General Motors: "Facebook Ads Aren't Worth It" 400
Fluffeh writes "General Motors spends around $40 million per year on maintaining a Facebook profile and around a quarter of that goes into paid advertising. However, in a statement, they just announced that 'it's simply not working.' That's a bit of bad news just prior to the Facebook IPO — and while Daniel Knapp tries to sweeten the news, he probably makes it even more bitter by commenting 'Advertising on Facebook has long been funded by marketing budgets reserved for trying new things. But as online advertising investments in general are surging and starting to cannibalize spend on legacy media, advertisers are rightfully asking whether the money spend is justified because it has reached significant sums now.'"
Heavy social media users are typically losers. (Score:1, Interesting)
Narcissistic, insecure, low self esteem [dailymail.co.uk], they're on facebook to "be seen" and try to feel that their lives are worth something.
Social media is a failure.
Marketers: 1, Press: 0 (Score:5, Interesting)
Marketer 1: "hey, we don't have enough budget to advertise on Facebook"
Marketer 2: "how do we reach the facebook crowd without spending money?"
"Marketer 1: I know! Let's do a press release that says we can't afford advertising on Facebook, but spin it as us not wanting to advertise on facebook"
Marketer 3: "that's a great idea! let's announce it just days before facebook's public IPO for maximum impact!"
Tunnel Vision (Score:4, Interesting)
You mean my loser friend from high school who spends all day in front of his computer posting updates on his shitty life *isn't* the perfect person to target with an ad for a $40,000 new car?!?!?
Probably not. Although convincing him that the 2011 Chevrolet Aveo [rankingsandreviews.com] (with an MSRP of $12,000) is the best investment he could make now that his rusted out junker needs a new transmission might be worth a few bucks to GM. If he has income and can get an auto loan from a bank, they're interested in him. America is full of losers like your friend that still need cars to go to their shitty job so they can afford their shitty food, pay their shitty rent and make shitty car payments. Transitioning these sales strategies of "most dependable" or "safest in its class" from TV to online hubs of entertainment isn't too far of a stretch, is it?
Re:$30 million dollars?!?!? (Score:5, Interesting)
For $40 million it would have been better to give away cars worth that much. Gets them on the street for people to see, gets folks talking about GM giving away cars. I bet giving away cars would generate some buzz on facebook without all the extra work and cost.
Re:Neither are Super Bowl Ads... (Score:5, Interesting)
Well that's the case with all advertising, it's hard to know if, or how it ever directly pays off. For some things (like cars) you don't seriously expect someone is going to buy a car because they saw it on TV or Facebook or because GM owns a sports stadium. You're trying to create some hard to define 'brand awareness' so that when people think of cars they think GM, and give them enough of a sense of what you offer that they'll show up at a showroom.
It sounds silly to say 'think GM' when buying a car, but it isn't. You want people to think GM is doing well enough that they can afford advertising, that they're in tune with whatever market facebook connects to (1/7th of the planet, and probably half the people in the world who are able to drive), in the case of a stadium you're creating the false impression they're being good corporate citizens, that sort of thing. If people don't see you advertising but they see someone else's then they assume you don't really have anything worth selling.
In terms of internet advertising in general I think this is tricky. Just because you don't click on an ad doesn't mean you didn't see it, and doesn't mean it isn't contributing to your 'think GM when buying a car'. But if people are using ad blocking software they may not even be seeing your ad, so you get nothing out of it. Some people are completely overwhelmed by 'computers' and trying to advertise to them is about as useful as sending out GM fliers to nursing home patients. So I could see that facebook ads for cars may be worthless. That doesn't mean facebook ads for everything are worthless, or if they maybe need to use a different advertising approach on facebook (different size or style of ads, celebrity pitches, that sort of thing), but my guess is that Facebook ads don't have a lot of return for things that aren't related to Facebook, which is why, at least around here, it has only been this year that we finally started seeing ads that weren't extremely sketchy, and right now we don't see very many ads for things that aren't facebook related (although right now it's showing me a Diablo III ad).
Re:$30 million dollars?!?!? (Score:4, Interesting)
Some of it probably went towards building Facebook apps. I've seen a lot of big brands build pointless Facebook apps to promote things via games, competitions, etc. They've got big advertising budgets and not much imagination, so they throw a tonne of it at digital agencies to come up with this crap. The agencies are more than happy to keep quiet and take their money instead of telling them they shouldn't be doing that.
Re:Neither are Super Bowl Ads... (Score:5, Interesting)
More precisely:
I've found that marketing rarely has ever been able to prove that the money they spend actually generates returns that exceed the oney spent.
Ironically the except IS superbowl ads.
