General Motors stops all Facebook ads

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Artist's rendition of the Facebook logo.

GM announced Tuesday it will pull out of all Facebook ad programs. (Photo Credit: Public Domain/Rodo9/Wikipedia)

“I love you; I’m just not in love with you.” That appears to be General Motors’ stance when it comes to Facebook, reports Automotive News. On the eve of Facebook’s initial public offering, GM announced Tuesday that it will no longer buy Facebook ads, an advertising channel through which the automaker spent $10 million last year. GM will “remain committed” to using the social media platform for its content strategy.

All content, no ad space

General Motors will no longer pay Facebook for targeted ad space, yet it will continue to maintain content regarding its automotive brands, for which Facebook does not collect revenue. This was confirmed Tuesday to Automotive News by Chris Perry, vice president of global marketing for Chevrolet.

This move away from targeted Facebook ad content by GM is not in keeping with the advertising strategies of competing automakers, however. Ford Motor Co. is taking the opposite approach, in that it has announced that it will “accelerate” Facebook ad spending, in addition to continuing to utilize its Facebook content network.

Insufficient ROI

Reports indicate that General Motors was concerned that its return on investment for its annual $10 million in Facebook ad expenditure was insufficient. Perry noted that GM is still exploring ways to leverage Facebook to its advantage.

“I think we’ve learned through our experience that the paid advertising is not the best way of activating Facebook,” he said.

Moving forward, Perry said that GM will continue to use such tools as videos, contests and photos in order to continue engaging Facebook users.

“Facebook is still going to be an integral part of our social strategy, no doubt about it – it’s the biggest game out there. The question is where does paid advertising (on Facebook) come into play versus earned media,” Perry stated.

The value of Facebook advertising

Opinions regarding the true value of Facebook advertising have reportedly been mixed so far. Automotive industry insiders point to a factoid revealed by the Facebook team in February which stunned the market. According to Facebook, only 16 percent of “fans” actually see any given piece of content. Facebook’s common practice has been to urge businesses to buy advertising to reach more potential customers, but the relatively low penetration rate has made the prospect questionable for more companies than just GM. It’s reportedly even tough for automotive sales on Facebook, as the purchase cycle is long and many factors influence the purchasing decision.

GM spokesman Tom Henderson noted that the automaker will still set aside some of its advertising budget for “content spending,” as the company still believes that Facebook is an effective tool for reaching customers.

“This is a regular part of business,” said Henderson, “and it’s not unusual for us to move our spending around various media, especially considering growth of digital and social outlets.”

Ford loves Facebook ads

According to Scott Monty, Ford’s head of social media, Facebook ads that include “sponsored stories” with a social media interaction layer have been quite effective.

“We’ve found that Facebook ads are very effective, and they’re most effective when we strategically combine them with great content and innovative forms of storytelling rather than a straight media buy,” Monty said.

While Monty did not disclose Ford’s Facebook budget, he did say that 20 to 25 percent of Ford’s marketing budget is funneled into digital and social media.

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Corporate Profile’s coverage of GM turning away from Facebook

Sources

Automotive News

BBC News

Reuters

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