Score one for engagement.
The recent news that GM plans to halt spending on roughly $10 million in annual Facebook advertising is certainly bad news from Facebook’s point of view, especially since it came during the lead up to their IPO. But long term, this trend will be a win for users and brands.
If you read the headlines about this story, it seems as though GM has decided Facebook is not the right platform for the company to be connecting with consumers – but this couldn’t be further from the truth. GM has stated they will continue to invest heavily in content on the platform, which is key when it comes to connecting with consumers.
While display advertising is key to Facebook’s business, it is clear Facebook realizes that the most successful marketing on the site comes in the form of engaging content – not display ads. To see this, you only need to look as far as Facebook Studio, a site Facebook created to, “celebrate the agencies and marketers that are driving business growth through real connections and authentic conversations made possible with Facebook” [emphasis mine]. Doesn’t exactly scream “display campaign”.
That being said, display still has a place on Facebook. And as noted by Scott Monty at Ford (who plans to continue investing in display on Facebook), display ads can be very effective if they are highly targeted and combined with a great content campaign. If they don’t meet those two criteria, you’re throwing your money away.
The move announced by GM yesterday is a signal for the future of online marketing. GM has embraced the fact that engagement is key to success on Facebook. Users on Facebook are there to interact with the people and brands they care about – they won’t be wooed with traditional display ads. GM isn’t the first brand to realize this, and they definitely won’t be the last.