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GM ditches ads, but rides Facebook’s IPO coattails


As this week’s news headlines swirl with the Facebook IPO frenzy, I was surprised to see General Motors (GM) – (yes, THAT GM, the one U.S. taxpayers still own a portion of) – try to get in on the action and announced plans to stop advertising on the site because – in a nutshell – it’s not worth it. In what appears to be the first time in the last decade, GM is looking to spend their money more effectively.

Take a closer look at the numbers and break down exactly what this means.

GM spends about $40 million on Facebook (each year????), with just $10 million of that going to Facebook ads and roughly one half of one percent of the company’s $1.8 billion annual ad budget according to Kantor Media.

You’re probably thinking, “WOW, GM spends $1.8 billion on advertising? Why does Facebook even matter?”

Well, you’re on the right track. It doesn’t, if we’re actually talking about GM’s total advertising spend.

What does matter is headline news, and Facebook is in the headlines. What better time to stir up a little (media) controversy: the largest U.S. auto maker to pull back such an ‘insignificant’ amount of advertising funds just days before the big Facebook IPO. Well played GM – you’re in the top stories.

Otherwise, who else sends out news releases that they are shifting .55 percent of their marketing budget? Or who sites a statistic that 53 percent of users don’t click on ads as a main reason? I’d be willing to bet 53% of users skip their ads on Tivo, or 53 percent of readers skip over their print ads (I could go on and on here).

But you don’t see national headline news that GM is suspending billboard placements because 53 percent of drivers don’t pay attention to the boards.

And then, there’s the infamous POLL. No, no, not the Gallup poll that found the majority of Americans still oppose the auto bailouts. We refer to the AP-CNBC Facebook IPO poll that found 59 percent of the respondents said that they had little to no trust in Facebook to keep their information private and that (here’s the good part) Americans who have seen “The Social Network” have a more favorable impression of Mark Zuckerberg than those who haven’t seen it.

C’mon – Really?

Really. And now the media jumps to “trust.” But is that really at issue? Sure trust matters, but it needs to be based on facts, not feeling. And based on “The Social Network” poll, we’re betting that feelings are trumping facts right now. Especially when fueled by an insignificant fact like shifting .55% of your budget.

Will we see a mass exodus of major brands from Facebook advertising? Doubt it. Can we ‘trust’ Facebook? Probably no more or less than anyone else, but on the plus side, Facebook certainly doesn’t have the poor track record of the U.S. auto industry. At least not yet.

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