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Why General Motors pulling the plug on Facebook doesn’t mean anything

May 15, 2012

Chances are you heard this news:

General Motors (GM) will cease running paid advertisements on Facebook, according to a source close to the situation who spoke to CBS on condition of anonymity.

There was a Wall Street journal article that wondered, “whether ads on Facebook help them sell more products.”

We saw this with Pepsi – the other way. Pepsi decided to pull all ads from TV and go only digital. That resulted in Pepsi losing second place to diet coke.

Banner ads:

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I remember learning about how a car company was using banner ads and landing pages to drive people into the showroom. A banner ad would generate awareness and take someone to a landing page that would allow them to custom make their car. Cookies would allow follow-up ads. The landing page would be customized to the behavior of a person. It’s all very complicated, not very sexy, and it can work because it advertises to behavior.

So what does this have to do with General Motors pulling their ads from Facebook? The point is in the words of the article: Facebook doesn’t appear to be selling product.

Here’s a hint: TV doesn’t either. Nor does radio. Or billboards. Or fancy banner ad systems with landing pages.

Most car ads generate a desire to come into a dealership and look at cars. That’s pretty much the goal of all car ads. Generate awareness. Generate traffic. Get sales.

But the advertising above advertisers to behaviors. Search, watching a TV show, driving past a billboard. It is the classic shotgun approach that generated that famous line about how half of advertising works, the problem is knowing which half.

So how is Facebook different?

Facebook does things a bit differently. Facebook advertises to people, not behaviors. I recently advertised to 6000 people on Facebook. There is no other marketing medium that would have allowed me to advertise to 6000 different people. Those people say the ad almost 200,000 times. Only 87 people clicked on the ad, but based on the final goal, we think the impressions helped result in actions.

And that’s sort of the point. General Motors is looking at this as if it is a mass tool. Something they can throw a bunch of money ad in order to generate a behavior. Like a banner ad or a TV spot. But it isn’t like that. Facebook allows marketers to advertise to a small group of people with the message they want.

General Motors doesn’t want to do that – nor should they. Just like Pepsi should never have given up TV spots. Just because Facebook offers marketers the chance to advertise to people – and not behaviors – it doesn’t mean companies like GM should throw 10 million at it.

That said, GM could advertise on a smaller scale. But they are GM.  They won’t, not after this public ‘un-friending’. And we won’t stop using Facebook.

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