GM Marketing Czar Joel Ewanick has quietly been discussing a return to Facebook advertising.
Most of the time you end a Facebook friendship with the click of a couple buttons but when General Motors decided to “Unlike” Facebook, several months ago, it made some major headlines.
The giant maker announced that it was pulling a $10 million account because it didn’t find much benefit to advertising on the wildly popular social media site. But now, it appears, GM may be having second thoughts.
The two companies confirm that some of their top executives from, including Joel Ewanick, GM’s global marketing czar, and Facebook’s marketing solutions chief Carolyn Everson, have met and discussed the very public flap – which came just days before Facebook’s controversial IPO.
“It’s all about efficiencies,” Ewanick explained shortly after word leaked out that GM would end its advertising deal with the website. Insisting there are “no sacred lines in the budget,” the executive stressed that “If we allow any inefficiencies in anything we do it’s actually holding us back.”
GM is by no means the only company to question the value of advertising on Facebook. A variety of studies have suggested that the social media site generates a significantly lower response rate – usually measured as “click-throughs” – than other online venues, such as Google.
On the other hand, Ewanick acknowledged that having a broader presence on Facebook is extremely effective. In fact, GM was planning to take the money it saved on advertising and use it to enhance the pages it posts on the site. Facebook doesn’t charge for those mini-sites, a strategy that some analysts suggest the high-tech firm may have to reconsider if other advertisers follow GM’s lead.
News of the automaker’s decision leaked out at perhaps the worst possible moment for Facebook, just days before a long-awaited initial public offering that saw the tech giant demand $38 a share for its stock. Within hours it surged to $45, the sort of first-day pop many had expected based on historical trends for high-profile digital companies. But with analysts and investors raising questions about Facebook’s business model the bottom quickly fell out.
By June 5, shares were down to $25.87, closing that day a whopping 32% below the IPO price. Facebook stock has slowly regained some positive momentum, rising 1.4% just yesterday to $32.17. But it would need another 20% kick for initial investors just to break even.
So, it’s no surprise that communications with disgruntled investors, analysts – and advertisers has become such a high priority. Along with the conversations at the marketing level, Facebook Chief Operating Officer Sheryl Sandberg has also held talks with GM Chairman and CEO Dan Akerson.
But, “There’s really not much news,” cautions GM marketing spokesman Pat Morrissey. “There’ve been conversations,” and Facebook appears to be looking for a way to bring the automaker back into its advertising fold.
In May, GM marketing chief Ewanick did stress that he would be open to reconsider a Facebook budget if he could see better potential returns.
At the same time, he ruled out the possibility that GM might reconsider its decision to pull out of the 2013 Super Bowl, where it had long been a major advertising presence. That policy appears to be holding, according to Morrissey who said there have been no meetings with the National Football League or the event’s broadcasters.
No surprise, according to several marketing industry sources who suggest that there’s been little trouble finding other advertisers to fill GM’s Super Bowl void.