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General Motors: "Facebook Ads Aren't Worth It" 400

Posted by Unknown Lamer
from the could-be-no-one-wants-your-cars dept.
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.'"
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General Motors: "Facebook Ads Aren't Worth It"

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  • Whaaaa???? (Score:5, Funny)

    by crazyjj (2598719) * on Wednesday May 16, 2012 @10:19AM (#40016457)

    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?!?!?

    • Re:Whaaaa???? (Score:5, Insightful)

      by TWX (665546) on Wednesday May 16, 2012 @10:24AM (#40016539)
      Mmhmm...

      At least videos that manufacturers and marketers put up on Youtube, if they're good, can get a lot of attention. That Honda ad with Matthew Broderick, the Scion ad with the babes in bikinis eating donuts while one drives the new car doing donuts, etc... Plus the ads can be longer than fifteen, thirty, or sixty seconds, and if they're quality ads where they're amusing or informative beyond the normal "THIS IS OUR PRODUCT LOOK AT OUR PRODUCT" that you get in a minutes, they can be much more effective.

      Putting an ad video on Youtube (not as an ad, as a video) allows anyone to view it and allows references to it to be pushed through any number of means, not just through Facebook. This means more vectors for the ad to become "viral", and the more that see it, the better it is for the company.
      • Re:Whaaaa???? (Score:5, Informative)

        by AngryOldGuy (2639471) on Wednesday May 16, 2012 @10:33AM (#40016691)
        The problem isn't so much Facebook users (this includes pretty much everyone), but too high prices for non-targeted users. Yes, you can target by age and gender and such, but unlike with Google and AdWords you cannot target to specific interests or queries. Yet Facebook charges almost kind of prices per click than Google does.

        I was actually surprised when I was looking at the prices the first time. I had the idea that I could advertise and get people much more cheaper from Facebook. But the prices are ridiculous. It's much better to use AdWords or Bing's AdCenter for some actual targeted queries if the price is going to be the same.
        • Re:Whaaaa???? (Score:4, Insightful)

          by Magic5Ball (188725) on Wednesday May 16, 2012 @10:37AM (#40016755)

          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_.

          • Re:Whaaaa???? (Score:5, Interesting)

            by Anonymous Coward on Wednesday May 16, 2012 @10:54AM (#40017023)

            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:Whaaaa???? (Score:4, Interesting)

              by DarkOx (621550) on Wednesday May 16, 2012 @01:14PM (#40018753) Journal

              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.

              • by cayenne8 (626475)

                The giant inflatable gorilla may well be a more effective startegy that Facebook for that market.

                Not me....

                I only stop for the "whacky waving inflatable arm flailing tube man" displays !!!

                :)

          • Re:Whaaaa???? (Score:5, Insightful)

            by Joce640k (829181) on Wednesday May 16, 2012 @11:57AM (#40017805) Homepage

            The problem is that Facebook is

            ...[snip]

            Nah, the problem is they're spending 40 million bucks a year on "maintaining a facebook profile".

            I'm pretty sure they're doing it wrong. If that's really the way they do things it's no wonder they need bailouts.

            • Hey, $10 million of that $40 million was spent directly on ads. So it's only $30M they've been paying one guy to post once a day under their login. Totally a legitimate use of taxpayer funds.

              • Re: (Score:3, Funny)

                by cayenne8 (626475)

                So it's only $30M they've been paying one guy to post once a day under their login. Totally a legitimate use of taxpayer funds.

                Hey...give the poor guy a break...out of all that, he has to pay union dues too you know...

                :)

      • They could license the tune from "Get on my Horse" from Weebl and turn it into "This is our car, our car is amazing".

        • For the love of Turing, could you please shut up? I am so fed up with that song, now imagine hearing it every 10 minutes between your favorite shows!

    • by Anne_Nonymous (313852) on Wednesday May 16, 2012 @10:28AM (#40016605) Homepage Journal

      If GM wants to target their demographic they need to advertise on late night AM radio, not the internet.

