GM made huge waves across the industry when they announced earlier this week that they are pulling their $10MM Facebook ad spend. Many industry journalists are inferring it simply wasn’t working for GM, and feels they are walking away too soon. Forbes has an interesting perspective, but they do call out that GM came under criticism from Facebook for having multiple agencies manage their Facebook ads.
My take: Facebook initially launched pages that brands could build with the intention that anyone who “liked” (or at the beginning, became a ‘Fan” of) the page would receive any communication being distributed from it. They encouraged brands to build ad campaigns on Facebook around getting “likes” so the brand could be in constant contact with their audience. Then Facebook started reducing brands reach, and they were only able to communicate with a fraction of the audience that “liked” their page. Then recently Facebook announced that brands can get reach again, but they will pay handsomely for it. GM is taking a stand. One of our clients even refers to the social net as the “Facebook Mafia,” and GM is simply reacting to a business model that has little respect for the advertisers that fund it. I expect to see at least one more big brand follow in suit, but as a whole, Facebook will carry on as they have; making up the rules as they go, and continuing to make it increasingly difficult to prove direct ROI from a Facebook-centric marketing campaign.
An interesting move on GM’s part. If they’re not taking a stand, however, this is premature. A great move in principle, but that’s it.