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GM Kiss-off Screams Need For Facebook Ads That Follow Users Around The Web

By Kashmir Hill

   After spending nothing but time on Facebook, I’ve attracted over 100K followers. After spending $40 million per year on its Facebook presence, as reported by the Wall Street JournalGeneral Motors has attracted just 378K fans to its primary page. While it does have dozens of other car-related Facebook pages which have also attracted ‘likes,’ that’s fairly depressing and is perhaps part of the reason that the company wants to cut back on its Facebook spending.

In a piece of nasty timing for Facebook, given that it’s going public this week, GM revealed yesterday it’s pulling the plug on the $10 million that it pays directly to Facebook to advertise there. GM tells my colleague Joann Mullerthat it wasn’t maliciously timed, but it does have many people questioning the value of advertising on Facebook.

Some people, including Ford, are arguing that GM simply didn’t get it, and was doing social advertising wrong with little understanding of how to engage users or optimize their content in the newsfeed. But techie/blogger/investor Chris Dixon points to a bigger problem: that Facebook, despite how novel it is as a social networking company, is old-fashioned in its business model. It relies on display ads like a traditional media company, points out Mathew Ingram at GigaOm. And while it’s got tons of eyes to display to, Dixon notes that “ads work dramatically better when consumers have purchasing intent.”

Most of us are on Facebook with an intent to purchase anything; we’re there to play, to look at our friends’ photos, to find funny viral videos. We are not in fact interested at that moment in buying a new car or checking out the dentist offering discounts to our college network. In another bit of nasty press for Facebook this week, an AP-CNBC poll has 83% of Facebook users polled saying they “hardly ever or never click on advertising or sponsored content” on the site.

That’s why it’s so crucial for Facebook to roll out an ad network outside of Facebook. In a recent change to its privacy policy, Facebook clearly established its right to display ads to you around the Web based on what you’ve said and done on Facebook (and what your friends have said and done). Once it rolls that product out, it will be a fierce competitor with other ad networks whose imperfect knowledge about you is gleamed from dropping cookies and tracking your browser activity. This way Facebook will be able to put ads in front of you in places where you actually have purchasing intent, and those ads could be highly effective given the rich database of information and social linkages that Facebook has on its users.

After all, you’re probably far more interested in the fact that 35 of your friends like the Mustang when you’re Googling “new car” than you are when you’re flipping through those friends’ photos.

GM Kiss-off Screams Need For Facebook Ads That Follow Users Around The Web


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