A move by General Motors to reconsider its decision to pull Facebook advertising may have more to do with contests and giveaways than it has to do with a sudden rethinking of the automaker's social media strategy.
Charlotte Reynolds, an online marketing specialist, says recent changes require brands to use apps to run giveaways and collect contest registration. That may be forcing GM to consider a limited amount of paid advertising on Facebook.
“I don't think it's that they re-thought the need for social media,” Reynolds said. “Rather, it's that they are being forced to pay for things that could have been built for free in the past. Instead of simply posting an opt-in link, they must now use an app.”
Reynolds also said Timeline limits a brand’s ability to create a dedicated landing page, which may also be prompting GM to reconsider its Facebook advertising.
Facebook Needs To Prove Its Ads Work
GM pulled its Facebook advertising in May, just ahead of Facebook’s initial public offering. While the $10 million was relatively small, the move was seen as symbolic: Either Facebook advertising didn’t work or old-line companies like GM didn’t “get” that social media was more about building brand loyalty than getting a direct return on an advertising investment.
News that GM was reconsidering Facebook ads has been the lone recent bright spot for the company when it comes to advertising. Two surveys suggest that Facebook ad spending is fading and could drop even more in coming months. Its clickthrough rates are about 0.05%.
GM’s initial decision to pull Facebook advertising “should have signaled an epiphany, an awakening amongst advertisers that are recognizing that online advertising simply doesn't work,” according to Greg Wilfahrt, founder of ProsperPro Consulting. “This is a model that constantly implodes.”
Wilfahrt predicts GM will agree to a limited, short-term ad campaign with Facebook, but - like other brands - will eventually turn its attention to mobile.
“Mobile advertising has already shown that it can deliver response rates in excess of 20%,” he said. “Let's see what GM thinks about that.”