About the Steve O Zone

Tuesday, May 22, 2012

The Real Reason GM Left Facebook

So GM is pulling its $10 million Facebook ad budget and we all are now left to ponder who will be next, right?

facebookIn their official statement GM marketing chief Joel Ewanick said “We regularly review our overall media spend and make adjustments as needed. This happens as a regular course of business and it’s not unusual for us to move our spending around various media outlets – especially with the growth of multiple social and digital media outlets. In terms of Facebook specifically, while we currently do not plan to continue with advertising, we remain committed to an aggressive content strategy through all of our products and brands, as it continues to be a very effective tool for engaging with our customers.”

Blah, blah and blah.

GM is pulling their money from Facebook just as they would pull an account from an ad agency. There is no difference.

See, somewhere along the way to IPO nirvana the folks at Facebook forgot the one cardinal rule in advertising – always keep the client happy and do whatever you can to please them.

Anyone who has been in advertising for longer than 30 seconds knows this is the way of life. Like or not, and a lot of times we don’t like it, that is the way it is. How many times of those of in the ad agency world have griped and complained about a given client’s decision to change this or alter that only to realize at the end of the day, the client is paying the bills – literally?

Fearless Forrester Forecaster

In what maybe a bit of a Nostradamus-esque bit of foresight Forrester analyst Nate Elliott wrote last November that he hasn’t “spoken to many companies that are thrilled with their Facebook programs.”

And on May 14th, on the eve of the announcement from GM and on the quasi-eve if you will of Facebook’s IPO, Elliott wrote “Facebook still hasn’t stumbled upon a model that’s proven consistently successful for marketers, or that brings in the massive revenues to match the site’s massive user base.

Hmm, catch the use of the words “stumbled upon?” Probably nothing but thought it was worth mentioning.

Regardless, they are some very telling words coming from Elliott and speak to the issue that I think is prevalent which is Facebook seems to put more emphasis on its members than it does on those who allow for the site to even exist in the first place – the advertisers.

Elliott seems to agree with my take writing “Facebook just doesn’t pay nearly as much attention to marketing as it does to user experience. If Facebook did pay much attention to the marketers who handed it billions of dollars last year, and who make the site’s very existence possible, maybe we’d see innovative new marketing solutions every six months rather than every few years.”

I’m not saying, and I don’t think Elliott is either, that there needs to be a higher value placed on satisfying marketers and advertisers than on consumers, but rather there should be an equal amount of time and effort devoted to each.

One last thing from Elliott, which he labeled as being “shocking” – and I would certainly agree with him, is that one global consumer goods company told Forrester recently that “Facebook was getting worse, rather than better, at helping marketers succeed. And companies in industries from consumer electronics to financial services tell us they’re no longer sure Facebook is the best place to dedicate their social marketing budget.”

So Is Facebook Doomed?

Of course not.

GM’s decision is sending shock waves for sure through the halls of big brands and smaller ones, too. I’m sure many are openly questioning their own Facebook ad buying strategies. So it will be interesting to see the fallout from all of this.

There is also the possibility that GM’s poor Facebook ad experience is self-inflicted.

In the original Wall Street Journal article, where the news of GM’s decision first appeared, there was mention made of a meeting held earlier this year in which reps from Facebook actually criticized GM’s approach of having multiple firms managing its advertising for the site.

Too many cooks in the Facebook kitchen?

Somehow I think that plays a role in all of this but, be that as it may – and I think it’s a small role, Facebook still needs to do a better job at helping the folks who keep them in business.

They need to provide better tools to the marketers and advertisers.

They need to keep them happy.

Sources: Wall Street Journal, Forrester

Named one of the Top 100 Influencers In Social Media (#41) by Social Technology Review, I am a freelance writer/blogger currently looking for full-time work. I have worked on some of the biggest brands in the world and have over 20 years experience in advertising and marketing. I live in Philly and can be reached via email,TwitterLinkedIn or my website.


1 comment:

Nick Stamoulis said...

One of the big issues for Facebook ads right now is that there is no mobile platform for it yet. Many people are accessing Facebook on a mobile device and aren't seeing the ads that appear on the desktop version.