Raincastle's Web Design & Marketing Blog


May 18, 2012 11:12:00 AM

GM Dropped Its Facebook Ads, Should You?

The Wall Street Journal broke the news on Wednesday that automobile giant General Motors has decided to discontinue its Facebook advertising efforts, which previously accounted for $10 million of its $1.8 billion ad spending.

GM ultimately decided that “paid ads on the site had little impact on consumers’ car purchases,” after two weeks of meetings with Facebook executives. This decision comes off the heels of Facebook’s IPO announcement and its 2012 statement of advertising revenue, which totaled $3.1 billion. 

GM Facebook ads

GM will continue to promote its products on Facebook, but has dropped all Facebook ads.

As a result, Facebook ads have been getting a lot of heat for being ineffective and unnecessary. It’s too soon to tell if GM’s actions will inspire other companies to jump ship, but there has certainly been a lot of speculation on what exactly this decision means.

But just because GM has concluded Facebook ads don’t work for their business model doesn’t mean that the ads are unsuccessful for all businesses.

Facebook ads are not the right channel for every business. They can work really well for businesses that want to segment their ads to different audiences based on this personal information they willingly provide on Facebook. 

For a B2C company that relies heavily on imagery and visuals, it’s not surprising that GM had little success with Facebook ads. A social media ad most likely isn’t going to influence a large purchasing decision, but can be influential in harnessing individual data and funneling that into a reasonable target audience.

If you’re a B2B company seeking out clients, and have the ad revenue to utilize Facebook ads, you can use them to define this target audience by:

  • Industry
  • Job title
  • Location
  • Professional groups
  • Professional interests
  • Past employment

GM will have a higher success rate with television ads; that doesn’t mean your B2B business will.

Facebook ads

Additionally, Facebook is constantly working to improve their ad effectiveness:

Of course, the only way to determine if Facebook ads are a fit for your company is to test some out. If not, simply having a Facebook presence that encourages interaction with past, current, and potential clients is a hugely important factor in improving conversion rates and bringing in business.

Do you currently run Facebook ads? Do you plan to limit them anytime soon?

Tags: marketing / advertising / social media / Facebook