Daily Archives: May 15, 2012

4 Reasons Why GM Stopped Advertising On Facebook

4 Reasons Why GM Stopped Advertising On Facebook

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4 Reasons Why GM Stopped Advertising On Facebook:

General Motors Co. won’t be advertising on Facebook using paid ads anymore.  The largest automobile manufacturer in the U.S. doesn’t find advertising on Facebook to be a good investment.  The company is supposedly unhappy with the effectiveness of the ads placed on the social media tech giant.

Companies are looking into the metrics behind advertising on social media and are trying to understand exactly how ads on Facebook help their bottom line.

Here are our top reasons why GM stopped advertising on Facebook based on our research, dealings with firms we’ve worked with and others in the marketing space from various sectors.  It’s tough for car dealers online in general because they need to know their local market.

4 Reasons Why GM Stopped Advertising On Facebook

  1. Facebook advertising may be suited better for lower priced items unless the firm is looking to increase brand awareness.
  2. No Facebook users will buy a car based on seeing an ad on Facebook alone without already having done some research on the car they want.  GM needed to focus on value added and positive conversational spillovers from reviews.
  3. GM ads do better when they are localized, targeted and come from regional car dealers via cable or local networks.
  4. GM probably had several conversion rates such as likes and clicks which served to help keep the company front-of-mind with consumers but the ultimate conversion – leads, that brought in new cars sales, are much harder to quantify.

Facebook ads aren’t for every firm and it takes several tries at varying advertising mediums to find the right mix for carmakers.  Perhaps GM’s brand goals where out of sync and they didn’t focus on engagement which has a long-term reward via natural organic social media augmentation.  There is some evidence however that social media advertising for automobile manufacturers must be highly strategic.

Facebook is set to offer shares to the public this Friday and the announcement that GM won’t be advertising on the site or mobile doesn’t mean Facebook ads won’t work for lower cost items that can easily be purchased via smartphones, tablets and desktops.