Hey Everyone,

I just read an interesting article on Business Insider on the impact of Facebook ads – Do they work? You can read it here.

Anyway, quick summary: GM has decided to pull out of Facebook because they feel the ads do not produce a measurable ROI.

I find this interesting, and was wondering how others felt about this news?

Jason

@jasonreilly Hi Jason

Thanks for posting that article – very interesting! But on to your question…

In my experience, FB ads DO work. But it does come down to how you use them and what for. I understand @nurby ‘s point about targeting but I still think they work well – at least they have for me.

But onto the bigger issue here – I am not surprised GM have pulled out of the FB ads – big business don’t know how to use social networks effectively.

An example of that is how much they have spent: $40 million! ($10 million on the ads themselves and $30 million to ad agencies).

No wonder they cannot get ROI.

The fact that they spent this much in the first place shows that they treated their FB strategy like it was television.

And what comes as even more of a surprise is that their FB page is getting some nice engagement. Why not spend the $30 million you are paying to the ad agencies and spend that getting even more organic engagement?

They are not dropping Facebook ads because the ads don’t work, they are dropping Facebook ads because they don’t know how to make them work.

My 2 cents.

Russell

One of my clients is an artist who simply raves about Facebook. She found that the key to her success was (a) advertising ONLY in the U.S., (b) making sure that the key words were hyper targeted. For example, targeting the term “art” under people’s likes was way too non-specific.

In spending just $5/day or $150/month she had more than 5500 ENGAGED new fans in 6 months’ time, and has had an enormous response to commission work, which is what freelancers live on, so she is thrilled with her results. It is well worth her investment.

Hers was the first time I’ve heard of positive results, but I think I’m going to try it for my husband and see what kind of results we get.

I have used FB ads once to increase the number of likes. Approx 50% of the clicks resulted in likes, which is quite satisfying for me. The new page fans increased our engagement level, during the time the ad ran, we had an impressive ‘people talking about this’ rate. Considering the money we spent (EUR 100 for a duration of 3 months) I’m really happy with the result and will repeat this activity for another customer of mine as well.

I’m glad you posted the question Jason. Currently I’m about to start advertising on FB. Just my two cents of what I’m think is…

Keep it social. Since most people that log in to FB are in a social not a buying frame of mind, keeping it social (free gifts, surveys etc) then adding them to your sales funnel is probably a more effective way to go (that’s what I”ll try).

Denise’s post is the perfect example and product for Facebook. Art viewing, buying or collecting is a social activity which appeals to our creative nature… car buying does not.

Rudy

I’ve had great results with FB ad campaigns. One suggestion I make to all my clients is that you post ads with a destination url inside FB (perhaps a custom app) instead of taking them to a website. People come to Facebook to be on Facebook, not your website. It’s been my experience that ad campaigns driving traffic to a website do not convert as well as ads that drive traffic to a FB url.

Fact 1:
Facebook ads may or may not work, depending on your specific goal, and the kind of campaign you are running — it might be just a branding campaign, or promoting a specific offer. Whether something “works” is defined differently every time.

Fact 2:
It is extremely difficult to have measurable ROI through social media, unless you build a campaign with measuring ROI in mind (complete with proper landing pages, measuring conversions etc)

Fact 3 (and most important):
These guys were spending “$40 million a year on their Facebook presence”? Anyone will tell you this is a ridiculous amount of money to spend on social media… I want to meet the person who convinced them that they were going to get this money back through sales coming from Facebook ads.

Bottom line: As far as I can tell, I say this was an unsuccessful campaign before it even started. Of course it was a good idea to pull out of Facebook. On a social media website you should behave as if you are on a social medium. Spending huge amounts of money completely defeats the purpose…

Couldn’t agree more with @relevant and @davidblide

Ive found the FB ads work but not for everyone. It truly does depend on your industry but even an industry that may not appear to be ideal in the world of FB can work. As a designer and specialist in Wedding Design obviously FB works well for me targeting females who list themselves as engaged but for a lot of other industries its a tougher nut to crack. Keeping in mind the ROI is never gonna be 20% or more, or at least difficult to maintain that level but really getting creative in the ad design and using the right title can help.
My thoughts on the GM pull made me laugh at the typical corporate way of things. Jump on board late, throw money at the problem and never engage. Ford is thrilled about the GM decision. While I am not an owner of Ford or GM, I do applaud Ford for their constant approach at the younger group that started a few years ago with their Ford Fiesta Social Marketing campaign. 

When I saw that they spent 10 million on FB ads I nearly fell over in laughter. Talk about not understanding the concept. They just throw money at the problem, what was even more laughable was that they spent 30 million with ad agencies. GM has an old dinosaur mentality and are trying to fix it with new money. They are lost.

I agree with those who said that all depends on what you are using FB ads for. If you are after more likes to your page quickly, I can’t think in a better than a sponsored story. On the other hand, click-thru rates on regular ads are rather poor, and I guess it happens due to one of FB’s main characteristics: people visit FB after news and events which are shown to them, instead of going after information. It’s different to Google, for instance, a search engine which is used to go after information, and some ads appear as an answer to what the user is looking for. It might be a poor analisys, but I think It’s one of the reasons for low ctr’s on FB ads.