General Motors, which reportedly spends close to $40 million on Facebook, had recently said that it will stop advertising on Facebook, saying that Facebook's ads had little impact on consumers. The decision by GM marks the first highly visible crack in Facebook's strategy and underscores doubts about whether advertising on Facebook works better than traditional media.
In an official media statement, P Balendran, Vice President, General Motors India, said, “We regularly review our overall media spend and make adjustments as needed. This happens as a regular course of business and it's not unusual for us to move our spending around various media outlets – especially with the growth of multiple social and digital media outlets.”
India Digital Review quizzed some social media experts in the country to understand whether Facebook Ads are really not effective enough in garnering public responses for the brand?
Pradeep Chopra, CEO and Co-founder, Digital Vidya, India’s premiere social media training workshops, was of the view that the ROI of Facebook Ads can significantly vary based on the effectiveness of the execution. “In our experience, a number of brands are not being able to leverage Facebook Ads to its true potential due to their inability to understand and execute FB Ad campaigns. For example, even today, a large number of brands don’t know the criticality of optimizing the CTR (Click Through Rate) of an Ad on Facebook,” said Chopra.
Yashraj Vakil, Chief Operating Officer, Red Digital was of the opinion that GM’s decision in withdrawing Facebook Ads is a part of their revamp of media practices. “GM not only has withdrawn from FB, but also have withdrawn from advertising in SuperBowl this year. Besides, GM’s Facebook has so many fans that it quite becomes irrelevant for them to push paid ads on the same platform. I feel GM would be spending more in making its content on the page more engaging with the users,” opined Vakil.
Deepak Goel, Founder and CEO, Drizzlin, a social media agency, said that just a response to the GM directive Ford issued a statement saying that FB ads have really "worked" for them. “This is a very specific opinion based on the business, their objectives and what they're looking for. Overall I agree that it is early days for brands to see whether they can make business sense of FB. For the large part I don't see brands gaining an enormous business value just from FB at the moment. This is exactly why we never interpret social media as platforms,” added Goel.
Presenting the advertiser’s perspective, Karthi Marshan, Head, Group Marketing, Kotak Mahindra Bank, said, “We have run a handful of campaigns so far on Facebook, and a number of Kotak verticals manage interactions with specific interest groups via focused FB pages. On these, the goals we have set ourselves have been matched and breached, I am happy to say.
According to Pradeep Chopra of Digital Vidya, effectiveness depends a lot on the category of the brand. “B2C brands are likely to get more value than B2B brands. Similarly brand categories, which are more Entertaining or Social in nature are likely to perform better given the nature of the platform. At the same time, it doesn’t mean that B2B brands can’t get value through FB Ad Campaigns. For example, we do generate leads for our Corporate Social Media/Digital Marketing Workshops through Facebook Ad Campaigns,” he opined."
“Of all the parameters, creative of an Ad on Facebook most determines the CTR percentage. Thus, they are very critical. We always recommend that an advertiser should run multiple copies of an Ad on Facebook with varying creatives. Ever shrinking attention span is the major reason why visuals (especially Images) are gaining importance as we want to read less and less,” added Chopra.
Karthi Marshan of Kotak was of the view that effectiveness is first a function of the objective, then the target audience’s availability and attention, and to an extent it could be a function of the category as well. “Obviously, utility sector firms like energy, telecom and banks may find it harder to get engagement than fashion, liquor and leisure goods sectors,” Marshan opined.
“I must say I find a few things about this story’s telling itself interesting. First, the choice of timing for such a story to be written, in the same week as the Facebook IPO. Second, I think the facts need to be seen in perspective. As reported, GM’s spend on paid advertising on Facebook accounts for 0.5% (one half of one percent) of their total budget. When the average marketer takes a decision to move around a few bucks in his budgets here and there, is it really so noteworthy? The last time I moved large swathes of my budgets from one medium to another, I wasn’t staring down a dozen mikes and TV crews outside my office,” Karthi Marshan added.
Speaking on whether it is contradictory for a brand to have a free fan page and also host paid ads on Facebook, Stressing on the content part posted on a Facebook page, Yashraj Vakil said, “It is not contradictory because most of the advertisers post ads promoting their Facebook fan pages and not any external website. Now, Irrespective of whatever content a brand posts on Facebook, only 16% of its fans actually see it. Considering this, we may say that both can co-exist. We might also see Facebook making fan pages a paid exercise, which would then ascertain that brands pay more importance to their fan pages."
Speaking on whether Indian brands might also follow suit, Pradeep Chopra opined that this decision of GM shouldn’t make significant impact on other brands’ decisions towards Facebook Advertising. “I do believe that this will and should raise questions about Facebook Ads among other brands. At the same time, I am sure that many brands will end up becoming more educated and effective in leveraging Facebook Ads,” said Chopra.
Speaking on the same, Karthi Marshan said, “I think you’d agree that the days when Indian brands sought cues for their decisions from their peers due West are long gone. Today, India is a case study goldmine in category after category, since we are one of the handful of growth markets left in the world. We now dance to our own distinctive tune when it comes to marketing decisions, and I am sure we will decide where to spend our money based primarily on our own experiences. Yes, one thing is likely to happen. All the marketers who have been taking the ostrich approach (let’s just ignore social media, it will go away on its own) or the deer in the headlights one (OMG, its rushing towards me, I have no idea what to do) will quite probably use the GM factoid as ammo to postpone engaging with this medium even longer. And this is true as much in the West as it is here.”
