Why it would be foolish to “pull a GM” and snub Facebook
The two biggest stories in digital right now are Facebook… and Facebook. On the eve of an IPO that could value Facebook at $100 billion we get word that automotive giant General Motors is pulling its $10 million Facebook ad budget on account of diminished returns. Is GM telling us something, that Facebook is a waste of money as a marketing opportunity? The answer: not so fast.
Firstly, we should get something clear. GM is not abandoning Facebook. It will keep its fanpages for GM and for its various brands such as Chevy Camaro and Cadillac alive. And, it will continue to invest in a social media team to keep them current, fresh and engaging. Community management doesn’t come cheap, marketers! It just won’t be paying Facebook (in the form of display ads) to drive extra traffic to these pages, nor off Facebook to its suite of brand or corporate sites.
To be sure, its decision to pull display ads from the world’s largest social network appears to be an indictment of Facebook as a marketing tool, but what it clearly is is a reassessment of its digital ad-buying priorities. GM might figure, heck, we’ve got 6 million-plus fans on our network of brand pages whom we can reach every day for free, why pay? After GM’s surprise move, you might be thinking the same thing. Let me explain then why it would be unwise to “pull a GM.”
1. Abandon a good thing at your peril.
Facebook is the world’s biggest ever media property with 901 million active users; 500 million of them log on daily to interact with their networks. That’s unprecedented potential reach and frequency. Plus, Facebook skews higher in all the relevant categories: its users are younger, wealthier and better educated. No wonder than that 89% of ad agencies in the U.S. plan to spend their social ad bucks with Facebook.
2. We’re only just beginning to see the true potential here.
A recent study showed that click-through rates for Facebook display ads were up 18% year-on-year in 2011. Not bad in an otherwise tough economic climate. Automotive isn’t the best-performing category, it should be noted, but it’s still in positive territory, as this study from TBG Digital shows.
Also to consider: the addition of Sponsored Stories and the new Facebook Timeline earlier this year are also boosting engagement rates and will do so for some time to come.
3. It’s where your competitors are…and where they are beating you.
As we’ve said recently, engagement is the new Holy Grail for digital marketers. Conversations beget conversions, which beget sales. No single sector is performing better in the fan engagement category than automotive. Why are the car-makers doing so well? The auto brands are good story-tellers. They produce some of the best creative, and their products hold immense interest for the public. Always have. (If only an FMCG marketer, pushing a brand of cleaning product or stock cooking cubes, had it so easy). But that’s not all. Auto brands do a better job of getting the consumer involved. Just think what Ford has done with the Focus, and, more recently, Chevrolet’s multi-channel effort around the Super Bowl this year.
One brand that is lagging here is General Motors. A quick glance of the auto leader board on Facebook, and you can see that GM and its brands land just four in the top 50, one of the worst performances of all auto brands. Who are the brands doing the best? The ones who can keep fans engaged with fresh content.
It should be noted, that not all of those in the Top 5 are prolific Facebook display-ad buyers. Certainly, Ferrari isn’t. It clearly gets by thanks to an avid fan base of drooling Ferrari fans.
But GM doesn’t have such a fan base. Never has. It needs to build excitement on Facebook (and elsewhere) for its models otherwise it will sink in to irrelevance.I predict it will be back on Facebook, perhaps as soon as next year’s auto shows.