    • Tunnel Vision (Score:4, Interesting)

      by eldavojohn (898314) * <.moc.liamg. .ta. .nhojovadle.> on Wednesday May 16, 2012 @10:29AM (#40016613) Journal

      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?

      • by h4rr4r (612664)

        I think they would want to sell a 2012 Sonic, which replaced the Aveo.

        Not sure how shitty it is, but I am going to be test driving one as it is a car I can buy in cash and comes in hatchback and stickshift.

    • Re:Whaaaa???? (Score:5, Informative)

      by geekoid (135745) <dadinportland@ya ... m minus math_god> on Wednesday May 16, 2012 @10:34AM (#40016717) Homepage Journal

      It's nice that you don't understand th demographics of Facebook, and still not let your ignorance prevent you from writing a post.

      Well done.

      You know who is a large demographic of Facebook users? Married Women 25-33. The second largest is men in the same age range.
      Your example is the minority.

      That's not the problem, the problem is that it's global. The majority of users are outside the US. So, selling 40,000 dollar car to someone in turkey isn't exactly going to work.
      Here is a breakdown.

      http://www.kenburbary.com/2011/03/facebook-demographics-revisited-2011-statistics-2/ [kenburbary.com]

      • by Baloroth (2370816)

        So you are saying Facebook is so bad at advertising, they would put an ad for a US car company which is more or less completely unavailable in Turkey on a Turkish user's page in the first place?

        I wouldn't call ~1/3 of the US population a small number of people, nor a problem for advertisers. It doesn't matter that the majority of Facebook users aren't in the US: it matters that Facebook is a poor place for ads in the first place (perhaps because Facebook isn't very good at targeting them, or because people

      • I wouldn't say Facebook's global nature is the problem either. The fact that the majority of its users are outside the USA doesn't mean any fewer USA based users are viewing a given advertisement. I'm sure FB even allows targeting the ads to the extent where you can restrict them to only be viewable by people coming from particular countries. (I remember trying out a bit of FB advertising myself, for my on-site PC repair business, and I believe it even let me target the ads down to within so many miles of

      • Re:Whaaaa???? (Score:4, Informative)

        by tixxit (1107127) on Wednesday May 16, 2012 @01:47PM (#40019183)

        That's not the problem, the problem is that it's global. The majority of users are outside the US. So, selling 40,000 dollar car to someone in turkey isn't exactly going to work. Here is a breakdown.

        We used FB for some ads at the last place I worked. They are actually incredibly targeted. On a location scale, you can target people in a single city, no need to even talk about countries. Moreover, you can target by age, education, etc. So, you have a $80k luxury car want to advertise? You can target people over 40 with post secondary education. What about a "hip" econobox? You can target young, recently graduated 20-somethings. You can even choose to just include just people with majors that will most likely have jobs. Check out FBs page on targeted advertising. [facebook.com]

    • Re: (Score:3, Insightful)

      by thrillseeker (518224)
      Who needs to advertise when your checking account has unlimited overdraft protection courtesy of the taxpayer?
  • by eldavojohn (898314) * <.moc.liamg. .ta. .nhojovadle.> on Wednesday May 16, 2012 @10:21AM (#40016487) Journal
    If you're perhaps wondering about how this works out for smaller businesses, NPR built an anecdote out of a small locally owned pizza joint in New Orleans [npr.org] trying their hand at targeted social advertising. For $240 they doubled their Facebook fans (at the cost of nearly $1 per 'like') and weren't so sure they'd see the return on that money after asking customers one evening where they heard about Pizza Delicious.
    • That story doesn't ask or answer the question: Was there more business coming in after the Facebook ads?

      They just asked if the people coming in the door were there because of Facebook.

      Which one is more important?