" Earlier research by some of the same scholars also found that films advertised during the Super Bowl see as much as a 40 percent boost at the box office."
http://www.slate.com/articles/business/moneybox/2012/02/i_paid_4_million_for_this_.html [slate.com]
Of course, their are other factors as well. If I buy an ad, that mean it's harder for my competitor t buy an ad, pop culture benefits, etc:
http://money.cnn.com/2011/02/03/news/companies/super_bowl_ads/index.htm [cnn.com]
But is does seem superbowl ads are worth it in many cases.
Re:$30 million dollars?!?!? (Score:5, Interesting)
For $40 million it would have been better to give away cars worth that much. Gets them on the street for people to see, gets folks talking about GM giving away cars. I bet giving away cars would generate some buzz on facebook without all the extra work and cost.
Most marketing guys would take exception to this. Giving away your product is very dangerous, as free and worthless are concepts that the brain tends to lump together.
Re:Whaaaa???? (Score:5, Interesting)
The problem is that Facebook is optimized for narcissistic _self_-promotion through _telling_ your echo chamber how great you are, not for _showing_ others your status even through the usual consumption displays that are required to promote _others_.
Nobody, and I do mean nobody, buys pointless shit like narcissistic people do. They are the ones who post up the most personal information about every last thing. They are the ones who just have to make sure everybody sees what location they're "logged into" at the moment. So in that regard, Facebook is a Utopia for advertisement.
The problem as I see it, is how the ads are actually displayed. I honestly hardly notice them at all, myself, and even if they were interesting and noticeable there's no way in hell that I trust clicking on it. Clicking ads in my mind is like saying "Why yes, I think I will take some Malware for my computer, now that you mention it. Thanks! Boy that really fucked my plan up. Got any more?"
Contrast that to something like Youtube, where they get annoying, but not only do you have to do nothing, you also aren't actively jumping through random, unknown web sites.
If FB was smart, they'd require advertisers to have a FB group, and eliminate outside linking entirely.... ads would link to the FB page of the ad purchaser. And here's where they throw in the bait- add the long-coveted 'Dislike' button on the ad pages and company groups. Streisand Effect would make more eyes hit those ads than anything in history... and I'm not exaggerating.
Re:Point of fact (Score:5, Interesting)
$30 million isn't as much as it seems when taking into account operating costs, salaries, consultant fees, and other expenses.
OK divide it out. I'm not on FB so I can't directly comment, but a good metric might be posts per day. $30M is $82192 per day. I can't imagine following a feed with more than 10 posts per day, unless its a pr0n star posting pics or something, too spammy. So thats $8219.20 per post.
Someone in India would make spam posts for maybe $0.01 each, but they would be terrible. So stand on a street corner at a university with a stack of $20 bills and give one to each marketing major who makes a decent post. That leaves $8199.20 per post for executive bonuses.
I checked some graphics artist freelance rates and they seem to charge about $75/hr. 10 posts per day is 2.4 hours work per post. So one dude (more realistically you need 5 dudes for 24 hour 7 day week coverage of a slot) could do all the work for $180 per post. That leaves a mere $80392 per day left over for the office slush fund, foozball tables, exec bonuses, etc. Honestly I think they're earning their $75/hr if they can think of ten interesting things to post, 365 days per year. I really like my ancient Saturn, but I'd run out of ideas the first week if not sooner.
Re:NPR Looked at Pizza Delicious (Score:5, Interesting)
So that is to say, that maybe Facebook will be as succsessful as Google and maybe a little more so. However, because Facebook is coming out of the gate with such a high IPO, they are banking on being eleven times more successful than Google every year. I find that extremly hard to swallow. However, once Facebook is public they'll need to start spending like crazy to prove that their system works. There are a lot of critics about how successful their model is and it won't be easily overcomed.
In my opinion, and its just that my opinion, Facebook has set themselves up for failure with their public offer. Eventually investors are not going to see the insanely high super returns they are expecting from a $100 billion company. Once they start loosing investors and thus capital, Facebook is going to be under a lot of pressure to return to a $100 billion company. The type of pressure that usually breaks companies rather then build them back up, usually the CEO brings some calm to the situation and total company collaspe can be avoided. I just don't see Mark Zuckerberg being that slick of a guy to be savy enough to convince business types that everything is under control. Panic will ensue and crap will hit the fan. Where it goes form there is anybody's guess.
I've done some analysis of Google vs Facebook ads (Score:5, Interesting)
Facebook can be useful for establishing a social presence and communicating with communicating with people, but I have serious doubt about its advertising. It has nice targeting by demographics but it just does not seem to perform.
Re:Whaaaa???? (Score:4, Interesting)
Depends on your product. I would expect Facebook to be a strong market for hipster style affordable bling. Guys and Gals who really want to be seen with their mePhone, StarSmucks Coffee cup, and Abercrumy T-Shirt.
They may not be the target demographic for say Tiffany or $40K+ automobiles. GM needs to sell less expensive cars as well but that market is not discerning. Getting someone to choose a Sonic over a Civic is a matter of getting them into your dealership first in most cases. The giant inflatable gorilla may well be a more effective startegy that Facebook for that market.