Bet on Facebook’s Content – But Maybe Not on Facebook
Facebook (and its investors) have a problem that those media “dinosaurs” of old do not. Why would anyone want to pay Facebook for advertising when they can publish whatever they want on the site for free?
A story on the front of today’s Wall Street Journal pointed up the problem: “GM Says Facebook Ads Don’t Pay Off.” One of the nation’s top three largest advertisers, GM spent $10 million on Facebook advertising last year and plans to pull it “after deciding that paid ads on the site have little impact on consumers’ car purchases,” the story reads.
But listen to this:
The auto maker's marketing chief, Joel Ewanick, said the company “is definitely reassessing our advertising on Facebook, although the content is effective and important.” Mr. Ewanick has spent the last year restructuring the Detroit company’s marketing operations in an effort to cut billions of dollars in costs.
Content refers to the unpaid Facebook pages GM and other companies use to promote their products. GM spends about $30 million on content created for the site, including on agencies that manage the content and daily maintenance of GM's pages, people familiar with the figures said.
The key phrase: “The content is effective and important.” You know Ewanick wouldn’t say something this lightly. How is GM measuring that effectiveness, I wonder? In any case, it’s worth spending $30 million a year on, which is already three times more than the automaker used to spend on site advertising before it pulled the plug.
On Facebook today, GM moved to reassure its fans that it still loves them—even as it affirmed that it had no interest in paid advertising on Facebook.
Just wanted to let our millions of Facebook fans know, we're still here, and we 'like' you back! We may not be advertising on Facebook at the moment but we'll still be talking with you all daily. If anything, we will be providing more content across our many GM Facebook pages - including Chevrolet, Buick, GMC and Cadillac - to keep the dialogue going.
The message from GM is clear. GM can maintain and build its dialogue with customers through free Facebook content. With great content, the advertising is not so important. (The post was followed by a ton of supportive comments from fans who say they rarely click on Facebook ads.)
The message for content mavens is also clear: The IPO could collapse, and even mighty Facebook could die. But content lives on.
Richard Sine writes about business, personal finance and health for magazines and content marketers. He writes regularly for Men’s Health magazine and for brands such as Fidelity Investments, UPS and Children's Healthcare of Atlanta.