Days before Facebook’s IPO, General Motors announced that they were pulling advertising from Facebook. If I didn’t know any better, I would think it was a matter of an established company attempting to stick it to the newest young Turk. We may never know how much the pulling of around $40 million advertising dollars annually affected the IPO, but it certainly was bad buzz at the wrong time. And, we certainly may never know what the real story was that led to GM’s pulling out of Facebook advertising. With AdAge reporting an action that may seem to counter GM’s position that Facebook ads were ineffective, and instead felt a little like the kid who wouldn’t play nice, so the other picked up all his toys and left. Either way, the gamesmanship between Facebook and General Motors points to the fact that all is not what meets the eye when it comes to media and business.
The latest stems from the “understanding” that GM had asked for a larger ad unit – a page takeover that is the norm on publisher sites, but not on Facebook – and upon being denied, GM decided to take their business away. Facebook has been known to not really make it harder for advertisers to insert themselves in the platform, but to certainly not make it easy. Facebook CEO, Mark Zuckerberg, has made it clear since the beginning that he is more interested in providing a better user experience than a disruptive one that might bring more money. If the purported meeting did take place the way it has been written about – nobody from Facebook or GM will say anything on the record – it seems that GM might have gone in there to start a fight.
Much the same way that you have to decipher which politician is spewing BS or which athlete is just talking trash to spark his teammates or get under the skin of an opponent, the same has to be done here. I’ve represented a number of clients in trying to get more of presence on a publishers site within a media campaign and you know what you can push for and you know what you can’t. Ultimately, it depends on how much the media is worth to you or your company. If the media is really effective, you might push for more, but also realize that what you’ve got is solid as it is and anything else would be gravy. If you have the enormous spending history that would allow you to push harder form something like GM supposedly did, then there’s no problem with that. I just don’t know that, in the case where the existing media is effective and you push for more but don’t get it, you would just drop out like GM did. That’s why I think it was a mixture of both.
If this new spin is emanating from Facebook to soften the blow of the loss of such a large advertiser, it is deflecting from the point that the existing units and programs just may not have been effective for the advertiser. It’s easy to understand why they would drop on account of the ROI not being strong enough. We might never know if the ROI was strong and they were just doing a hard press to get that larger full-page breakthrough.
Regardless of whether Facebook is a publisher or a platform – or whether their offerings should be like anyone else’s – this is just one example of the new challenges that Facebook will see as they really start having to be one of the big boys.
If the ROI was strong and GM used the timing of the IPO to try to force Facebook’s hand, then there was a solid example of gamesmanship that Facebook seems to have lost – and will hopefully learn from.