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Facebook loses GM's advertising business - does this have larger implications on the state of social media and e-ads?

Talk about poor timing: the same day that Bloomberg reported that Facebooks IPO is falling short of investors expectations, GM announces it has decided to pull all of its Facebook advertising. And thats no small account Facebook has lost it was a $10 million account.

According to the Wall Street Journal, GM decided to nix its Facebook campaign efforts after concluding the paid ads didnt significantly impact buyers. While the company says its business page is still a product it intends to invest in, it will no longer use the Facebook paid advertisement system.

This is bad news for Facebook for a few reasons. Losing an account especially a big one hurts, especially when its been made this public. But the larger impact is that this fuels the overvalued fire that just wont be extinguished. The skeptics have been crying foul since whispers of the word billions starting being thrown around: Facebook is big, sure, but its unproven. And a big part of all this caution has been uncertainly about the companys ad platform.

Facebook is trying to better corner mobile, where ads have been noticeably absent until recently. In fact Facebook recently edited its S-1 filing in order to reflect this change. Based upon our experience in the second quarter of 2012 to date, the trend we saw in the first quarter of DAUs increasing more rapidly than the increase in number of ads delivered has continued, an added section of the document reads. We believe this trend is driven in part by increased usage of Facebook on mobile devices where we have only recently begun showering an immaterial number of sponsored stories in News Feed, and in part due to certain pages having fewer ads per page as a result of product decisions.

Basically, Facebook user numbers are increasing but ads arent part of this is because of mobile growth, but youre certainly welcome to wonder if it also means the ratio of users to ad buyers is increasingly at odds.

Facebook isnt the only social site to raise eyebrows over ad monetization platforms. The stories of Twitters revenue struggles are almost as old as the site. Even after launching its self-serve ad platform, not everyone is convinced of its effectiveness as a marketing medium.

But theres a conflict here: Facebook and Twitter have the users these numbers are climbing, no doubt about it. And pundits continue to predict that social media ad spending will only increase. At the same time, there seems to be general confusion on making certain these campaigns are working. It doesnt help that while marketers are trying to adapt to this system, the likes of Facebook and Twitter are reinventing it. Everyones moving at different paces with different agendas, and considering the fact its not surprise that e-advertising has yet to hit its stride with even our most popular social networks.

So will this hurt the Facebook IPO? Dont get too caught up in the pre-May 18 (probably?) hype. Whether or not Facebook worked for GM, advertisers simply cannot and will not ignore it, but they might have to struggle with it. And because Facebook is Facebook, they will.

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GM pulls Facebook advertising amid growing concerns over social media marketing

General Motors has announced that it will no longer advertise its cars and trucks on Facebook according to a report in the Wall Street Journal. The poor performance of GM ads on the social network isnt necessarily an indictment of Facebook advertising, though. It may just be the wrong thing to market on Facebook.

The beauty of Facebook--and Facebook marketing--is the social aspect of it all. A commercial like the post-apocalyptic Silverado ad GM ran during the 2012 Super Bowl has tremendous appealon television. However, a social network is a different medium entirely, and it takes a completely different strategy to conduct a successful marketing campaign.

Facebook will miss GM's $10 million, but not much.Facebook is about word-of-mouth. The value of marketing on a social network is the sharing between friends and family. One person tries a restaurant and likes it, and shares that experience with the rest of their social network. Someone finds a pair of shoes that are comfortable, and posts it online for everyone to see. That type of interaction is less likely for big-ticket items like cars, but its a gold mine for small businesses that cant afford Super Bowl ads.

One of my PCWorld peers shared research from a Wordstream research study indicating that the click-through rate of Google ads beats Facebook ten to one. Based on that information alone, it would seem that any business would be better off marketing with Google ads instead of Facebook.

Facebook is nowhere near as mature as Google--its primary rival--when it comes to online advertising. But, it has the audience, and that audience spends more of its online time engaged on the social network than doing anything else, so the potential is there. As Facebook evolves and expands its marketing options, it will be fertile ground for online advertising--just maybe not for General Motors.

Larger companies like General Motors, or Coca Cola, or McDonalds can still benefit from marketing on Facebook or other social networks, but it should probably be viewed from the context of brand penetration and recognition as opposed to trying to measure sales resulting directly from the ads. Smaller businesses, on the other hand, can hit the jackpot with the right Facebook marketing campaign, and word-of-mouth advertising of the social network.

The $10 million account was a lucrative advertiser for the social network, and the ad revenue will be missed. But, the loss of GM as an advertiser wont exactly break Facebook. Facebook generated $3.7 billion in revenue in 2011 from advertising, making GM a mere fraction of a percent of the overall pool.

You can follow Tony on his Facebook page, his Google+ profile, or contact him by email at tony_bradley@pcworld.com. He also tweets as @TheTonyBradley.

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Why Facebook Marketing Doesn't Work for GM

NEW YORK, May 15, 2012 /PRNewswire/ -- Buddy Media, the social enterprise software of choice for eight of the world's top ten global advertisers, today announced many industry firsts as part of major enhancements to its social marketing suite. The enhancements -- including a unified social data API, conversion, campaign and goal tracking across paid, owned and earned social media efforts, and a new mobile content development platform enable brands to unify their social media programs with one enterprise social marketing suite.

"Social media marketing is anarchy right now within brands and agencies. Buddy Media is the only company to provide a unified solution that helps our customers to organize their teams, optimize their social programs to deliver real business results, and repeat," said Buddy Media Founder and CEO Michael Lazerow. "Buddy Media continues to lead the way in social marketing software, and our new product enhancements demonstrate why we are trusted by the largest brands, agencies, publishers, and retailers in the world."