      • by jitterman (987991) on Wednesday May 16, 2012 @10:55AM (#40017053)
        They don't believe so (I also heard the story this morning), as they asked people who came into the store if they had done so because of the FB exposure. No one had (though one generous soul donated $10 on line because of it). Not a great way to spend $240 on advertising.
      • by slack_justyb (862874) on Wednesday May 16, 2012 @11:19AM (#40017339)
        It is important to find out why more sales are occuring. Also, from the story, it doesn't sound like they had a huge return, so I would guess that sales growth was about flat. The pizza place most likely will get more interest from the NPR story, than from Facebook. That's because it's free to "like" someone or something, so people do not value a "like" over actually forking over cash. Also, Facebook ads are about par with AdWords. Google makes a good chunk of cash on AdWords, but nowhere near the realm that Facebook will need to justify its IPO.

        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 heard that this morning. Finally someone said they would *donate* $10 to their cause. I doubt many bigger companies will have that kind of response.

      The thing I think Wall Street is missing is that people tune those ads out or block them. Maybe Facebook has come up with some new methods to lock people into getting the message but if they make it too onerous, people will simply quit Facebook.

      I also heard an analysis on NPR yesterday that talked about how the price to earnings was sky high and to actua
      • Also, with more employers using Facebook to spy on employees, as well as spouses spying on spouses, etc, there is a disincentive for users now building.

        And as Facebook tries to cash in on the associations and data mining, users will have to be forced to look at even more ads.

        I wouldn't bet on it being a good investment.
      • The thing I think Wall Street is missing is that people tune those ads out or block them. Maybe Facebook has come up with some new methods to lock people into getting the message but if they make it too onerous, people will simply quit Facebook.

        I tune them out so well that I still can't picture where the ads are on facebook.

        • Or, you're tuned in, and don't even know it. Like subtle product placement in movies. You're being advertised to, and you don't even know it... The best advertising is advertising that makes you think that you developed a desire for the product independently, rather than being advertised to.
      • by Baloroth (2370816) on Wednesday May 16, 2012 @10:48AM (#40016923)
        I also heard on the radio this morning that one survey said 50% of Americans think Facebook is a fad. That doesn't bode well for their future, even if most Facebook users aren't American.
    • by wcrowe (94389) on Wednesday May 16, 2012 @10:47AM (#40016917)

      I'm not a fan of Facebook -- deleted my account last year -- and I am inclined to believe that they are overvalued. However, I don't think NPR's experiment is valid. Let's say there's this place I know called Bob's Bar where they also serve pizza. A number of my friends know about Bob's Bar too. Let's say Bob's Bar has a Facebook presence, and buys some advertising targeting myself and some of my friends. Then, while on FB, me and some of my friends (some of whom have never been to Bob's Bar) decide we're going to meet at Bob's Bar for drinks and pizza on Friday night. If someone interviewed us at Bob's Bar, neither me nor any of my friends would say we had heard about Bob's Bar via FB. But that doesn't mean the advertising didn't pay off. We could have met up anywhere for pizza and drinks, but because Bob's was on our collective FB radar, we went to Bob's.

  • by Xphile101361 (1017774) on Wednesday May 16, 2012 @10:22AM (#40016503)
    but that doesn't seem to stop anyone. I've found that marketing rarely has ever been able to prove that the money they spend actually generates returns.
    • but that doesn't seem to stop anyone. I've found that marketing rarely has ever been able to prove that the money they spend actually generates returns.

      Most of the "Proof" is kept secret. Companies all the time try an ad campaign in just one market before going national. That, and hiring people to view ads while eye tracking and what is essentially a polygraph to monitor their responses to specific ads.

      The problem is, even if the marketroids do science, it's a master marketer that sells his ads to the company. (internal or external) Even if the science says one thing, he's going to spin it so that he gets paid the most he can get.

      Yes, the Marketi

    • by Sir_Sri (199544) on Wednesday May 16, 2012 @10:39AM (#40016793)

      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).

    • 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.

