UPDATE, 6/1/12: According to Facebook, GM pulled their Facebook ads because they were unable to run a full page takeover. After asking Facebook for permission to run "bigger, higher-impact" ads, Facebook denied their request.
While those who can invest in Facebook are still debating whether or not Facebook has a bright future in advertising, one major issue surrounding the social giant is whether or not their advertising platform is effective. General Motors (GM) made news when they publicly criticized the effectiveness of Facebook Ads. But who's really to blame for the disappointing results from GM's campaign?
GM pulls $10M Facebook Ads Campaign
Just three days before Facebook's IPO, GM announced that they had pulled their $10 million Facebook advertising campaign, as it was "ineffective." Although this action by a large corporation such as GM brought many Facebook critics, it encouraged me to play "Devil's Advocate." Social media marketers all over the world have documented their successes from using Facebook ads with much less than $10 million. So how come others have seen great success from the platform, but GM hasn't?
The answer is because Facebook ads are ineffective as a result of a poor social media strategy. Unfortunately for GM, Facebook wasn't to blame; their poor social media strategy is where the blame should be placed.
Where GM went wrong with Facebook ads
There are many factors in a poor social media campaign that can lead to ineffective results. GM most likely made these mistakes:
Unrealistic goals
We don't know exactly what goals GM had for their Facebook ad campaign, but to suggest that Facebook ads didn't work as expected, we can assume that GM wasn't meeting their goals. In fact, GM's entire strategy seemed to involve a misunderstanding of goals. Not just GM's vague social media campaign goals, but a thorough lack of understanding in the purpose of Facebook Ads. This begs the question: Was GM's campaign goals too unrealistic?
Surely GM's goal wasn't to increase overall sales of their automobiles with the utility of Facebook ads. That goal is as vague as saying you're going to take over the world. Furthermore, Facebook ads are meant to increase awareness, engagement, interaction and customer satisfaction of your brand. GM needed to create a campaign that focused on creating an active, engaging community. A recent study by Forrester states that consumers are twice as likely to buy a product from a brand they "like" on Facebook. That statement is true only if that fan page can create worthy content in an effort to keep interaction high.
That leads me to my next point...
Poor, non-engaging content
Granted, I am likely younger than GM's demographic and certainly not in any hurry to purchase a car. But that has nothing to do with the consumer buying a car in general. Buying a car has more or less to do with need, rather than want. Buying a car isn't an impulse decision. Buying a car is a long-term process with many thought-out factors. As such, you need to develop long-term marketing plans so that when someone is ready to buy a car, GM has done enough to stamp their place at the top of consumers' minds.
I've yet to see any GM ads on Facebook, and that's a good thing. With strategic demographic optimization, I shouldn't be seeing those ads. But on another note, is GM creating worthy content? And if they are, are they pushing that content in the faces of people that would be interested in seeing it? An analysis of GM's Facebook page and their competitor Ford's Facebook page tells us that GM haven't done enough to optimize engagement on their fan page.
Notice the tabs focused on engagement that Ford has in the image below. Then take a look at GM's Facebook page. GM's fan page doesn't give any user a reason to "like" it or stay a fan (if they do "like" it). Furthermore, by clicking on some of Ford's custom tabs, you'll find that design and layout are representative of great interaction.
Takeaway point: If you aren't engaging your fans with worthy content, you haven't done enough to make them remember your brand when it's time to make that purchase of need. GM needed to continue using Facebook ads to grow their community (and more people they can market to). A simple Facebook ad about your brand without any reward behind it isn't going to get you fans.
Measured the wrong results
As I previously stated, we don't know what the goals were for GM's Facebook ads campaign. Since that information wasn't available to us, we can't know what was measured. But with a $10 million campaign solely for Facebook advertising, an "ineffective" campaign suggests that GM measured the wrong results.
Measuring the wrong results on Facebook is a product of creating the wrong goals. If GM didn't see fan page growth tremendously with that much of a budget, then yes, their Facebook ad campaign failed. But if the auto giant measured click-through rate (CTR) and noticed that it was low, that's probably just an indicator of every brand in the auto industry on Facebook (considering you've optimized ad copy as much as possible). Furthermore, if GM didn't see an increase in overall sales, it's not because the ads didn't work.
Assuming GM had properly setup the targeting section of their campaign, the goal of steadily growing a community of GM fans should've taken priority. Therefore, to measure that, you would only need to look at how many daily likes you're getting as well as other fan engagement factors (such as how many people are talking about this).
What exactly was GM measuring in their Facebook ad campaign? Were campaign goals explained and fully understood by those who executed the ads?
In conclusion, these three factors could've been the reason why GM failed at Facebook ads. If they don't fully understand the benefits of growing and engaging a community of GM owners and potential buyers on Facebook, then it was a smart move to pull their ads. How could you invest in something you don't understand? A proper reassessment of campaign goals and how Facebook ads work will hopefully lead GM to discover just how effective Facebook ads are for businesses. Not to say Facebook ads work for every business in the entire world, but GM is a corporation that should've found success from it.
What do you think of Facebook ads? Let us know in the comments below!