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The Real Reason GM Left Facebook

So GM is pulling its $10 million Facebook ad budget and we all are now left to ponder who will be next, right?

In their official statement GM marketing chief Joel Ewanick said “We regularly review our overall media spend and make adjustments as needed. This happens as a regular course of business and it’s not unusual for us to move our spending around various media outlets – especially with the growth of multiplefacebook social and digital media outlets. In terms of Facebook specifically, while we currently do not plan to continue with advertising, we remain committed to an aggressive content strategy through all of our products and brands, as it continues to be a very effective tool for engaging with our customers.”

Blah, blah and blah.

GM is pulling their money from Facebook just as they would pull an account from an ad agency. There is no difference.

See, somewhere along the way to IPO nirvana the folks at Facebook forgot the one cardinal rule in advertising – always keep the client happy and do whatever you can to please them.

Anyone who has been in advertising for longer than 30 seconds knows this is the way of life. Like or not, and a lot of times we don’t like it, that is the way it is. How many times of those of in the ad agency world have griped and complained about a given client’s decision to change this or alter that only to realize at the end of the day, the client is paying the bills – literally?

Fearless Forrester Forecaster

In what maybe a bit of a Nostradamus-esque bit of foresight Forrester analyst Nate Elliott wrote last November that he hasn’t “spoken to many companies that are thrilled with their Facebook programs.”

And just this past Monday, on the eve of the announcement from GM and on the quasi-eve if you will of Facebook’s IPO, Elliott wrote “Facebook still hasn’t stumbled upon a model that’s proven consistently successful for marketers, or that brings in the massive revenues to match the site’s massive user base.

Hmm, catch the use of the words “stumbled upon?” Probably nothing but thought it was worth mentioning.

Regardless, they are some very telling words coming from Elliott and speak to the issue that I think is prevalent which is Facebook seems to put more emphasis on its members than it does on those who allow for the site to even exist in the first place – the advertisers.

Elliott seems to agree with my take writing “Facebook just doesn’t pay nearly as much attention to marketing as it does to user experience.  If Facebook did pay much attention to the marketers who handed it billions of dollars last year, and who make the site’s very existence possible, maybe we’d see innovative new marketing solutions every six months rather than every few years.”

I’m not saying, and I don’t think Elliott is either, that there needs to be a higher value placed on satisfying marketers and advertisers than on consumers, but rather there should be an equal amount of time and effort devoted to each.

One last thing from Elliott, which he labeled as being “shocking” – and I would certainly agree with him, is that one global consumer goods company told Forrester recently that “Facebook was getting worse, rather than better, at helping marketers succeed. And companies in industries from consumer electronics to financial services tell us they’re no longer sure Facebook is the best place to dedicate their social marketing budget.”

So Is Facebook Doomed?

Of course not.

GM’s decision is sending shock waves for sure through the halls of big brands and smaller ones, too. I’m sure many are openly questioning their own Facebook ad buying strategies. So it will be interesting to see the fallout from all of this.

There is also the possibility that GM’s poor Facebook ad experience is self-inflicted.

In the original Wall Street Journal article, where the news of GM’s decision first appeared, there was mention made of a meeting held earlier this year in which reps from Facebook actually criticized GM’s approach of having multiple firms managing its advertising for the site.

Too many cooks in the Facebook kitchen?

Somehow I think that plays a role in all of this but, be that as it may – and I think it’s a small role, Facebook still needs to do a better job at helping the folks who keep them in business.

They need to provide better tools to the marketers and advertisers.

They need to keep them happy.

Sources: Wall Street Journal, Forrester

Named one of the Top 100 Influencers In Social Media (#41) by Social Technology Review, Steve Olenski is a freelance writer/blogger currently looking for full-time work. He has worked on some of the biggest brands in the world and has over 20 years experience in advertising and marketing. He lives in Philly and can be reached via email,TwitterLinkedIn or his website.

Join The Conversation

  • Ascendify Social Recruiting's picture
    May 27 Posted 5 years ago Ascendify Socia...

    Great article!  As a former ad agency exec, I can fully appreciate the phrase "client is always right".  Just give them what they're asking for.  They're the ones paying to keep the lights on.

    As for marketing on Facebook... Consumers are savvy- they know when they're being sold to, and they don't want ads interfering with their social activities. GM would be more successful with a subtle approach.  Develop an active community that will oganically attract customers and potential employees because they're natutally drawn to what you have to say. Engage with your audience in two-way converstaions, share relevant news, and encourage particiaption.  Don't just blast them with ads they can't respond to.  

    Thanks for sharing,

    Lauren Smith

    Marketing Director




  • Filip Galetic's picture
    May 25 Posted 5 years ago Filip Galetic

    All I see is this line or "reasoning":


    - Facebook = Holy cow

    - GM pulls ads from FB bc they found it ineffective? How dare they! It must be that they suck!

    - Facebook ads = making clients happy. Really? Stopped to think that maybe they weren't making any of GM's customers happy so that's why they pulled them?



    I understand we have all hinged our livelihoods to the well-being of social media, but poor reasoning and "ad hominem" type of arguments to defend something that may not be that dazzling about it really serves no one.


