Perhaps GM's ad unit needs more of a social life.
It's hard to believe there wasn't some sort of agenda in telling the Wall Street Journal, three days in advance of what's slated to be the biggest IPO in U.S. history, that advertising on Facebook isn't working for GM, but that's what the automaker did. If the company was looking for attention, it certainly got it -- the media was scrambling for new angles on the week's biggest story.
Sure, it's a big deal when one of the world's largest advertisers pulls back $10 million in spend (or makes such a public proclamation). Perspective is also warranted in this situation.
Facebook's success as an advertising medium, or a public company for that matter, is far from guaranteed. Blazes of glory in this industry are often nasty, brutish, and short (AOL, Yahoo, Myspace). But here are seven reasons to temper GM's very public proclamation against Facebook's advertising:
Facebook advertising isn't even 1.0 -- it's still beta
Facebook is developing new advertising products, refining them, killing others, and tweaking some more. The company's IPO is a $100 billion bet that eventually it's going to get the model right, just as the search ad model was (and remains) very much in evolution when Google went public. For many advertisers, advances can't come fast enough, but the old term "new media" is very much in play in this contest.
Paid media can't succeed without earned and owned integration
Shortly after the GM story broke, rival Ford tweeted: "It's all about the execution. Our Facebook ads are effective when strategically combined with engaging content & innovation." Sounds simple, but integrating paid, owned, and earned media into a viable, sustainable strategy in which each informs the other is hard. It requires silo-busting, new metrics, and an entirely new approach to media. Yet it's a task marketers and advertisers must master -- first in social media channels like Facebook, then across the rest of digital as well as traditional media.
Advertisers are only now testing the waters
"We believe that most advertisers are still learning and experimenting with the best ways to leverage Facebook to create more social and valuable ads," Facebook says in its IPO filing. Best practices for advertising on social networks, or integrating that advertising with owned and earned media? Barely even embryonic. Like Facebook's evolving ad platform, how to effectively advertise in social channels is still in the earliest stages of evolution.
Facebook advertising is not about direct response
Those ads on Facebook about tooth whitening and belly fat? Going, going, gone says the company. Yet GM's complaint was that its Facebook ads weren't moving enough car sales, a pretty disingenuous argument. GM is certainly sophisticated enough to know that advertising has many purposes other than direct sales: branding, consideration, and purchase intent, for starters. It's very hard to believe the company expected to sell X number of vehicles per Y number of Facebook ads.
Display is down across the board
Why integrate paid, owned, and earned media? Because fewer and fewer consumers engage with display advertising. It would be a lot simpler if that weren't the case. Advertisers could plop creative into ad units and meet goals. But banner blindness and declining click-through rates call for more creative and integrated solutions -- again, particularly in social environments.
Even GM cedes to Facebook on this account. "We remain committed to an aggressive content strategy," is one of several quotes GM made in the wake of its "no-advertising" bombshell.
Facebook is biggest media company in history
Ever. Of all time. Why doesn't anyone ever state the obvious? No print or broadcast medium has ever even remotely approached a user base of 1 billion. That old adage about advertising going where the eyeballs are? There are more eyeballs in the world focused on Facebook than anything else manmade. That's a pretty compelling argument to get this advertising thing right -- both internally at Facebook, as well as for advertisers and marketers.
Rebecca Lieb is an analyst, digital advertising/media, for Altimeter Group.
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"Young businessman in thinking" image via Shutterstock.