There is quite the kerfuffle in the Intertoobs about GM ending advertising on Facebook. Many seem to think it is no big deal. There are some that see this as a black mark against Facebook, particularly in light of the upcoming IPO. That camp seems to be contending that Facebook is a flash in the pan, particularly since it came out at the same time as poll results indicating half of Americans think Facebook is a passing fad. At least one commentator thinks this may be a ploy by GM to get better ad rates, since their pulling ads has the potential to dampen the IPO a bit. There certainly seems to be more to this.
Well Known Brands, Not Great Marketing
First, let’s start with a bit about GM: they aren’t exactly the most brilliant of marketers. They have done a tremendous job of building and maintaining a few key brands, particularly given the beating they took during the bailout, bankruptcy and restructuring. But GM marketing in the past 3 decades hasn’t exactly been a stand-out, other than perhaps as a statement of bland and a bit bewildering. Their two key brands, Chevrolet and Cadillac, are like Coca-cola or Mickey Mouse. A lot of people know about them. Many recognize their main images (the bowtie and the shield). As a brand, Chevrolet is very “American”, but it does carry a fair bit of weight in Asia, the Middle East and South America. It is less visible in Europe (where most GM’s are Opels on the continent and Vauxhalls in the UK).
So they have two key brands that come with a certain amount of automatic recognition, simply because of history. They have at least done little to harm the brands. What GM has not done, though, is a tremendous job of moving them forward on the marketing front. The Cadillac brand has managed to shed its stodgy image, but that has more to do with the product that the marketing around it. It speaks to the power of good product, which makes the job of marketing and building the brand a lot easier.
GM is a company that is still trying to find its way. They continue to struggle with internal politics and internal culture. They have managed to overcome some institutional problems that led to dull or inspiring designs, and a culture of indifference when it came to quality (real or perceived). But they still tend to get hampered by an over-reliance on focus groups and design-by-committee. Despite this, they have managed to put forward an impressive and competitive line-up of cars. They do face a real risk of their “we’re GM and we know better” arrogance taking hold. We’ve seen it leak out here and there from time to time.
The result is that we have a company here that is still sometimes 2-3 decades behind when it comes to dealing with managing their image. It appears that GM just hasn’t figured out how to manage their interaction through social media, in part because they appear to be considering it just another form of print advertising: a one-way “push” communication from the company to current and potential future customers. They just aren’t a company set up to deal with ad hoc two-way communication with the public at large. GM still seems to want to get their feedback in the form of hand-picked and carefully controlled focus groups.
Could It Be A Ploy?
It is entirely possible that GM’s ploy to “stop advertising” on Facebook is primarily a ploy to get better pricing. GM isn’t shutting down the Facebook pages. They apparently will continue to do some advertising on the platform, but it will be scaled back more than stopped entirely. This wouldn’t be the first time a big, or at least highly-visible, advertiser has done this. In some ways, facts may bear this out as one of the more likely motivations.
Why? Facebook is the single-most visited site on the Internet. And not just in the United States, but globally. It receives 1/5th of all the traffic. If the numbers about total accounts is true, they have captured nearly 1/7th of the world’s population. That represents a huge, huge target for any kind of advertising. To not want to put your ads, even bad ones, in front of that large an audience seems rather silly. That is why I believe part of their motivation is business, specifically to get Facebook to cut a different or better deal with them.
Officials at GM claim that the announcement, coming just before the IPO, is a coincidence. Their position is that this was something that has been in the works for a while, and it just happened to come out shortly before one of the biggest and most-visible (and most-hyped) IPO’s in history. Personally, I don’t buy that. It wouldn’t make much, if any difference, to have waited until a month or so after the IPO. Part of this announcement looks and feels staged in some ways.
Never Ascribe To Malice…
While the timing is suspicious, I’m not convinced that is 100% of what is going on here. There is a saying: never ascribe to malice that which can be attributed to stupidity. Basically, it means that there isn’t a conspiracy. The timing of the announcement has to make you wonder about what people at GM were thinking, and I’m sure some thought this would be a good time. But I also think that this is basically part of a larger problem with GM: they just don’t seem to know how to engage with customers. GM’s contention is that they want to redirect the spending to help their dealers, who they consider to be the face of GM. Newsflash: someone who buys a Chevy, GMC, Buick or Cadillac is not just a customer of the dealer, they are also a customer of GM. Sure, it would be nice to try to be “hands off” and make the dealer’s solely responsible for customer interaction. But the real world doesn’t work that way. It doesn’t work that way for any other product. I may have bought my TV from BestBuy, but I am Samsung’s customer. The same is true for cars: the dealer may sell you the car and service it, but you are as much GM’s customer as you are the dealer’s customer.
Ultimately, this seems to point to a larger problem within GM, and one that has historic roots going back to their heyday of the 1950’s and 1960’s. When they were on top, and made 1/2 of all cars on the road in the US, GM didn’t need to engage with customers. It took GM a long time to realize they weren’t invincible, and that they weren’t in control of the industry anymore. It took the bailout and bankruptcy to drive that point home. But some institutional memories won’t fade, and GM still can act as if this is 1963, they are on top, and they don’t have to engage with customers in a direct fashion, because the dealers will take care of that.
Ford, Honda, Toyota, Kia, Hyundai and others have all figured out that things have changed. Ford has found their use of Facebook effective, but they tend to take a different and more interactive approach. All of these companies have found ways to engage with customers in a more direct fashion. They don’t just push product out, make a bunch of print and TV ads, and then sit back and wait.
GM still seems to have a mindset that is no longer relevant in a connected world with social media at its core. Their pulling back from Facebook shouldn’t really come as a surprise. I also won’t be surprised when (not if) they reverse direction and return to the platform.