Yesterday, word broke that General Motors ended $10 million in Facebook ad spending after determining the ads didn't work for it. The timing of the original WSJ story on the subject was spectacular, coming as it did just three days before Facebook's IPO.
Now folks sympathetic to Facebook are firing back at the automaker, saying GM ran a lousy Facebook campaign and ignored the social network's advice. Which is not terribly surprising when you think about it, since the GM story has ignited a wider debate about the utility of corporate ad spending on Facebook at about the worst moment possible so far as the company and its backers are concerned. Not that it seems to be hurting demand for the IPO very much.
With all that in mind, here's the case one individual familiar with the situation made to me. This person, predictably enough, insisted on anonymity due to the sensitivity of the situation. Similarly, this person has a definite point of view on this particular topic, as you'll see in a moment.
"Facebook advised [GM] to invest more wisely in a campaign that would reach more people," this person said. Instead, though, GM put most of its money into the development of promotional apps and its corporate "page presence" on Facebook, and "didn't see a response" as a result. "No one will know that stuff is there unless you use paid media to promote it," the individual said.
GM spent about $40 million on Facebook, roughly $10 million of which consisted of paid advertising, the company has confirmed. (The individual noted above said this spending took place over the space of about 16 months, for what that's worth.) The remainder of the automaker's spending went into the development and maintenance of promotional Facebook pages, apps and other marketing activities that cost a lot to produce, but which don't result in direct payments to Facebook.
This individual laid out the following bill of particulars against GM and its social-media agency Big Fuel, which GM fired last December. Bear in mind that this sort of anonymous critique isn't all that uncommon when advertisers, agencies and media outlets squabble over why a particular campaign failed:
- GM's pages were badly designed: GM's Chevrolet brand, for instance, developed an app to highlight its eco-friendly features (presumably featuring its plug-in hybrid car, the Chevrolet Volt). But to find the app, users had to go to a page dominated by a promotional video, where links to the app were buried "below the fold" (i.e., a screen or more down the page). Also, GM had no paid ads promoting the app.
- GM's apps were cruddy: That Chevy app didn't "engage" users by giving them reasons to keep coming back. Instead, it was "designed for one-time use," which is the sort of thing that Facebook advises against.
- GM's apps weren't intrusive enough: That Chevy app, for instance, apparently didn't notify the friends of Chevy fans who played with it that, well, they were playing with a Chevy app.
Bottom line, according to this person: "It seems they spent a lot of time optimizing for their pages rather than influencing the friends of fans. It's really all about reaching the friends of fans." Oh, and this individual argued that many other automakers have seen "great success" on Facebook, specifically naming Kia, Mazda, Hyundai and Ford.
Like I said, a lot of this is par for the course when high-profile media campaigns flop. (Even if they're only high-profile because of the timing.) I've contacted GM and Big Fuel to see if either has any further comment on the situation, and will update if they do.
Meanwhile, here's yet another GM-disparaging quote from a Big Fuel representative courtesy of All Things D's Peter Kafka:
GM never seemed persuaded of the value of social media in general and Facebook likes in particular. In a sales-driven culture, it is very hard to wrap your head around putting money in places where you don't see immediate results in an uptick in sales.