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General Motors is discussing the prospect of reauthorising paid Facebook advertising.
GM abruptly abandoned Facebook ads in a highly public blow to the social network days before it went public in May. The automaker maintained its free brand pages on the site but said its $US10 million Facebook ad budget wasn’t delivering an adequate financial return.
But now the Detroit-based automaker is considering Facebook advertising again, a GM spokesman confirmed in an email after several news reports, including the Wall Street Journal.
Chevrolet Vice President of Global Marketing Chris Perry, who was involved in the previous discussions over GM’s Facebook advertising, recently told the Detroit Free Press that GM had been seeking creative flexibility on the social network’s advertising platform.
“We talked to them about a couple of things, we offered up some ideas, we said bring us your ideas,” Perry said. “We said, ‘We’ll be your guinea pig. We have the dollars to invest in this program.’ “
But GM ultimately determined “the paid advertising just doesn’t seem to pencil for us,” Perry said.
Other automakers – like Ford, which trumpeted its faith in Facebook advertising after GM’s exodus – continued to advertise on the site.
GM has maintained an active presence on Facebook with dedicated pages for all of its brands and promotions like Chevrolet’s “Stay Clutch,” a Facebook contest offering millennials a chance to win stick-shift driving lessons at Major League Baseball’s All-Star Game.
GM, which spends about 25 per cent to 30 per cent of its advertising budget on social, digital and Web marketing, has about 8 million “likes” on its Facebook pages.
“We certainly don’t want to walk way from 900 million consumers, and we haven’t walked away,” Perry said. “We’re a big proponent of Facebook.”
Still, industry experts say Facebook needs to improve the effectiveness of its advertising. About 16.6 per cent of the site’s users have either clicked on a Facebook ad or showed an interest in purchasing a product, according to research firm Kantar Media Compete. That was less than the percentage for search engines like Google and Yahoo.
Facebook has also acknowledged that it needs to improve the mobile version of its site, which is growing fast but generates little revenue.
A Facebook spokeswoman declined to comment.
GM CEO Dan Akerson has cited Global Chief Marketing Officer Joel Ewanick’s efforts to cut inefficient ad spending as an example of how the company needs to streamline its operations. The company also recently pulled out of advertising for the 2013 Super Bowl.
Akerson told reporters before the company’s annual meeting last month that GM would save $US400 million a year in advertising through the heightened focus on efficiency, which has included consolidation of GM’s advertising agency client base.
He said GM is focused on “impressions in the marketplace,” marketing jargon for the number of consumers who see an advertisement.
“That’s smart business, and we’re looking at every aspect of the business in the same way,” Akerson said.
Detroit Free Press