  • by conner_bw (120497) on Wednesday May 16, 2012 @10:23AM (#40016517) Homepage Journal

    A new generation of young adults who don't want cars in the face of an oil crisis, austerity, and environmental concerns...

    On a more serious note I totally feel for you GM. I spent 20 million advertising my "INVASIVE ANAL PROBE CONSULTING" business and it's just not working. Must be Facebook.

    • by Anonymous Coward on Wednesday May 16, 2012 @10:33AM (#40016695)

      On a more serious note I totally feel for you GM. I spent 20 million advertising my "INVASIVE ANAL PROBE CONSULTING" business and it's just not working. Must be Facebook.

      Facebook is not your target audience. You should try direct marketing to the TSA.

    • by bhcompy (1877290)
      I know of no young adults that don't want cars. They're just too poor to verbalize their desire.
      • by flirno (945854)

        I don't know of any that pay attention to ads on facebook however -- younger generations are just as good at screening out visual noise as I am and I am pretty good at it.

    • by Tyr07 (2300912)

      No, they can't afford cars because the gas prices keep going up so much.

      • by vlm (69642) on Wednesday May 16, 2012 @11:19AM (#40017331)

        Gas is really cheap. For what my young male cousin is paying in monthly car insurance, despite having a clean record, he could fill up almost weekly and drive about one thousand miles per month, or about 30 miles per day, which is actually a hell of a lot of driving. Just for the cost of insurance alone.

        Of course he also has to pay for the car itself, and maintenance and afford to pay for whatever it is he's driving to, unless he's just cruising or getting into trouble with friends ($20/person average movie cost, shopping, blah blah).

        Gas is probably the cheapest cost of owning a car.

  • by sglewis100 (916818) on Wednesday May 16, 2012 @10:25AM (#40016549)
    Wait... $40 million dollars, a quarter of which ($10 million) was advertising. The rest was $30 million dollars of which $0 went to Facebook (accounts are free). Where did the rest go, does it really take $30 million dollars of payroll expenses to have a couple of people post status updates and photos? I realize they probably had review teams, photographers, marketing folks, customer service, etc - but $30 million dollars seems absurd.
    • by h4rr4r (612664) on Wednesday May 16, 2012 @10:39AM (#40016785)

      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.

      • Yeah. I hate GM, but I'd LOVE their page for a car.
      • by localman57 (1340533) on Wednesday May 16, 2012 @10:53AM (#40017005)

        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.

    • by Bogtha (906264) on Wednesday May 16, 2012 @10:43AM (#40016833)

      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: (Score:2, Insightful)

      by bhcompy (1877290)
      What do you expect from Government Motors?
  • by Kagato (116051) on Wednesday May 16, 2012 @10:27AM (#40016585)

    Hey GM, I'll maintain your profile for $2 Million a year. By Grabthar's Hammer, oh what a bargain!

  • by Hadlock (143607) on Wednesday May 16, 2012 @10:27AM (#40016587) Homepage Journal

    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!"

  • by Anonymous Coward on Wednesday May 16, 2012 @10:29AM (#40016611)

    Facebook has many eyeballs, but those eyeballs don't on average stick around as long as they do for television, or even print media.

    If you're a business and you're looking for real bang-for-buck, you're talking Hulu -- the 'middle ground'.

    Facebook IPO'ing now is a cash out, not a strategic move. If you remove Zynga from Facebook, it's not really worth anything.

    One day a social network will become something permanent, but Facebook won't be that network.

    • by rgbrenner (317308)

      Businesses do not care about 'eyeballs' when it comes to online advertising. That was the way old media sold ads - the number of tv views; radio listeners; etc. Because there was no way to track the response from the ad.

      But online media has tracking. You can tell exactly what % purchase; how much each customer is worth; etc, etc etc. And any ads that don't have a clear ROI eventually die. Banner ads didn't disappear because of the number of 'eyeballs'.. they disappeared because they have terrible metrics.

