Facebook may be big news this week with its billion-dollar IPO, but not everyone is liking the social media giant. GM is reportedly nixing its Facebook ad buys because it doesn’t think they are effective. According to the Wall Street Journal (via Mashable), GM spends $40 million annually on Facebook. Of that, about $10 million goes to ads each year with the rest going to developing content for and running the brand pages. To put this in perspective, GM spends about $1.8 billion each year on all its marketing initiatives.
Apparently the issue for GM and other major advertisers is that Facebook is not good at linking paid ads to a marketer’s success. Mobile may be the key to all this. As more and more people surf social media on their iPhones and Droids, they are less likely to run into those pesky ads.
In the scheme of things, $10 million is chump change to both FB and GM… but it could be a worrisome sign of things to come for Facebook’s primary revenue-generator. Meantime, I have another question: Does it REALLY take $30 million to produce content for FB pages? Granted, GM has a lot of brands, but geez…
Strategically Communicating 
While my budget is not anywhere near GM’s I am starting to re-evaluate the role Facebook plays in the brand I manage. While Facebook is an excellent tool I am not sure how much trust a brand should put into it. Ever since we switched the city to the new timeline we lost most of our administrator rights. There one day, poof gone the next with no help from Facebook (even though we submit error reports everyday). If you read the message boards we weren’t the only brand impacted in this way. During one of my fits of pique, my web content manager said, “well that’s what we get for relying on a free tool.” I recently heard a news story about how launches incomplete. Meaning Facebook is making changes that aren’t fully tested that could impact the functionality of pages. If it was my personal page that’s fine but mess with my brand’s page and I may have to kick you to the curb. How much should we invest in these seemingly free tools knowing that one day it could be gone, broke or the audience moves on to the next big thing? Perhaps Facebook could implement paid tech support to offset lost ad revenue from companies like GM. I guarantee I would be first in line to fix my page. If Facebook “ships” with known bugs think how much they could make off of helpless brand managers like me.
By: lmbshepard on May 21, 2012
at 6:34 am