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.'"

Comments

Whaaaa????

[crazyjj]

You mean my loser friend from high school who spends all day in front of his computer posting updates on his shitty life *isn't* the perfect person to target with an ad for a $40,000 new car?!?!?

Re:Whaaaa????

[Anne_Nonymous]

If GM wants to target their demographic they need to advertise on late night AM radio, not the internet.

Re:Whaaaa????

[AngryOldGuy]

The problem isn't so much Facebook users (this includes pretty much everyone), but too high prices for non-targeted users. Yes, you can target by age and gender and such, but unlike with Google and AdWords you cannot target to specific interests or queries. Yet Facebook charges almost kind of prices per click than Google does.

I was actually surprised when I was looking at the prices the first time. I had the idea that I could advertise and get people much more cheaper from Facebook. But the prices are ridiculous. It's much better to use AdWords or Bing's AdCenter for some actual targeted queries if the price is going to be the same.

Re:Whaaaa????

[geekoid]

It's nice that you don't understand th demographics of Facebook, and still not let your ignorance prevent you from writing a post.

Well done.

You know who is a large demographic of Facebook users? Married Women 25-33. The second largest is men in the same age range.
Your example is the minority.

That's not the problem, the problem is that it's global. The majority of users are outside the US. So, selling 40,000 dollar car to someone in turkey isn't exactly going to work.
Here is a breakdown.

http://www.kenburbary.com/2011/03/facebook-demographics-revisited-2011-statistics-2/

Re:Whaaaa????

[Anonymous Coward]

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_.

Nobody, and I do mean nobody, buys pointless shit like narcissistic people do. They are the ones who post up the most personal information about every last thing. They are the ones who just have to make sure everybody sees what location they're "logged into" at the moment. So in that regard, Facebook is a Utopia for advertisement.

The problem as I see it, is how the ads are actually displayed. I honestly hardly notice them at all, myself, and even if they were interesting and noticeable there's no way in hell that I trust clicking on it. Clicking ads in my mind is like saying "Why yes, I think I will take some Malware for my computer, now that you mention it. Thanks! Boy that really fucked my plan up. Got any more?"
Contrast that to something like Youtube, where they get annoying, but not only do you have to do nothing, you also aren't actively jumping through random, unknown web sites.

If FB was smart, they'd require advertisers to have a FB group, and eliminate outside linking entirely.... ads would link to the FB page of the ad purchaser. And here's where they throw in the bait- add the long-coveted 'Dislike' button on the ad pages and company groups. Streisand Effect would make more eyes hit those ads than anything in history... and I'm not exaggerating.

Re:Whaaaa????

[oldmac31310]

I don't have time for any of this. There's a Matlock marathon on!

Re:Whaaaa????

[Anonymous Coward]

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.

NPR Looked at Pizza Delicious

[eldavojohn]

If you're perhaps wondering about how this works out for smaller businesses, NPR built an anecdote out of a small locally owned pizza joint in New Orleans trying their hand at targeted social advertising. For $240 they doubled their Facebook fans (at the cost of nearly $1 per 'like') and weren't so sure they'd see the return on that money after asking customers one evening where they heard about Pizza Delicious.

$30 million dollars?!?!?

[sglewis100]

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.

Re:$30 million dollars?!?!?

[h4rr4r]

For $40 million it would have been better to give away cars worth that much. Gets them on the street for people to see, gets folks talking about GM giving away cars. I bet giving away cars would generate some buzz on facebook without all the extra work and cost.

I'll Beat Their Price!

[Kagato]

Hey GM, I'll maintain your profile for $2 Million a year. By Grabthar's Hammer, oh what a bargain!

Marketers: 1, Press: 0

[Hadlock]

Marketer 1: "hey, we don't have enough budget to advertise on Facebook"
 
Marketer 2: "how do we reach the facebook crowd without spending money?"
 
"Marketer 1: I know! Let's do a press release that says we can't afford advertising on Facebook, but spin it as us not wanting to advertise on facebook"
 
Marketer 3: "that's a great idea! let's announce it just days before facebook's public IPO for maximum impact!"

Re:Heavy social media users are typically losers.

[catseye]

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?

Re:It's not working!

[Anonymous Coward]

On a more serious note I totally feel for you GM. I spent 20 million advertising my "INVASIVE ANAL PROBE CONSULTING" business and it's just not working. Must be Facebook.

Facebook is not your target audience. You should try direct marketing to the TSA.

Works only for local business

[John3]

Just my two cents as a small business owner that has dabbled in all the online media options...spending money on social media is a waste, especially if you're a company that extends their reach beyond a single community. For local business owners, Facebook can be a great tool to send updates on events such as new interesting products, employee recognition, etc. Many customers like keeping in touch with their local business, whether it's a hardware store (like mine), restaurant, or other business that may hold special events of interest to the community. All that is free, and spending beyond that seems to be a waste of cash.

Making sure you are listed accurately on Google will cover 95% of your needs currently. Update the Place page, and if you sell products make sure you're uploading a data feed of your inventory. Both are free and generate tons of traffic to your website plus lots of in-store visits (if you have brick and mortar locations). Adwords is a waste of money IMHO...we won the Google/Amex video contest for Small Business Saturday and it included $5000 in Google adwords funds. I've burned through about $4000 in a month and a half and have seen negligible incremental business even with click-through rates in the 2% and higher range (and ad position average of 1.6). Sure, it's nice to know people are visiting our site, but plain old Google search still generates 95% of the traffic versus 2% from adwords.

Re:Neither are Super Bowl Ads...

[geekoid]

More precisely:
I've found that marketing rarely has ever been able to prove that the money they spend actually generates returns that exceed the oney spent.

Ironically the except IS superbowl ads.

" Earlier research by some of the same scholars also found that films advertised during the Super Bowl see as much as a 40 percent boost at the box office."
http://www.slate.com/articles/business/moneybox/2012/02/i_paid_4_million_for_this_.html

Of course, their are other factors as well. If I buy an ad, that mean it's harder for my competitor t buy an ad, pop culture benefits, etc:
http://money.cnn.com/2011/02/03/news/companies/super_bowl_ads/index.htm

But is does seem superbowl ads are worth it in many cases.