Last week, General Motors pulled all of its $10 ad budget from Facebook citing the ‘ineffectiveness of paid ads.’ But some analysts, and rival car-maker Ford, have been quick to jump to the social network’s defence, implying that GM wasn’t getting the most it could from the platform.
The shock decision from GM came ahead of Facebook’s historic $104bn IPO, and has caused jitters in the marketing community that other big brands could follow suit. But this is apparently not the case if bigger rival Ford is anything to go by.
Ford was quick to respond to GM’s move, saying that it remains committed to Facebook.
“It’s all about the execution. Our Facebook ads are effective when strategically combined with engaging content & innovation,” Ford tweeted.
GM later posted on its Facebook page saying:
“Just wanted to let our millions of Facebook fans know, we’re still here, and we ‘like’ you back! We may not be advertising on Facebook at the moment but we’ll still be talking with you all daily. If anything, we will be providing more content across our many GM Facebook pages — including Chevrolet, Buick, GMC and Cadillac — to keep the dialogue going.”
To put things into perspective, GM has more than 378,000 fans on its main Facebook page and Ford has more than 1.5 million.
Speaking to the Economist, Scott Monty, head of social media at Ford, said that Facebook should not be judged as a “straight media buy”.
“In our experience, if you combine engaging experiences with unique story-telling and paid content, Facebook becomes very effective,” explains Monty.
Ford used Facebook as the core part of its campaign to promote the firm’s Explorer sport-utility vehicle a year ago, which “had a bigger impact than if we had run a Super Bowl ad” Monty told the Economist.
The campaign generated close to 400m individual page views on Facebook, Ford’s website and other digital properties.
GM, the world’s second biggest automaker behind Ford, started having doubts earlier this year and met with Facebook managers, leaving the meetings “unconvinced advertising on the web site made sense.”
GM reportedly spends about $10 million advertising on Facebook and another $30 million on its Facebook promotional content and managing its Facebook pages. This $30 budget covers the creation of content and the advertising and media agencies involved, the newspaper said.
GM, which ranks behind Procter & Gamble Co and AT&T Inc in advertising spending, spent $1.1 billion on U.S. ads last year. It spent about $271 million on online display and search ads excluding Facebook advertising. Facebook made $3.7bn in revenue for 2011.
It seems Ford couldn’t resist a dig at GM’s marketing efforts. One root issue this story does highlight is the eyewatering costs big agencies charge for marketing.