      Go

  • by hherb (229558) <horst@dorrig o m e dical.com> on Wednesday May 16, 2012 @10:33AM (#40016689) Homepage

    If GM had spent that money on a bit of engineering to get their cars a bit closer to the efficiency of European cars, perhaps people would buy them more? No amount of avertising money will get enough people to buy yesterdecades technology cars

    • by aclarke (307017)
      ABSOLUTELY. If GM made better cars, more people would buy them. My truism is that GM makes cars for people who hate cars and hate driving.

      Some of their cars might be getting better, but if so, I haven't seen sufficient evidence of that that based on my occasional rental car. GM needs to make better cars, and then somehow convince the rest of us who have given up on them that they make better cars. Not just better cars than they used to (I'm sure this is true), but better cars than Toyota, Kia, and BM
  • by LordNicholas (2174126) on Wednesday May 16, 2012 @10:35AM (#40016727)

    "I know that 50% of my ads are effective, I just don't know which 50%"

    Attributing conversions (ie, purchase of a new car) to ads is tricky for any business, let alone one like GM where the eventual purchase takes place offline. You can track leads from Facebook ads to your website, but how can you be sure the ads contributed to a purchase down the road? And even if you ask someone who comes into a car dealership "Did you see our ad on Facebook?" or give them a coupon to print and bring with them, how can you be sure how much of that purchase was driven by that ad vs the ads she saw on TV vs the radio vs print?

    Facebook ads command a hefty premium over more mainstream online ads because of the ability to finely target specific types of people (ie, people who have "Liked" GM, people who have listed "cars" as an interest, people who have mentioned the Chevy Volt in a conversation...). It's a big problem for Facebook if brands can't attribute this premium ad spend to a measurable increase in sales.

  • Where is all this money going? You would think online advertising would be significanlty cheaper than "legacy media".

  • What? (Score:4, Funny)

    by Kozar_The_Malignant (738483) on Wednesday May 16, 2012 @10:39AM (#40016775)
    There are ads on the internet? Who knew. Seriously, even people who don't use ad-blockers don't see the adverts. People have just conditioned themselves to not see them.
  • by timeOday (582209) on Wednesday May 16, 2012 @10:40AM (#40016807)
    Facebooks's pricing has to reflect their ability to do targeted advertising, which is valuable to businesses selling niche products. But if you're selling mainstream products like cars or beer, then broadcasting the same message to everybody (or at least broader groups, e.g. TV show demographics) is probably more efficient.
  • Not relevant ads (Score:5, Insightful)

    by hawguy (1600213) on Wednesday May 16, 2012 @10:41AM (#40016815)

    I've almost never intentionally click on a FB ad since they are generally not relavant. Right now, my FB shows 6 online dating ads (even though I haven't been single for over 5 years), one ad from Wells Fargo asking me to help write a love letter to San Francisco (what!?) and one Marathon discount ad that might be relevant, but when I clicked on it, the site wanted my email address before it would even show me their site.

    I use Google a lot (email and searches), and I typically click on one Google ad a day because their ads are typically quiet relevant to me. If a little creepy - I searched a Chevy Aveo mentioned in an earlier comment, and now my current Gmail ad is from Ford. Creepily relevant.

    • by vakuona (788200)

      On Facebook, you don't get messages from price comparison sites which will indicate that you have been looking for something. If I go to moneysupermarket.com looking for car insurance, and I give them my email address, they send the results to my Gmail account, and Google now knows that I am looking for car insurance, so they give me car insurance ads.

      Google has much better contextual information to use to target ads. Facebook can't go by your likes. That is a huge disadvantage. Google ads work because they

  • by John3 (85454) <john3@corn[ ]s.com ['ell' in gap]> on Wednesday May 16, 2012 @10:43AM (#40016837) Homepage Journal

    Just my two cents as a small business owner that has dabbled in all the online media options...spending money on social media is a waste, especially if you're a company that extends their reach beyond a single community. For local business owners, Facebook can be a great tool to send updates on events such as new interesting products, employee recognition, etc. Many customers like keeping in touch with their local business, whether it's a hardware store (like mine), restaurant, or other business that may hold special events of interest to the community. All that is free, and spending beyond that seems to be a waste of cash.

