General Motors Bails Out of Facebook, Ford Stays

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As if predicting how badly Facebook’s IPO would go, General Motors pulled out all its ads (an investment estimated to be around $10 million) from the social network due to lacklustre results—a sentiment they are not alone in voicing. In a report on the Wall Street Journal, company representatives pointed out that paid ads on the platform created little of the impact on consumers they desired. According to an official statement, GM is attributing its pulling out of Facebook to its regular review of media spend, saying that it’s not unusual for drastic moves like this to be taken.

Fellow automaker Ford on the other hand, is sticking with Facebook marketing and is even ramping up its number of paid ads on the site. Ford cited the success of the launch of its new Explorer on Facebook and offered insight into how best to use the platform. For Ford, the key to succeeding with Facebook advertising is to approach it a different way than how marketers typically approach television spots. It’s something Ford execs believe GM failed to grasp.

Ford looked at Facebook advertising from a long-term perspective, choosing to build a brand over time. For instance, one of Ford’s marketing angles on Facebook is to tap into a younger audience—a generation that has gravitated away from conventional ads—and getting them to like their brand, helping them make a purchase decision once they get older. Ford also cited the benefit of targeted ads on Facebook, which uses resources more efficiently by targeting ads on an audience that actually wants to see them.

While General Motors pointed out Facebook’s unimpressive click-through-rate (ad clicks against impressions) of just 0.05 per cent, Ford argues that looking at click-through-rates is the wrong way to measure the chances of success on the site. The automaker set one of its successful promotions on Facebook as an example; the promo had users customising their own Ford Mustang and voting on which design is the best. The fun activity for users translated to millions of likes and engagements for Ford.

GM pulling out on Facebook before its IPO seems to have jinxed the company’s desired results after going public. In any case, GM still believes in the value of Facebook as a marketing platform, despite pulling out its paid ads. For General Motors, content on Facebook is still important and effective—the word “content” refers to Facebook’s pages for brands.

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