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Why Marketers Shouldn’t Care that GM Pulled $10m of Facebook Advertising

There has been a lot made this week of the news that General Motors announced it is pulling its spend of $10m from advertising on Facebook. Obviously the news is getting more coverage due to Facebook’s IPO but the news should only interest those potential Facebook investors with little knowledge of how Facebook works, rather than marketers and people who know how Facebook operates for brands.

The piece of news that got less coverage was that GM also spends $30m creating and generating content for Facebook and as all good marketers know, to succeed on Facebook you need content not ads. GM’s CMO described their content on Facebook as being “effective and important” (Facebook needs to worry about how its gets its hands on some of this $30m but that is not for us to worry about).

When the Game Changed

If we go back 18-24 months, Facebook marketing was focused on advertising, whether it was PPC ads or Sponsored stories and brands were scrambling to jump on board and spend some budget on Facebook advertising.

Despite low and descreasing CTRs (currently estimated at an average of 0.04%), brands pumped the budget in. Then Facebook changed the game with their new Edgerank system and the clever brands realised that it was all about engagement, quality content and frequency of posting rather than getting more people to like your page (notice how GM spends 3:1 on content generation vs advertising). 

How to Win Now

To succeed now on Facebook you need focus on content and delivering value to your fans. Despite engagement levels apparently being low (estimated at approx 1% here and here) and posts only reaching 16% of your fans organically (according to Facebook themselves), Facebook wants brands and page owners to work hard at creating good quality content that fans like. Similar to how Google rewards websites that create good quality content which high search results.

While Facebook advertising can extend the reach of your page and can contribute to fan growth, you will win the Facebook game with content – which will deliver engagement, growth and reach and more in terms of favourable brand perceptions, awareness and so on. The news which should have interested marketers this week is the launching of the Pages app for iPhone – allowing community managers to manage pages on the go – a long overdue and welcome addition.

It’s a Platform Dummy!

The important item to remember is that Facebook is not an advertising channel (such as traditional TV or radio), it is a social platform. A platform where people (and brands) share news, stories, links, videos and pictures and where friends and fans can engage with this content and re-share it if they wish. This is what is important to Facebook and should be to marketers.

Whether things will change when Facebook has to report quarterly earnings and revenue growth is a different story but for now, the news that GM pulled 1/4 of its budget for Facebook (and the part that is least important) should not really be a big story for marketers.



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