Just as Facebook was about to float for a $100bn valuation, the net buzzed with news that General Motors (GM) decided to pull all of its Facebook ads because they don’t deliver sales. Facebook bashers might use that as a reason to tear holes in Facebook’s valuation but it is more likely an indication of the divide between what marketing people think social media is and what it actually is.
For many businesses, advertising is about sales. You pay money to be noticed by people who then come and pay you some money. The problem with that model is that social media thrives on a different mindset.
A Marketing Sherpa study showed that 78% of marketers want to generate high quality leads, compared with 44% who want high volume leads. Advertising on Facebook allows you to target a specific type of person, but if your aim is to advertise on Facebook the same way you advertise on Google Adwords, you are perhaps missing the point.
A high value purchase like a car relies on many factors – what have leading automotive journalists said about the car? What are the running costs? What do friends and family think about a specific model? What’s the warranty like and the after-sales service?
If someone clicks on a Facebook ad for a GM car and then goes to buy the car, the chances are that the customer has already made their decision based on a wide range of other research. The brand awareness is strong and they are already in buyer mode when they click on the ad. For most other people clicking on the advert, perhaps it was the first time they had seen the car and the click was their first step to a whole range of research.
In the same Marketing Sherpa study (in PDF form here), only 10% of business to business companies said their sales cycle is one month or less. That’s the time it takes from initial enquiry to a sale. A third (30%) said the cycle is 1-3 months but 50% said it’s between four and twelve months.
What does this tell us about the news of GM saying Facebook advertising doesn’t work? It tells us that Facebook and other social networks can work if they are used in the right way. Social networking is about engagement and conversation – about brand awareness and interaction. It’s about standing in the stream rather than trying to divert the waters. Be seen, engage, ensure potential customers find what they need so that, when they are ready to buy, they know where to come and they are willing to come to you.
While some companies can advertise products that sell on Facebook, for many, advertising is about buying visibility more than buying sales. Get your sales team and your marketing team working together and find ways to measure brand perception on social media rather than looking for the same ROI models that work for offline adertising.