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Marketer Responds to GM's Facebook Decision

May 17, 2012

DETROIT – Facebook’s influence on car buyers was called into question after the Wall Street Journal reported on General Motors’ decision to stop advertising on the social-networking site. But one digital marketing firm is coming to the defense of Facebook.

Rick Gibbs, president and chief technology officer for Dealer.com, would not comment on GM’s decision, but said he believes Facebook has one of the strongest networks for reaching automotive customers via a comprehensive advertising, content and engagement strategy. That approach, he added, has had a positive impact on his clients' brands and bottom lines.

“Most advertisers are focused on the wrong key performance indicators when measuring Facebook advertising effectiveness,” he said. “The opportunity of social networking advertising lies beneath the surface at a micro-level of brand engagement, audience reach and customer interactions. When done correctly, the results are increased engagement and customer loyalty before, during and after the purchase.”

Quoting a GM official, the Wall Street Journal reported that the carmaker plans to stop advertising after deciding that ads on the site have little impact on consumers’ car purchases. The Detroit automaker spends about $40 million on its Facebook presence, the report said, $10 million of which is directed to Facebook ads.

Whether Facebook is effective at moving cars has been a hot topic of late. Proponents of Facebook say the social-networking site isn’t geared toward selling cars, and should be viewed as an opportunity to build brand awareness. Dealers have also wrestled with the question of whether to outsource content creation and management of their Facebook pages.

Last week, F&I and Showroom reported on a recent shopper behavior study that showed many dealerships are successfully utilizing Facebook to generate new visitors to their Websites. But the study also showed that traditional methods are still required to turn visits into leads.

"The data shows that Facebook is a good approach to getting new visitors to dealership sites,” Dylan Snyder, senior manager of business intelligence at Dataium. “The lead-to-visitor ratio, which is less than half of our network average, is disappointingly low, however. This highlights that dealerships cannot rely on Facebook alone; traditional methods are still needed to turn these new visitors into leads."

Comments

  1. 1. Heather Barnett [ May 18, 2012 @ 07:57AM ]

    I agree with Gibbs. Many businesses (including those outside the auto industry) don't do well on Facebook because they're stuck in an old mentality about what advertising is and how to measure success. With the advent of the internet and social media sites like Twitter, Facebook and Pinterest, the game has changed. Unless they're hobbiests, most customers are only looking for a car when they need or want one.

    The goal of these types of social media sites isn't to sell cars (or dresses or cheese); it's to engage your customers in fun and interesting ways that solidify your branding in the consumers' minds, but also provide opportunities for engagement. They may not be looking for a car now, but they may be in a year... which dealership will they think of first? They may even start their search on Facebook by reaching out on your Wall to ask a question. If they like you, they'll prefer to give you their business than go to someone else.

    Take a look at Fort Worth's Bankston Ford's Facebook page. They aren't just trying to sell cars. Sure, they let you know what they've got, but they aren't pushy. They also provide interesting articles, like the one their now about improving gas mileage. They post interesting vehicle-related videos, and tout their accomplishments (any awards they've received). They could use a little more work on getting customers to interact with them, but it's likely someone who works for the dealership is managing the page when they have time (which is a good argument for hiring a social media consultant who can dedicate their time to your goals).

    I wouldn't count Facebook out, yet. I also suggest that they check out Pinterest. This much more visual medium may be just what the doctor ordered for dealers, who not only have the opportunity to show their wares in the best possible light, but can provide descriptive captions to draw users in.

  2. 2. Gary Marshall [ May 18, 2012 @ 08:13AM ]

    GM is thinking too short term. Corporate advertisers in social media should be focused on imprinting the brand, quality, and attractiveness rather than immediate sales results.

    Remember the Hummer commercial with kids driving the Hummer, and the one where the boy who built a wooden Hummer and won the race by going off-road? Today's high school and college aged youth were influenced by that, and they LOVE the Hummer brand. Just like I LOVE the Corvette brand, from my youth.

    Advertisers haven't learned how to turn social media advertising into immediate sales very well. But it will be vital for the future.

  3. 3. Ben Hadley [ May 22, 2012 @ 01:45PM ]

    Its really simple but too many CEOs, Dealer Principals, and GMs are trying to Monetize Social. Show me the money they always say. Amy Jo Martin at the Harvard Business Review had a great rebuttal to this type of thinking. When a CEO asks her for KPI's that show how much money social is bringing in, she asks for KPI's that show how much money they brought in from their telephone system, and then after the awkward pause asks how much money they would lose if they didn't have a phone system and only expected people to interact with the dealership face to face.

    This is the way You have to think about social. The conversation is happening whether you are apart of it or not. Your best option is to join in.

 

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