$10 million is a drop in the proverbial bucket of General Motors’ $1.8 billion U.S. advertising budget. But for Facebook, losing that .6 percent of the no. 3 U.S. advertiser’s spend is a painful blow, coming as it does just before its expected public offering.
The Wall Street Journal’s report (sub required) yesterday spun the move as a loss of faith in the effectiveness of Facebook ads. But for GM, there are other factors in play as well – including problems with Facebook ad measurement (versus effectiveness), a willingness to negotiate via the press, and internal marketing credibility.
Facebook Resists Impression Tracking
The problem for GM may have as much to do with measuring Facebook’s effectiveness as with simply believing in it. Facebook does not – as a rule – support third party cookies and post-impression tracking. Hence GM can’t link an online lead on auto research sites, dealer sties, or its own sites to a Facebook campaign.; Facebook allows third-party impression tracking, but only by certified vendors on CPM priced products. It does not allow impression tracking on bidded products. Effectiveness metrics tend to be limited to the Facebook platform – such as “likes,” comments, and “talking about this.”
Importantly, there have been some rumored exceptions to the ad tracking rule – one of them made for General Motors itself. Last year, at least two brands – Sheraton and GM’s own Chevrolet – ran campaigns that appeared to show cookies being dropped, according to AdExchanger sources. The fact that Chevy may have been permitted this perk as a one-off, allowing it to blend Facebook and off-Facebook campaign reporting, could suggest the feature is a priority for GM marketers – one that Facebook is stubbornly reluctant to provide.
“Marketers need some real, honest-to-god marketing metrics on Facebook, not just wall posts,” Forrester analyst Nate Elliott, who was quoted in the Wall Street Journal, commented to AdExchanger.
Marketing Org Politics
GM’s move may also be meant to shore up internal marketing credibility, says Pivotal Research analyst Brian Wieser.
“CMOs and central marketing groups are typically unable to actually do things themselves. Instead, they must convince constituents who contractually agree to different aspects of budgeting to agree to the strategic changes the central marketing group recommends,” Wieser said in a research note to investors.
Chief Marketing Officer Joel Ewanick may stand to gain internally by establishing his credentials as a cost-cutter through a tough stance on Facebook – a stance that may continue into the network upfronts.
“We think it’s highly probable that GM is attempting to assert its ‘credible ability to walk away’ to all media owners,” says Wieser.
John Manoogian III, founder and CTO of 140 Proof, says the pressure on Facebook is par for the course.
“When a brand advertiser moves its media buying responsibilities between agencies, as GM recently moved theirs from Starcom to Carat, it’s totally normal for the brand to reassess what it’s spending and where,” Manoogian said. “The fact that GM hasn’t outright committed to leave Facebook is telling. Auto industry marketers, the titans of ad spending, are famous for holding publishers’ feet to the fire…Media agencies are familiar with having to renew their vows with brands. Sometimes this means strategies change or media prices drop. Facebook and other social platforms are new to the game, but they’re learning fast that relationships matter.”
Taunts and Timing
Dissing a media darling like Facebook on the eve of its debutante ball in the public markets comes with some risk – including looking foolish or out of touch. Social race leader Ford has seized on the moment, proclaiming its own ads effective on the grounds of smart execution.
“With more than 10 million fans globally, Ford is accelerating our efforts in Facebook and other social platforms,” said Scott Monty, head of global digital communications for Ford Motor Company, in a statement to AdExchanger. “We’ve found Facebook ads to be very effective when strategically combined with engagement, great content and innovative ways of storytelling, rather than treating them as a straight media buy.”
GM, too, has lots of Facebook fans, including 1.2 million for Chevy and 2.8 million for the Camaro alone. And as WSJ pointed out, it’s investing heavily in content for the platform – to the tune of $30 million a year. GM is leveraged enough into the Facebook ecosystem that it’s bound to evaluate and test future ad opportunities there.
By withdrawing from the platform now, just before Facebook’s IPO, GM sends a much stronger message to Facebook than it can at any other time. This, and the fact that the automaker or its agencies apparently provided ad spend figures to the WSJ, strongly suggest the disavowal was set up for maximum impact.
As Pivotal’s Wieser puts it, “Marketers start and stop working with media owners all the time. But they don’t normally talk to the press about it unless they have a good reason to do so, not least because they may wish to work with (and extract favorable terms from) those media owners again in the future.”
Many agree GM will come back to Facebook given time.
Victoria Ransom, CEO of Wildfire, says, “If GM is seeking to expand their reach and engagement with their audience, there is no doubt that ads will still be an essential companion to free pages because Facebook is becoming a much ‘noisier’ environment with so many brands vying for consumers’ attention. This trend will only increase, and brands which do not buy ads may need to reconsider in order to fully leverage the other content they have invested in.”
She continues, “It’s natural enough to express skepticism where the technology is new and the performance metrics are uncalibrated, but Facebook ads are a critical part of the social marketing mix… so GM may be back.”
GM’s enticement to return will grow if Facebook sweetens the pot with more user data, says 140 Proof’s Manoogian. “Sponsored Stories and social graph targeting are the tip of the iceberg when it comes to what Facebook knows about people,” he said. “As they start rolling out interest graph technology, which will make ads more relevant and valuable, prices will go up. And automakers (and all other brands) will pay, because social is where their audiences are.”
By Zach Rodgers
