Why GM Dropped Facebook Advertising

Peter Roesler, President - Web Marketing Pros

By Peter Roesler

President, Web Marketing Pros

Since the 1950s, there has been a popular misquote: “What’s good for General Motors is good for the country.” This was a popular feeling, as the giant automobile manufacturer, a blue chip stock at the time, was recommended for widows and orphans to hold because it was considered so sound and safe.

GM today isn’t quite so revered, but it’s still an industrial and financial powerhouse. And, GM (GM) flexed its considerable public muscles recently by announcing it would no longer be advertising on Facebook, and not buy any national advertising during the 2013 Super Bowl telecast.

All of this happened just before Facebook (FB) became a pubic company – and promptly fell to the whims of the stock market, losing considerable value in the few first days of trading.

Ah, it has been discovered, Facebook is run by humans, warts and all.

The siren song of Facebook has been its 900 million users and their stats which go along with them, often including age, gender, name, sometimes an address, and what can be harvested from what they eat, what they like, etc.

At first advertisers thought if they were somebody, they were on Facebook. Certainly, the vast reservoir of names and data would be a gold mine; the price of admission, paying for advertising on Facebook would produce a bonanza of results.

Well, not so much.

Web Marketing Pros owner Peter Roesler said, “I agree with GM’s decision, and have tested Facebook pay per click with several different markets, and the conversions to cost are horrible. Sometimes, none at all. The biggest problem with Facebook advertising is if you leave the Facebook page to click to another site, people freak out and close the browser like it’s spam. The only way to have a successful Facebook campaign is using your Facebook page, but with the new timeline, the landing pages can’t be made good enough to work properly. Therefore, I think advertising dollars are best spent elsewhere on either Google Adwords or Bing/Yahoo Adcenter.

So, the dropping stock price is not the only problem Facebook is having right now.

While Facebook may be “the new, best thing” in the eyes of many, too many advertising fundamentals have been overlooked regarding Facebook.

First, forget about the 900 million Facebook users around the world. That is an aggregate number, and includes all of the people who created a Facebook page and haven’t been back to look at it in months or years. Then, there is the next level, who visit Facebook occasionally just to see what is on their newsfeed and wall, then immediately leave.

Once you pare away all of the casual users, one-time visitors, and get down to the core of it all, there just may not be that many desirable Facebook users in any particular country – remember, Facebook is global. If you’re selling tractors in Alabama, do you really care about Facebook users in Finland?

The bottom line is, Facebook is the advertising darling of the moment, and not the global solution to those who wish to have a serious advertising campaign with a set of projected results. Facebook will be around for a long time, but, now that the IPO is out of the way and the bloom is off the rose, it will become just another vehicle for a targeted audience, not a flood of eager buyers waiting to buy anything offered on Facebook.

Share This Article