Advertising

Small Businesses Lessons from GM's Facebook Ad Pull

By | 05.22.12

Small Businesses Lessons from GM's Facebook Ad Pull
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GM didn't like the results they were seeing.

In the lead-up to Facebook’s IPO, it was revealed that GM would be shutting down $10 million in Facebook advertising. Much has been said about how this move will impact Facebook, but there are some important lessons to learn from GM’s side of the table.

Advertising Review

Late last year, GM decided to begin a large-scale review of their advertising budget. According to their annual reports, GM spent $4.2 billion on advertising in 2010 and $4.4 billion in 2011. GM’s stated goal for the review was to “improve the efficiency and effectiveness of its global operations for purchased media.” They also said that the review would “include all consumer-facing planning and buying operations in support of all media channels including print, digital, broadcast, SEO and social media.”

GM saw that their advertising spend was growing and decided to try to get it back under control. Cutting back on Facebook ads was one of the consequences of this review.

Facebook Ad Performance

GM determined that Facebook ads simply weren’t providing good enough results. That doesn’t mean that Facebook ads can’t be a valuable addition to an online advertising campaign. It just means that the format might not have been right for GM’s campaign. Even large scale companies can find it difficult to turn some forms of online advertising into revenue.

Small Business Lessons

This move carries with it a lot of important lessons for businesses of all sizes. Most businesses have to rely on some sort of advertising to survive, and a growing advertising budget is a normal part of a growing business. It’s in your best interest to occasionally do what GM did.

Review Your Campaigns

Look at the big picture of where your advertising dollars are going. Make sure you’re not outspending your budgets, especially in online advertising spaces. It’s all too easy to get lost in the day-to-day operations of your business and find yourself with a larger than expected advertising bill.

Find Inefficiencies

Different advertising mediums will drive different kinds of consumers to your business. Use any reports at your disposal to find out which advertising campaigns are actually generating revenue and which ones are just eating up budget.

Try Something Different

GM may be cutting back on their Facebook advertising spend, but that doesn’t mean they’re abandoning Facebook altogether. They’ll still be dedicating a considerable budget to maintaining their presence on Facebook and interacting with their customer base. If an online advertising campaign isn’t performing, it might make sense to try directing the traffic to a different landing page or offering different incentives to consumers from that campaign.

Cut Without Fear

Once you’ve separated the good from the bad, redistribute your advertising campaigns accordingly. If you’ve repeatedly tried different approaches to a campaign without success, it might be time to shut it down and find a better way to spend that budget.

Always Look Back

GM has left the door open to running Facebook advertising in the future. Something may not be working right now, but the advertising marketplace is always evolving. When reviewing your advertising campaigns, don’t be afraid to look back at once-discarded campaigns or partners and see if they’re offering something new.

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