  • May 25 Posted 5 years ago erichfriedman

    C'Mon, can you be even more self-centered 'those who even allow for the site to exist in the first place...'  Really? So the rounds and rounds of angel investors taking a risk, the pool or ocean of users feeding that IPO, they really didn't count for something allowing the site to exist in the FIRST place..? As we all know, advertisers and marketers are hangers-on. Tag alongs that hate to be called out for exactly what they are, fakes. Let's go search for something new that's popular. Now let's try and coopt it. Now... etc etc


  • CarolSmithCEO's picture
    May 24 Posted 5 years ago CarolSmithCEO

    Interesting take on the GM Facebook relationship. I don't use Facebook to market because easy to use and relavitely inexpensive they don't give me the ability to target my desired client. 

    I was stunned and beyond dismayed to learn that the day before Facebook's pending IPO GM chose to announce their marketing investment shift. Was that an effort to protect themselves from the decades of Facebook IPO lawsuits or just plain mean spirited business? 

  • allysonrobison's picture
    May 24 Posted 5 years ago allysonrobison

    I have to agree with both Steve and Andreas. Facebook's marketing tools need some definite improvement. That being said, GM is behind the ball in taking advantage of the good tools Facebook offers. So, I think it's a bit of both.

    However, I'm completely stunned that Alex believes Facebook is "devoted to Millenials." Clearly you don't realize that one of the largest segment of Facebook users is the"soccer mom" (those women aged 30-50 with children, whether stay-at-home or working). And women are responsible for the majority of purchasing decisions in the U.S. So, even though vehicles are traditionally a male-dominated field, I think GM could definitely benefit from using social to boost brand awareness and, as a result, sales.

  • patmrhoads's picture
    May 24 Posted 5 years ago patmrhoads

    Here's something that I haven't seen addressed as of yet: Sure, Facebook may not be helping marketers out as much as those marketers would like. But, what if they did, at the cost of that massive user base? Think about it. If Facebook became even more overrun with ads, and if the ads increased in savvy to the point of hurting user experience, the user base might very well rebel. They MIGHT even finally migrate to Google+ (not saying that would happen, but...). Then Facebook loses either way. Seems to me that by keeping the user base happy, they actually have something of value to SELL to the marketers. And marketers need to realize that they have to do their jobs well to engage people, not just slap up the typical old-school banner ad and hope to rake in millions. This is not web 1.0 anymore, folks. You can't spend $10 million on the same-old same-old and expect big results. 

    I feel that while Facebook does need to make sure marketers have the tools they need to advertise well, they also need to protect their users' experience on the site, or they'll lose the very product they have to offer marketers in the first place. As long as that massive user base is there, Facebook has a product it can monetize. The lesser of two evils - upsetting the users or the marketers - is to keep the users happy. As long as that's where they are, and marketers can make at least SOME money there, then the current situation is still the best option.

  • May 24 Posted 5 years ago kgal1298

    1. there are only so many ways to advertise on FB

    2. If FB did anything out of the ordinary it would upset it's consumers to the point they would leave. 

    3. FB needs to keep the users happy

    4. Advertising works on there if you know what your doing

    5. GM just needs better advertisers

    So in conclusion GM just needs to work on their ads. Besides didn't you see in the car industry their market share is down performing even behind Ford right now and other foresign manufacturers. And honestly if they made better products then they would have the consumers anyway. Just saying the core of a business should be it's product and it's customer service when either of those are bad your social media efforts will fail. 

  • RonHeimbecher's picture
    May 22 Posted 5 years ago RonHeimbecher

    It could be that GM was sending a message on the eve of the IPO circus to say....
    "We are a company that actually produces something. Something that people actually need. And we need to focus our energy on people who are ready to buy, not just talk about it."

    Just sayin'


  • May 20 Posted 5 years ago JackLudwing

    It is quite possible that their Ad campaign didn't work and they just wanted to pull out, i don't see why that would be a problem. Being that said i think that there's something about the statement and more importantly the timing of it which smells like decomposed Denny's chicken wings. I came across a very insightful article which i liked a lot, it talks about GM, the digital age and Facebook. If you care to take a look go to http://bit.ly/J7csTC

  • May 19 Posted 5 years ago Andreas Duess

    Alternatively, and this is what I believe, GM is simply not very good at Social. The easiest way out of that situation might well be to blame the tools, rather than the craftman. 

    From what I've been observing, GM has been using Facebook, and especially their brand pages, as little more than a glorified megaphone. 

  • May 18 Posted 5 years ago AlexLandry

    I have to wonder-is a website devoted to Millenials- a group that faces some of the highest student loan debt, a tough employment market- a group that is known for being fickle and not easy to sell to anyway- the best place to try to sell a high price item, like a car?

    Not to mention all the underage users of facebook-who lie about their birthday to be able to open a facebook account. Want to sell a skateboard? A cool iPhone cover? A laptop? Downloads of an up and coming indie band? Sure, facebook makes sense. But to try and sell cars-seriously big ticket items for twenty and thirty somethings, not to mention GM cars(not necessarily high on my daughter's list of "cool" vehicles)makes me scratch my head.


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