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General Motors: "Facebook Ads Aren't Worth It"
Fluffeh writes "General Motors spends around $40 million per year on maintaining a Facebook profile and around a quarter of that goes into paid advertising. However, in a statement, they just announced that 'it's simply not working.' That's a bit of bad news just prior to the Facebook IPO — and while Daniel Knapp tries to sweeten the news, he probably makes it even more bitter by commenting 'Advertising on Facebook has long been funded by marketing budgets reserved for trying new things. But as online advertising investments in general are surging and starting to cannibalize spend on legacy media, advertisers are rightfully asking whether the money spend is justified because it has reached significant sums now.'"
but that doesn't seem to stop anyone. I've found that marketing rarely has ever been able to prove that the money they spend actually generates returns.
Mmhmm...
At least videos that manufacturers and marketers put up on Youtube, if they're good, can get a lot of attention. That Honda ad with Matthew Broderick, the Scion ad with the babes in bikinis eating donuts while one drives the new car doing donuts, etc... Plus the ads can be longer than fifteen, thirty, or sixty seconds, and if they're quality ads where they're amusing or informative beyond the normal "THIS IS OUR PRODUCT LOOK AT OUR PRODUCT" that you get in a minutes, they can be much more effective.
Putting an ad video on Youtube (not as an ad, as a video) allows anyone to view it and allows references to it to be pushed through any number of means, not just through Facebook. This means more vectors for the ad to become "viral", and the more that see it, the better it is for the company.
Do not look into laser with remaining eye.
Wait... $40 million dollars, a quarter of which ($10 million) was advertising. The rest was $30 million dollars of which $0 went to Facebook (accounts are free). Where did the rest go, does it really take $30 million dollars of payroll expenses to have a couple of people post status updates and photos? I realize they probably had review teams, photographers, marketing folks, customer service, etc - but $30 million dollars seems absurd.
Facebook has many eyeballs, but those eyeballs don't on average stick around as long as they do for television, or even print media.
If you're a business and you're looking for real bang-for-buck, you're talking Hulu -- the 'middle ground'.
Facebook IPO'ing now is a cash out, not a strategic move. If you remove Zynga from Facebook, it's not really worth anything.
One day a social network will become something permanent, but Facebook won't be that network.
You know who else are losers? Slashdot users: Freetard neckbeards who only want to talk about Linux, hate all end users, and have poor hygiene.
Am I doing it right?
What did the walrus say to the penguin? "No soap, radio."
If GM had spent that money on a bit of engineering to get their cars a bit closer to the efficiency of European cars, perhaps people would buy them more? No amount of avertising money will get enough people to buy yesterdecades technology cars
"I know that 50% of my ads are effective, I just don't know which 50%"
Attributing conversions (ie, purchase of a new car) to ads is tricky for any business, let alone one like GM where the eventual purchase takes place offline. You can track leads from Facebook ads to your website, but how can you be sure the ads contributed to a purchase down the road? And even if you ask someone who comes into a car dealership "Did you see our ad on Facebook?" or give them a coupon to print and bring with them, how can you be sure how much of that purchase was driven by that ad vs the ads she saw on TV vs the radio vs print?
Facebook ads command a hefty premium over more mainstream online ads because of the ability to finely target specific types of people (ie, people who have "Liked" GM, people who have listed "cars" as an interest, people who have mentioned the Chevy Volt in a conversation...). It's a big problem for Facebook if brands can't attribute this premium ad spend to a measurable increase in sales.
The problem is that Facebook is optimized for narcissistic _self_-promotion through _telling_ your echo chamber how great you are, not for _showing_ others your status even through the usual consumption displays that are required to promote _others_.
There are 1.1... kinds of people.
I've almost never intentionally click on a FB ad since they are generally not relavant. Right now, my FB shows 6 online dating ads (even though I haven't been single for over 5 years), one ad from Wells Fargo asking me to help write a love letter to San Francisco (what!?) and one Marathon discount ad that might be relevant, but when I clicked on it, the site wanted my email address before it would even show me their site.
