News Column

GM Mulls Re-friending Facebook

July 5, 2012

Nathan Bomey

General Motors is reconsidering its "likes."

A GM spokesman confirmed that the automaker is discussing buying advertising on Facebook again after halting the paid ads in May in a public blow to the social network days before it went public. The automaker maintained its free brand pages on the site but said its $10-million Facebook ad budget wasn't delivering an adequate financial return.

Facebook executives have offered to provide data showing the effectiveness of GM's advertising on the site in a bid to convince the automaker to come back, the Wall Street Journal reported. GM had publicly questioned the value of Facebook ads when it halted the practice in May.

Chevrolet Vice President of Global Marketing Chris Perry told the Free Press last month that GM had asked Facebook for creative flexibility on the social network's advertising platform.

"We offered up some ideas; we said bring us your ideas," Perry said. "We said, 'We'll be your guinea pig. We have the dollars to invest in this program.' "

But GM still ultimately decided to drop the advertising.

Other automakers -- like Ford, which trumpeted its faith in Facebook ads after GM's exodus -- continued to advertise on the site.

GM has maintained an active presence on Facebook with dedicated pages for all of its brands and promotions like Chevrolet's "Stay Clutch," a Facebook contest offering millennials a chance to win stick-shift driving lessons at Major League Baseball's All-Star Game.

Facebook doesn't charge for brand pages, but automakers invest heavily in developing content for those pages.

"It's been misreported quite often (as) saying General Motors is getting out of Facebook," Perry said last month. "It's not the case at all."

GM, which spends about 25% to 30% of its advertising budget on social, digital and Web marketing, has about 8 million "likes" on its Facebook pages.

"We certainly don't want to walk away from 900 million consumers, and we haven't walked away," Perry said. "We're a big proponent of Facebook."

Still, industry experts say Facebook needs to improve the effectiveness of its advertising. About 16.6% of the site's users have either clicked on a Facebook ad or showed an interest in purchasing a product, according to research firm Kantar Media Compete. That was less than the percentage for search engines like Google and Yahoo.

Facebook has also acknowledged that it needs to improve the mobile version of its site, which is growing fast but generates little revenue.

A Facebook spokeswoman declined to comment.

GM CEO Dan Akerson has cited Global Chief Marketing Officer Joel Ewanick's efforts to cut inefficient ad spending as an example of how the company needs to streamline its operations. The company also recently pulled out of advertising for the 2013 Super Bowl.

Akerson told reporters before GM's annual meeting last month that the automaker would save $400 million a year in advertising from the heightened focus on efficiency, which has included consolidation of GM's advertising agency client base.

He said GM is focused on "impressions in the marketplace," marketing jargon for the number of consumers who see an advertisement.

Source: (c) 2012 Detroit Free Press

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