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American car manufacturers and social media advertising

Recently, a consulting firm from Virginia that specializes in advertising, made a forecast related to the advertising spending for the American car making industry. They projected that the industry will increase spending for advertising by about fourteen percent this year, with around forty percent of that going towards digital media.

At odds, apparently, with this forecast is the even more recent news that General Motors is going to stop advertising on Facebook due to not seeing as big of an impact on sales as they were expecting from the endeavor.

GM’s marketing chief talked to the Wall Street Journal and said that they are in the process of reassessing their advertising on Facebook, even though the content is effective and important. By content the marketing chief was referring to the free Facebook page, which is used to promote their products without any additional costs.

Further on in the article it is revealed that GM has started the process of reassessing their Facebook advertising costs earlier in the year after the company’s marketing team started questioning the effectiveness of the Facebook ads. A meeting was held with Facebook managers in an attempt to alleviate the concerns of the marketing executives of GM, however they left the meeting feeling unconvinced.

Contrasting with this decision is that coming from Subaru America, who has increased their commitment for ad spending on Facebook to almost five million dollars, their chief marketing officer planning to play the long haul game, saying that “half the US population is on Facebook, you have to work it to learn it”.

However GM have spent double that, last year, as their Facebook advertising budget, though one has to keep in mind that their total advertising budget amounts to almost US$1.8 billion, just to keep things into perspective.

With Facebook’s first public offering of shares about to start on Friday, the decision from GM will surely raise doubts about the social networking site’s ability to maintain the 88 percent revenue growth it managed in 2011.

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