    Making sure you are listed accurately on Google will cover 95% of your needs currently. Update the Place page, and if you sell products make sure you're uploading a data feed of your inventory. Both are free and generate tons of traffic to your website plus lots of in-store visits (if you have brick and mortar locations). Adwords is a waste of money IMHO...we won the Google/Amex video contest for Small Business Saturday and it included $5000 in Google adwords funds. I've burned through about $4000 in a month and a half and have seen negligible incremental business even with click-through rates in the 2% and higher range (and ad position average of 1.6). Sure, it's nice to know people are visiting our site, but plain old Google search still generates 95% of the traffic versus 2% from adwords.

    • That's interesting. I am considering a Facebook push for a local organization (an a cappella chorus) in hopes of targeting a specific demographic (location, age, sex, interest in vocal/a cappella music). The people we tend to find aren't looking for us; our best recruitment has been in direct contact with people we run into that happen to enjoy singing. They don't know they want to join a vocal group until they try it. Putting general advertising out there is pretty spotty (and expensive, even in our small

  • by sl4shd0rk (755837) on Wednesday May 16, 2012 @10:47AM (#40016915)

    Seems odd to me how corporations can file chapter 11 and a few years later still have millions to waste on shttiy advertising mediums.

  • Facebook is Write Only.
  • Facbook just needs to help with the demographics. Facebook should be able to determine if you have a small penis and pitch the biggest SUV they make to the customer. Over fourty? Sportscar. Eighteen? Ford Fiesta.

    They also need to tweak their advertising. Here's my pitch: "Imagine how much larger your penis will feel if you drive a Yukon!" "Pick up chicks that are half your age in a Corvette!" "Get between two different places in a Ford Fiesta! Sure it sucks, but it's all you can afford!"

    They can't reall

  • by Cajun Hell (725246) on Wednesday May 16, 2012 @10:55AM (#40017039) Homepage Journal

    General Motors spends around $40 million per year on maintaining a Facebook profile and around a quarter of that goes into paid advertising.

    My elite math skills tell me they are spending $30 million dollars per year on Facebook, where none of that $30M can be accounted for by paid ads.

    Until I get a clear understanding of that, I have to think that some kind of legendary incompetence is happening at GM, so I don't know if I get much out of their conclusions.

    Assuming it costs $50k/year for GM to pay someone to upload pictures of their cars, type status updates ("Looking forward to tomorrow's release of car X!" or "OMFG car X is sooo beautiful and fast, I don't even care what it costs!") I can't help but imagine they're paying 600 people to do that kind of work.

  • by JustAnotherIdiot (1980292) on Wednesday May 16, 2012 @10:57AM (#40017087)

    General Motors spends around $40 million per year on maintaining a Facebook profile and around a quarter of that goes into paid advertising.

    So, that's 10 million into ads, where does the other 30 go?
    If you're seriously paying some shmuck 30 million dollars a year to upkeep a facebook profile, fire him.
    I'll do the job for only 5 million.

  • by HangingChad (677530) on Wednesday May 16, 2012 @11:02AM (#40017141) Homepage

    I was advertising one of my ebooks with adwords and decided to try FB to see how it compared. Though the number of impressions was quite high, sales immediately tanked. As soon as I shut down the FB ad run and switched back to adwords, sales went right back up.

    A lot probably depends on the product you're advertising. All I know is my target market wasn't on FB and that is apparently true for GM as well. I'm just glad I tested it before moving a bigger chunk of my advertising.

    My sense is people go to FB to advertise what they're doing, not go shopping.

  • by msobkow (48369) on Wednesday May 16, 2012 @11:07AM (#40017181) Homepage Journal

    I don't think it's a problem with Facebook. I think it's a general issue of society being over-saturated with ads.

