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Pulling out: Smart move of GM to leave Facebook paid advertisement?

Craig Robinson, editor at Facebook advertising management tool Qwaya.com, which specialises in Facebook advertisement, discusses the affects that General Motors pulling its advertising out of the social media platform will have on other advertisers, and whether it was the correct decision in the first place.

This is not the sort of news a company such as Facebook need at the moment – An advertiser not happy with the ROI on their Facebook campaigns. Now, this would be manageable if the advertiser is a small business, but what we are talking about here is General Motors questioning what Facebook actually return on paid advertisement.

The reason why this is a potentially bigger crisis than if average Joe’s advertisement efforts aren’t working is that big brand tends to set things in motion for other big brands. As Jim Edwards mentions in his Businessinsider article:

“how long before Facebook's other big advertisers—American Express, AT&T, Disney, Verizon—suddenly ask, Hey, where's the return on investment?”

Besides affecting and causing concerns for other Facebook advertisers, GM taking away $10 millions in Ad revenue for Facebook will of course have an impact on the stock market investor side of things. According to Ben Kunz on Businessweek.com, Facebook made 85% of their total revenue from the type of paid advertisement GM is moving away from.

Was it the right move for GM to pull out of Facebook paid advertisement? Well, the answer is both yes and no. If you look at it from the ROI perspective, then yes. It doesn’t make much sense for any business to advertise on any platform if there is a doubt in what you actually get out from it. On the other hand, and I agree to some extent with Jayme Soulati here from Soulati.com, you can’t expect that people will click on an Facebook Ad and by cars that way.

What really makes Facebook so unique is that you have the possibility to demographically target specific groups with targeted messages, in a way unlike with any other marketing channel. How often can you say “Hey! I’m going to run this radio Ad specifically to men between 25-30 that likes Led Zeppelin, owns a cat and live in the Bay Area”? Sitting down and saying that Facebook Ads just don’t work might be down to what mindset you are coming in with. There’s always been a mistrust and hesitation with traditional companies approaching social media efforts with a mindset that it’s only for making A to B purchases. If only GM saw their Facebook campaigning from a bigger brand building and social engagement perspective, I believe they would have still more to gain from this. Today’s Facebook users are not just going to click on an Ad and purchase a product.

Today and even more in the future, social context and social brand ambassadors will make the ROI from Facebook marketing efforts. We will now have to wait out and see how GM’s decision will impact the investor side of Facebook and if other bigger brands take this route to.

Craig Robinson, Editor at Qwaya.com – a Facebook Ad manager tool which specializes in Facebook advertisement. Craig has studied Social Engagement and communication science and writes about topics like these for Qwaya.

@Craig_Qwaya

Image courtesy of Pan Xunbin / Shutterstock.com

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