GM to Facebook: We're done here.
According to this article in the Wall Street Journal, General Motors is yanking its advertising from Facebook.
GM spends about 40 million dollars on Facebook. 10 million of it goes straight to Facebook. So that's a chunk Facebook is about to lose.
GM has realized spending all that cash on Facebook is not translating into more asses sitting on their car seats.
Facebook could not be reached for comment. Which isn't a surprise. Because The Great Facebook Cotillion Dace With Wall Street happens this week. They're in no mood to think about lost cash when their IPO will be around 100 billion, give or take a few shares. (Shares. Geddit? it's a Facebook joke. And a Wall Street joke. Never mind.)
GM said it will keep its Facebook pages, because they don't cost anything to maintain. It also pays no fees to Facebook for these pages.
So let's recap: GM realized they're paying a lot for something that in their case is largely ineffective. No one is buying a Buick because of an ad they saw on Facebook.
GM also realized they can put out content on Facebook for the grand old price of free. And this strategy supposedly works for 'brand building,' or 'story telling,' or whatever buzzword du jour that snot nosed 23year old social media Ninja Guru is hawking, so why not keep doing it, but save some dough in the process.
In case people haven't realized it, (and most people outside of advertising or marketing haven't) Facebook uses its social media friendship hangout fun time place as a ruse for what is an ever-growing advertising platform. Only now it will have a tasty stock listing and a bunch of greedy shareholders to egg them on. I'm sennsing raising ad rates in the near future.
But if the U.S.'s #3 Advertiser says 'we're done here,' at least for the paid portion, what does that say about the social media juggernaut's mission/business model? Even if GM's budget is a drop in the bucket, it's still a big enough drop to make Facebook take notice.
There are, of course, other explanations to consider.
As the younger demographic increasingly becomes the advertising Holy Grail, companies feel an ever increasing need to "reach them." And some do it well. Clearly there have been successful campaigns on social media, if we declare success as being PR and the ever nebulous word "buzz," with 'sales of actual stuff,' coming in a distant third.
GM might have been a bit clueless in this regard. Considering its most innovative (and social media worthy car, IMO) the Volt, had suspended production a few months ago, perhaps it doesn't have a vehicle in its line with that certain Je ne sais quoi. That's French for "something to make 24-year-olds tweak their nipples."
Maybe they don't have a social media person who knows what they're doing. It could also be a case of taking the ball and going home too soon. Did they give it enough of a chance?
And at its harshest reality, it could be nothing more than a cost-cutting measure in an ever-souring economy, by a company that needed a bail out by Uncle Sam.
Now it's up to GM to see if it can exploit (er, take advantage of) Facebook's freebie platforms in order to achieve the same social media goals. It'll be interesting to see if it becomes a success. Because if so, other advertisers will surely take note.
At this point I'm more interested to see if it has any effect on Facebook's Wall Street debut this week.
Guess we'll find out soon enough. Maybe one of our friends will post the news. On Facebook. And then share it, thus creating a nice meta moment.
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