    Take GM for example. They advertise on TV, radio, in magazines, in newspapers, and online through every venue available, including Facebook and YouTube. Everywhere you turn, you will see GM advertising.

    People are burned out.

    They don't care about supposedly "new" products that are more of the same with minor tweaks and new version numbers or names.

    GM's real failure is not in their advertising, but in their products. With the sole exception of the Volt, every single vehicle they sell could be rubberstamped from a Ford, Chrysler, Honda, or other factory and the customer wouldn't know the difference if there was a GM logo on the front.

    Welcome to the mainstream, GM. You're a commodity, indistinguishable from a horde of "me, too" vendors.

    Please feel free to blow a few million more on another Superbowl ad that will garner you maybe a few thousand actual unit sales.

    In the meantime, I will not share your YouTube videos on Facebook or "like" your page because I don't like advertising, and the only thing I get by "liking" a vendor's page is advertising posts thinly disguised as "information" that doesn't actually tell me anything useful. If you want me to shill, pay me. :P

    Only a fool would astroturf for a vendor without compensation. You'd lose all your friends and get nothing in return.

    And personally, the respect of friends and family is worth far more to me than you'd be willing to pay me to shill your crap.

  • by Random2 (1412773) on Wednesday May 16, 2012 @11:08AM (#40017203) Journal

    This is something that has always bugged me about advertising: why do large corporations need to do it? For companies like GM, GE, Ford, Google, Microsoft, Johnson and Johnson, etc, they have a well-known brand that has been around for decades. Although there are people constantly entering and leaving the market, these companies have such an established position that their brand will always be circulated in discussions about products similar to the ones they make/sell. Rather than pushing their brand constantly, it would seem that the only things they'd really need to occasionally advertise are a product or nifty idea they've come up with.

    To make a specific example, consider car sales in the US. With a few exceptions, the majority of sales are handled by a dealer who tries to ascertain the customer needs/wants and translate that into an available vehicle (ignoring any 'screw the customer' factors). It's socially established that there will always be a variety of cars at a dealer and that one can go in to find what they want, and they work with the dealer to meet their needs. From that perspective, it shouldn't make sense for go GM to spend millions on ads to random places pushing 'the car of the season', because there's an already established place to get that information. Instead, they should focus on promoting local car dealers with GM products, because that's what the populace would be interested in learning about. They might consider promoting a catalog/directory describing each car and feature or a general fund for independent car reviews if they're looking to target the people actively looking for car information; but they have an established market that will always be around until it's phased out by cultural and social changes.

    Similarly, Microsoft can always expect people/companies to want on OS, J&J can expect a need for adhesive bandages, etc. And, they can expect people will actively seek these out, and that they are so commonly expected that advertising wouldn't do much to inform people of the existence of these products/services. If they can always rely on that, why bother advertising for those products and services?

    Now, advertising makes a lot of sense for a small company trying to get its name out to the world or a company trying to sell a genuinely new or unexpected product, but for established markets and big companies it just doesn’t make sense to me why they'd even bother with advertising like Ads on Facebook.

  • by Karmashock (2415832) on Wednesday May 16, 2012 @11:32AM (#40017485)

    It's fine for anything people get enthusiastic about and want to form social communities around. So bands, books, movies, various clubs, and other things that people form human attachments around are a good target for facebook. But a car even if you really love your car isn't the basis to form a relationship with someone else that might happen to have the same brand much less model of car.

    Who knows the name of their mechanic let alone the name of the every guy in town with the same make of car? If you're a band then having a facebook page makes a lot of sense.

    I'm sure there are car buying websites... sites that specialize in reviews for cars. That's where I'd put the money. If someone goes online to figure out which car to spend money on, they're likely going to wind up on one of those sites. Facebook is a waste of time for that sort of thing.

    Every company from fabric softeners to mattress companies wants a facebook page. Utterly useless. Unless you're in a business that people form human attachments around don't waste your time with facebook.

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