Did GM make the right decision?

by Nick Nichols, Strategic Marketing Expert

Recently I was just discussing the effectiveness of Facebook marketing with a client. Specifically, did GM make the right decision in pullling its Facebook ads?

My opinion is that most B2C businesses and certain B2Bs should have a Facebook presence in the way of a business page, but the amount of time and resources devoted should be minimal – maybe one or two posts a week.

These days I think people expect a legitimate business to be on Facebook but with that said, I have yet to see documented evidence that daily Facebook activity or placing Facebook ads yields a profitable ROI – especially for local businesses.

Not one person I’ve asked has admitted to clicking on any Facebook ads – yet alone making a purchase via a Facebook ad. I’ve never done either… have you?

In researching my book, I found that less than 10% of Facebook users say they’ve been influenced by friends’ purchase recommendations on Facebook.

IMO, GM is correct in pulling their Facebook ads but they should still maintain an active presence – if for no other reason than because Ford and their other competitors are working Facebook.

With the recent radical format changes for the display of Facebook business pages – you can no longer overtly promote anything – such as “liking” in exchange for a reward – on your main banner – I just can’t see the value of putting much effort into Facebook marketing for a local B2B business.

However, if you have a niche product – especially a digital info-product that purports to solve a mainstream problem or issue – such as those related to dating, weight loss, investing or starting a home-based business – then I believe it’s possible to make money via Facebook ads. Because Facebook knows a lot about its users, it can deliver highly targeted ads based on its users’ interests in a way that no other mass medium can. This is what Facebook’s venture capitalists and investors are banking on.

Yes, there are some businesses that could benefit from an active Facebook presence – such as certain popular nightclubs, sports teams and venues, and other businesses that have a lot of photo ops – and – and this is the key – who have the type of business that lends itself to frequent repeat purchases.

Unless your business has the potential for frequent repeat purchases, I recommend that you invest just the minimum in creating and maintaing a Facebook presence and don’t waste money on Faceboook ads unless you have a mainstream digital product.