Buddy Media is the only company to be named a charter Facebook Preferred Marketing Developer, LinkedIn Certified Developer and Google Engagement Solutions partner. The company's new industry-leading enhancements include:

Unified Social Data API

Buddy Media is the only company to allow brands to break down siloes with a unified social data API for their social media presences, conversations and ads. Brands can now:

"It is essential for brands to be able to easily export all of their social data programmatically, and integrate it with existing CRM, email or other business process software, so social can be truly integrated into greater business decisions," said Lazerow. "It's another first for Buddy Media to be able to give brands all of their social data, across paid, owned and earned media in one API and one software solution."

Universal Comprehensive Conversion/ROI Tracking

Buddy Media is the first social marketing software company to launch universal conversion tracking across its entire social marketing suite. Brands can now see in real time which content is performing best, and specifically which social posts, applications and sharing activity drive the most conversions. For example, if a user posts several updates to a social stream that link to a Buddy Media social application, the user can track the conversions driven by each specific update, such as a form submission or a video view.

"It's not enough for brands and agencies to only know qualitative data such as shares and comments. They also need to know specifically which content is driving the most actions," said Lazerow. "With Buddy Media, you can now optimize content specifically for actions, not just engagement."

Mobile application platform

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Buddy Media Leads Industry Standards Forward With Unmatched Enterprise Social Marketing Suite Enhancements

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Posted 10 May 2012 21:52pm by Heather Taylor with 2 comments

Today, LinkedIn launched its inaugural Financial Services Summit in New York which focused on the role social media is playing in the financial services industry. The first panel brought together representatives from American Express, Citi, Fidelity Investments, Prudential Retirement and Hearsay Social to talk about using social media in financial marketing.

It was curious to see a panel on social media where only two out of six individuals on the panel have Twitter accounts. One was Clara Shih, who runs the agency Hearsay Social, and the other, Frank Eliason, SVP of Social for Citi. The panelists' lack of Twitter accounts felt like a microcosm highlighting how most financial service organizations are behind in social media.

Not that Twitter is the be all and end all of social media, it is a communication channel for 140 million active users. Saying that, in LinkedIn's new findings released today, financial advisors are mainly reaching out to prospective clients on LinkedIn with Twitter only used by 8% of them. Even brand identity building primarily takes place on LinkedIn over Facebook, Twitter and Google+ for those working in an advisory capacity.

Though the panelists did mention communication on all platforms, a lot of the issues they are facing aren't about where the conversations are taking place. It's rather that financial institutions need to put customers at the center of their decisions as well as enable their employees to do the same.

Below are a few of the key takeaways from each of the panelists. These points could be taken across any organization, especially those who have to deal with compliance issues and regulatory bodies:

There are two main things that Shih highlighted about how social media is shifting the way financial services market themselves:

1) Proliferation of online identity where people freely sharing what they do, who they are, etc. is very valuable for the financial world. When people get married or have a career change, these are great triggers for financial services discussion and this is when financial advisors and institutions need to reach out to customers.

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The role of social media in financial services marketing

When MySpace ruled the social media world in the early 2000s, everyone believed social networks were only sources of entertainment. Ten years later, social networking has not only taken a central role in our daily lives, it's also integral to any successful business strategy. If you want your business to succeed, it better have a presence on Facebook, Twitter, Tumblr or any number of specialty social sites like Pinterest or SoundCloud.

Until about five years ago, however, the true impact of these networks could not be measured precisely. But now, we can see that the social networking boom has unleashed great waves that are breaking business models left and right, and it's all for the better.

Social media give companies a chance to humanize themselves, giving fans exclusive content in return for their loyalty. Not only do companies gain more fans over Facebook and Twitter than any other platform, but companies can use one of several analytics tools to measure the growth of their brand on those networks to find out the topics or methods that resonate best with fans. It's an effective strategy, and it's helped change the fortunes of several companies on the brink of solvency.

Jeff Ragovin, the co-founder and chief strategy officer at Buddy Media, spoke at Mashable Connect 2012 in Orlando, Fla., to explain why companies must "adapt [to social], or die." In his lecture, he used three companies -- Mattel, Ford, and Kodak -- as poster children for why social media are an essential part of one's marketing strategy.

Mattel and the Bald Barbie

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On Dec. 20, 2011, a Facebook page was launched for a "Beautiful & Bald Barbie," but it wasn't launched by Mattel. The page was started by two women -- Jane Bingham and Rebecca Sypin -- and its mission was to build enough momentum to eventually petition Mattel to create a bald Barbie for kids with cancer.

When it launched, it started because Bingham and Sypin both had daughters who lost their hair due to cancer treatment, and they wanted a bald Barbie to make the baldness feel "normal." The story spread fast, and the Facebook page grew from 0 to 40,000 fans in a few weeks. A month later in January, the story got out to media outlets. By March, the page had 150,000 fans. Thousands of photos and stories were shared about kids with cancer, and more than 150,000 people poured out petitions to Mattel, and pictures of their own children fighting cancer, all for the sake of getting this doll made.

Finally, on March 27, Mattel announced it would produce a bald Barbie with wigs, hats and scarves.

"Play is vital to children, especially in difficult times," Mattel said.

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Social Media Marketing Strategies: How 3 Companies Changed Their Fortunes With Digital