, FB is a social network. But if you expect significantly increase your sales numbers by advertising on FB may seems unreal. As Aaron and Kurt mentioned, many company measure the result by looking at the ROI. Company will lose interests if the ROI is poor.
ReplyDeleteYou might enjoy seeing this graphic of all social media platforms together in once place. The author wonders if this is why GM pulled out of FB.
ReplyDeletehttp://www.businessinsider.com/social-media-marketing-landscape-complicated-2012-5
This is a tough question - if they are doing the right thing by pulling the ads on Facebook. It's hard to measure branding/awareness so specifically which seems at the heart of this issue. If they didn't see any direct ROI,in terms of other forms of measurement like clicks or impressions, it might be wise to invest in other areas.
ReplyDeleteEven if they aren't running ads on Facebook, they can also still have a presence via their fan page: http://www.facebook.com/generalmotors
The social media landscape is complicated, which is why I really love the book I'm reading "Groundswell" which focuses on strategic marketing principles as well as human nature. It doesn't focus on the latest and greatest social media tool, sinc it says that the technology changes, not the principles.
When we started our website, we got a certain amount of free advertising on things such as google, facebook, and various other media outlets, but it hasn't seem to help us much. We haven't had anyone use our website for purchases (though I didn't expect much income from that). I just wonder how much companies get out of advertising on Facebook. It seems most people consider it a hinderance and don't even bother looking at those ads. Is it that I am not selling products people want, or is it they don't care about my ad, or even worse are they just telling me they are doing it.
ReplyDeleteThe book I'm reading for our class, "The New Rules of Marketing and PR," published about 9 months ago, opens its first chapter to describing the big three automakers websites as an illustration of old media producers failing to adapt to how they advertise using the web. The big-3 automaker websites reproduce variations of their tv commercials: pay attention to this!, buy now!, 72-hour sale!, financing deals!, our vehicles are stylish! However, they fail at providing two-way dialog, educational information about their vehicles, customer forums, etc.
ReplyDeleteSo my point is that GM might not be producing banner ads that are effective on any site.
But I do see now in a visit to GM's site they got the message my book's author delivered: their site now opens with a series of selectable criteria to help visitors immediately focus on learning about vehicles that addresses their interests. It looks like GM is learning and adapting to try to figure out what works. Maybe GM is right about Facebook but it seems unlikely Facebook is entirely at fault for GM’s ad troubles.
I happened upon this SEOMOZ blog post says that "GM's Doing it Wrong: Facebook Marketing Lessons"
ReplyDeletehttp://www.seomoz.org/blog/gms-doing-it-wrong-facebook-marketing-lessons-15202?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+seomoz+%28SEOmoz+Daily+Blog%29