I use Google a lot (email and searches), and I typically click on one Google ad a day because their ads are typically quiet relevant to me. If a little creepy - I searched a Chevy Aveo mentioned in an earlier comment, and now my current Gmail ad is from Ford. Creepily relevant.
Who needs to advertise when your checking account has unlimited overdraft protection courtesy of the taxpayer?
Dinner time? If I watch your ad after 4:30, I'll miss the early bird special. Save 75 cents or watch a commercial. Not a tough choice. Not going to watch it after dinner either. I have to get my nap in before bedtime or I'll be tired tomorrow.
I already know who GM is and when I'm in the market for a new car I go look at the dealer lot. Commercials are just irritating. It's the same on CNN videos. If an ad plays, I click away and find the same video from another source.
Pull my finger for my public key.
My elite math skills tell me they are spending $30 million dollars per year on Facebook, where none of that $30M can be accounted for by paid ads.
Until I get a clear understanding of that, I have to think that some kind of legendary incompetence is happening at GM, so I don't know if I get much out of their conclusions.
Assuming it costs $50k/year for GM to pay someone to upload pictures of their cars, type status updates ("Looking forward to tomorrow's release of car X!" or "OMFG car X is sooo beautiful and fast, I don't even care what it costs!") I can't help but imagine they're paying 600 people to do that kind of work.
"Believe me!" -- Donald Trump
I *don't* have an MBA, but with my long experience in IT and business process, I would have insisted on defining the expected outcome, with metrics to measure success. That would have uncovered a demographic mismatch, and likely other problems as well.
I have worked with MBA's, and most of them are idiots. They can't seem to think using the material from their coursework. And the newly minted MBA's? Holy shit, they think they walk on water, when I wouldn't trust most of them to walk my dog.
I don't think it's a problem with Facebook. I think it's a general issue of society being over-saturated with ads.
Take GM for example. They advertise on TV, radio, in magazines, in newspapers, and online through every venue available, including Facebook and YouTube. Everywhere you turn, you will see GM advertising.
People are burned out.
They don't care about supposedly "new" products that are more of the same with minor tweaks and new version numbers or names.
GM's real failure is not in their advertising, but in their products. With the sole exception of the Volt, every single vehicle they sell could be rubberstamped from a Ford, Chrysler, Honda, or other factory and the customer wouldn't know the difference if there was a GM logo on the front.
Welcome to the mainstream, GM. You're a commodity, indistinguishable from a horde of "me, too" vendors.
Please feel free to blow a few million more on another Superbowl ad that will garner you maybe a few thousand actual unit sales.
In the meantime, I will not share your YouTube videos on Facebook or "like" your page because I don't like advertising, and the only thing I get by "liking" a vendor's page is advertising posts thinly disguised as "information" that doesn't actually tell me anything useful. If you want me to shill, pay me. :P
Only a fool would astroturf for a vendor without compensation. You'd lose all your friends and get nothing in return.
And personally, the respect of friends and family is worth far more to me than you'd be willing to pay me to shill your crap.
I do not fail; I succeed at finding out what does not work.
I just don't see that they did the right research.
Did the advertising increase business? Nobody seems to know.
Did the customers remember seeing a Facebook ad? No.
Those aren't the same thing.
There are two types of people in the world: Those who crave closure
Gas is really cheap. For what my young male cousin is paying in monthly car insurance, despite having a clean record, he could fill up almost weekly and drive about one thousand miles per month, or about 30 miles per day, which is actually a hell of a lot of driving. Just for the cost of insurance alone.
Of course he also has to pay for the car itself, and maintenance and afford to pay for whatever it is he's driving to, unless he's just cruising or getting into trouble with friends ($20/person average movie cost, shopping, blah blah).
Gas is probably the cheapest cost of owning a car.
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
The problem is that Facebook is
...[snip]
Nah, the problem is they're spending 40 million bucks a year on "maintaining a facebook profile".
I'm pretty sure they're doing it wrong. If that's really the way they do things it's no wonder they need bailouts.
No sig today...
Considering what the MBAs have done to the economy, I don't think I'd brag about having one.
Free Martian Whores!