Fush And Clicks

A Blog On All Things Digital (And Not).

GM Pulls $10M Facebook Campaign Because Its Ads Don’t Work

on May 16, 2012

Interesting article from the Business Insider  stating that over in the States, General Motors has pulled $10 million in ads (its entirety) from Facebook because they don’t work (source from a Wall Street Journal reporter’s Twitter page).

GM is the first major advertiser to show disappointment with Facebook and reduce  entire spend so publicly. GM is the third-largest advertiser in the U.S., and although the cancellation isn’t material to Facebook’s numbers it will be psychologically devastating to sales management there. The Journal reported:

  • GM, started to re-evaluate its Facebook strategy earlier this year after its marketing team began to question the effectiveness of the ads. GM marketing executives, including Mr. Ewanick, met with Facebook managers to address concerns about the site’s effectiveness and left unconvinced advertising on the website made sense, according to people familiar with GM’s thinking.

The Journal also noted that of the $40 million GM devotes to creating content for Facebook, only $10 million of it actually went to Facebook in the form of paid media. The report comes awkwardly in front of Facebook IPO, expected Friday. It’s part of a drumbeat of background noise to the offering, suggesting that advertising on Facebook is less effective than some clients would like.

Click-through rates on Facebook have long been lower on average than that of Google, largely due to the environment and type of user, but ultimately attention should be paid to clicks and conversions. The two platforms have vastly different environments – someone searching on Google is actively interested in information, whilst the Facebook user is operating in a social space. These factors should be the guidelines to planning decisions based on the specific objective of the campaign.

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