When General Motors dropped its paid campaign on Facebook, it was a massive slap on the face for the social-networking website’s upcoming IPO. It was a dark cloud that threatened to rain on Facebook’s parade. Indeed, the first weeks after the social networking company stock debuted on Wallstreet, it sunk down quickly and hard. It did not sink as far as a true blue Facebook hater would like it to sink, but it did flirt with the $25 range when initially Facebook’s stock hit an intra-day range of 42-38. General Motors’ move was quite a sobering piece of news, but as we have reported earlier, much of its concerns revolve not on whether advertising on Facebook is a bad idea but on whether it would support a wider array of ad sizes and ad forms. These are two totally different questions.
The first would mean that General Motors has lost all faith on Facebook advertising. Obviously this is not true, because it’s still spending millions of dollars a year on 3rd party agencies to handle its free presence on FB through its fan page; that alone shows that General Motors still sees value in Facebook. With 800million users, an active user base and a huge content consumption rate, it would be hard not to have any faith on Facebook’s ability to deliver eyeballs. The issue is what kind of ads would those eyeballs look at? That’s where Facebook and General Motors had a parting of ways. Still, this led to the misconception that Facebook’s ads are just not effective. Some critics have even likened Facebook’s ads as wall paintings in a café.
According to these critics, people go to cafes to talk to their friends and not to look at the posters on the wall; well, this criticism seems to have some value and thus make a little bit of sense. It really misses the point behind social network advertising. The focus in social network advertising is branding and idea promotion. Old metrics, especially those used for search engines like Google should not be applied to Facebook. Be that as it may, last Tuesday Ford motor company and Coca-Cola, 2 corporate heavy hitters have stepped out and voiced their support for Facebook advertising. They said that they saw value in their ads at Facebook and one of them, Ford Motor Company, announced plans that it would be expanding its use of Facebook for its advertising campaign. There are many ways to interpret this pronouncement but the most obvious is that these are nothing but major endorsements for Facebook’s long-term revenue potential from advertising. Ford’s global marketing Vice President, Jim Farley, said that social media like Facebook is crucial for Ford to improve its image among its potential customers. They see a user “liking” a Ford product on Facebook as an ally in spreading the Ford brand in the offline world.
As we have mentioned here repeatedly, many old-school advertisers dismiss social media marketing because they don’t understand it. Unlike, PPC or Search Engine Marketing, the metric should not be reduced to cost per click or amount of sales generated per click. If you do so, you would be sorely disappointed. The real value of social media is conscious raising and brand awareness. Considering how Coca-Cola and Ford managed their brands through the decades and are top notched global brands, it is well-worth listening to them regarding their impressions on Facebook’s long-term advertisement potential.