Facebook Loses GM but who is the Loser?

Photo by Vegavairbob at en.wikipedia

I don’t know about you, but I didn’t rush out and buy any shares of Facebook.  I consider just having an account and sharing every now and then, shares enough.  I don’t buy stocks at all as a rule except indirectly through mutual funds in my retirement portfolio.  And I imagine, sooner or later one of my funds will invest in Facebook.  But one big American company is apparently done with Facebook.  GM announced it will not be buying any more ads on Facebook because as far as GM could tell, the ads were not effective in selling cars and trucks.

GM may be onto something.  I know from my own experience, I don’t pay any attention to ads on the internet and was not even aware that GM had a Facebook presence.  And if I had noticed an ad, you best believe I would not have clicked on it.  I don’t go to Facebook, or any social media site for that matter to shop, or to be distracted by annoying ads.  Of course on some sites, to play a video, you have no choice but to listen to a 30 second spot.  And on sites like Spotify, you have to tolerate ads to use the site for free, unless you buy a premium monthly subscription.  If more companies like GM stop buying ads on Facebook, Mark Zuckerberg might have to change his business model and start charging account holders.  If this day ever comes, I’ll stop using Facebook, though I don’t begrudge the company for making money.

Is Facebook or GM to blame for sluggish sales?  GM reportedly spent 10 million on Facebook ads, which is a small percentage of its overall advertising budget.  Did Facebook users not click on the GM banner because they couldn’t be bothered, like me?  Or did they refuse to do so because they don’t have any interest in buying a GM car or truck.  Could it be that GM has a damaged image from the days of the Chevy Nova and the Chevy Vega?  In my opinion, GM has rolled out a consistently bad lineup of cars since the 70’s and hasn’t regained its reputation of the 50’s and 60’s.  And I say this as a past GM consumer who grew up in a family who owned Impalas, Monte Carlos and yes, even a 4 speed Chevy Vega that you had to stand up in to depress the clutch.  I do like the Camaro, and the Corvette, always have and always will.  But could it be that “Ford has a better idea”?  Well, that remains to be seen, but Ford does plan to continue with Facebook unlike GM and even step up its presence in the future. And I won’t notice.

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3 Responses

  1. Considering the majority of the audience are 16 year olds that don’t drive, I would say that is most likely the issue. Now, I’m not promoting anything here, but Budweiser might want to look into advertising on FB.

  2. Smart marketeers know that subliminal advertising works best – especially online. Blatant advertising might be better for newspapers.

    Getting a celebrity (of any kind) to like their new car online (with a few photos) would probably work – and wouldn’t cost that much.

  3. It’s interesting to note that GM is not abandoning FB, only the buying of ad space. They will continue to manage a free FB page (free loading so to speak) and no doubt will employ the very tactic you suggest if they haven’t already.

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