GM’s Facebook Ad Debate

Planit Agency
May 17, 2012

General Motors, one of the largest advertisers in the United States, recently announced that it was canceling its $10 million Facebook ad spend, causing quite a stir among social media and marketing professionals.

According to The Wall Street Journal, which first reported GM’s plans to drop Facebook ads, GM spends about $40 million on its Facebook presence, with $30 million of that budget dedicated to content creation and just $10 million for Facebook advertising.

GM’s decision has ignited a wider debate about the utility of corporate ad spending on Facebook. Some experts are defending GM’s move saying that Facebook’s structure doesn’t cater to big-ticket items like cars, while others are siding with the social media giant by suggesting that GM’s advertising strategy was sub-par, to say the least.

Personally, I think GM is free to move their marketing budget around as they see fit, and there’s no way of knowing the ins and outs of why they found Facebook advertising ineffective. What I can say is that from a PR perspective, I think GM’s announcement to pull their Facebook ads is ill-timed—coming right before Facebook’s Initial Public Offering (IPO) is expected—and sends up red flags that point to another underlying agenda; whether that’s true or not, who’s to say?

I polled a few of Planit’s social media experts, Kelsey Reck and Jason Losover, to gauge their reactions, and they seemed to share a similar point of view on the situation. Here’s a summary of what they had to say:

Facebook ads can be extremely effective when used properly. The targeting that can be accomplished through Facebook’s ad platform is second to none. Additionally, the wide variety of ad types you can run—ranging from promoting a specific status update, video, poll, or fan page/app to sending people directly to a website or landing page—makes Facebook ads a highly versatile vehicle for getting the word out.

Many are saying that GM’s decision to pull Facebook ads lends credence to doubts about whether advertising on Facebook works better than traditional media. However, it’s possible that GM didn’t understand the nuances that go into running a successful Facebook advertising campaign.

Instead of spending $10 million on ads and $30 million on content creation, they could have spent less on content creation by encouraging their fans to create the content (which is free), and then use the Facebook ads to share that user-generated content to reach a broader audience.

Until we know exactly what kinds of Facebook ads GM was running and how they were using them, it’s hard to accept the fact that they just “didn’t work.”

There is definitely an art to successfully layering community engagement and lead generation through Facebook Business pages; it’s possible that GM is pulling the plug on Facebook advertising too early and perhaps should have reinvented their social media strategy before throwing in the towel altogether.

What do you think about GM’s decision to pull the plug on their Facebook ads?