Joann Muller, the Detroit bureau chief at Forbes reported the awkward announcement that General Motors is pulling it's advertising from Facebook. Awkward in that, the news comes days before Facebook's $105 billion IPO scheduled for Friday.
In a statement, GM 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.
“In terms of Facebook specifically, while we currently do not plan to continue with advertising, we remain committed to an aggressive content strategy through all of our products and brands, as it continues to be a very effective tool for engaging with our customers.”
According to the Wall Street Journal, GM spends about $40 million a year on Facebook marketing, about $10 million of which is for paid advertisements. It will continue to post relevant content about the company and its brands on GM’s Facebook pages.
The timing, it seems, was purely coincidental. “There was no planned release,” said GM spokesman Pat Morrissey. “It’s not like we planned to wait for the week of their IPO to put this out.”
GM marketing chief Joel Ewanick told WSJ that GM “is definitely reassessing our advertising on Facebook, although the content is effective and important.”
The Journalsaid the carmaker began to question the effectiveness of its Facebook ads earlier this year and GM marketing executives met with Facebook managers to address their concerns but remained unconvinced that advertising on the website made sense.
Former Detroit bureau chief for The New York Times, Micheline Maynard, blogged on Forbes the question as to whether the issue is really with the effectiveness of Facebook or the GM offering this model year. Facebook is an especially popular social media tool with baby boom, Generation X and Generation Y women, who make up both the prize portion of the car market, and Facebook’s user base. Micheline points out that women, in particular have been ignoring all domestic vehicles (with the exception of the Jeep Compass).
With the Chevy Sonic in particular, GM is trying to attract millenials and has turned to MTV for marketing help. Facebook would seem the logical companion outlet.
Amy Chozick wrote an article in the New York Times back in late March that explained how "G.M. hired John McFarland, a 31-year-old marketing executive who previously worked at Procter & Gamble, to oversee the company’s MTV-ification. Mr. McFarland said it had been a challenge to prove to his bosses that young consumers had money to spend ($170 billion in buying power, according to the market research firm comScore), and did not just rely on their parents.
“There’s been a lot of pessimism in the auto industry towards this generation,” said Mr. McFarland over a plate of brisket at Slows Bar BQ in Detroit’s Corktown district.
But signs of change are there. On a recent Tuesday morning in the General Motors Technical Center, which was designed by Eero Saarinen, a couple of car executives huddled around a “persona board” in the color and trim laboratory.
They studied a collage loaded with images of hip products like headphones created by Dr. Dre, a tablet computer and a chunky watch. The board inspired new Chevrolet colors, like “techno pink,” “lemonade” and “denim,” aimed at “a 23-year-old who shops at H&M and Target and listens to Wale with Beats headphones,” said Rebecca Waldmeir, a color and trim designer for Chevrolet. This rainbow of youthful hues will be available on the Spark this summer.
Still, any turnaround will not be quick. Car designs have around a three-year lead time. The paint has to dry (colors are baked in the Arizona desert for a year before they are approved and introduced to consumers). And the car industry, from assembly line to union to smooth-talking dealer, revolves around a powerful and entrenched culture.
It is also unlikely that G.M. will adopt some of Scratch’s advice. After installing “secret shoppers” at select nationwide Chevrolet dealerships, Scratch recommended that salespeople abandon the hard sell and that the traditional system, based on commissions, be reimagined. Young buyers, they realized, are used to the Apple store, where salespeople do not push products. (Joel Ewanick, G.M.’s global chief marketing officer, said the automaker was training dealers on how to adapt to young car buyers.)
“We tried to teach dealers how to calibrate conversations,” Mr. Martin said. “Stop trying to be cool and give them the fist pump. They can tell you don’t get it.”
Amy also interviewed Ross Martin, the vp of MTV Scratch, who told her that many young consumers today just do not care that much about cars.
That is a major shift from the days when the car stood at the center of youth culture and wheels served as the ultimate gateway to freedom and independence. Young drivers proudly parked Impalas at a drive-in movie theater, lusted over cherry red Camaros as the ultimate sign of rebellion or saved up for a Volkswagen Beetle on which to splash bumper stickers and peace signs. Today Facebook, Twitter and text messaging allow teenagers and 20-somethings to connect without wheels. High gas prices and environmental concerns don’t help matters.
“They think of a car as a giant bummer,” said Mr. Martin.
I believe General Motors when they say the ads are not working and I agree with them that keeping the brand pages on Facebook remain extremely valuable. The ads are a needless extra expense for models Facebook users are not interested in. That said, here's My Advice to GM:
1. This is when GM should look at it's own history for help and recognize that the original concept and approach of how Saturn's were first sold should be employed with this demographic. Car seller's need to take their proper cues from social media marketing and remember that this is the generation where pull is far more effective than push. Removing the ads is a good first step.
2. The truth is that GM models remain boring. Although almost as generic, comparable models from Asian competitors are still less expensive and ever so slightly more stylish. (Example: an equipped Hyundai Veloster actual selling price remains less than an equipped Sonic) GM needs it's own break-out model or model that is unique in space. I would offer for unique...GM has lacked a small 4x4 since ending it's Suzuki built Tracker line. Imagine the interest that would be generated by a diesel-powered mini-SUV getting close to 50 miles a gallon.
For consumers born from 1981 to 2000 — that would be a “millennials” game-changer. Actually, it would be an industry game-changer.. Have the Opel guys design it and market it with an Opel logo... make Opel your millennial brand... it will make up for having kept Buick around instead of Pontiac.
3. Which is already part of #2, but bears repeating. Use the still existing, but U.S. absent, Opel brand to bring in consumers that just refuse a Chevy or a Buick moniker on their vehicle. You need a "cool" brand and Chevy and Buick are not and won't be anytime soon.
3. Which is already part of #2, but bears repeating. Use the still existing, but U.S. absent, Opel brand to bring in consumers that just refuse a Chevy or a Buick moniker on their vehicle. You need a "cool" brand and Chevy and Buick are not and won't be anytime soon.
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