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Are Their Ads Worth It?

Social media is the new big thing for companies looking to expand their branding efforts. But, because social media is such a new marketing platform, there has been some disagreement over time about what social media efforts are effective and which ones don’t provide a reasonable return on investment.

This is why a recent article in Forbes is so interesting.

The background is that General Motors has been spending about $40 million a year on their Facebook marketing strategy. Roughly $30 million of that has been devoted to creating content for Facebook. The other $10 million was spent on ads on Facebook.

GM studied the effects of both types of advertising efforts, and after seeing the analysis made a telling decision – they will no longer buy any ads on Facebook at all. They are completely pulling their $10-million-a-year Facebook advertising campaign.

That doesn’t mean they are giving up on Facebook. They will still be investing $30 million a year on developing content – because they have determined that content does help their marketing efforts. It’s simply the ads that they’ve realized are a waste of money.

GM marketing chief Joel Ewanick said that GM “is definitely reassessing our advertising on Facebook, although the content is effective and important.”

Later, GM issued a statement saying, “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.”

Now obviously, every company and industry is different and so has different expectations from their social media strategies. But when a company as huge as GM runs the numbers and decides that it’s not worth it to spend any money on Facebook advertising at all, that’s a decision that needs to be paid attention to.

It certainly suggests that for most companies, developing interesting social media content is a much better investment of their social media marketing budget than buying the targeted ads that Facebook and other sites are constantly pitching us.  Furthermore, Social Media Syndication can help B2B vendors multiply the return on social media content investments through their networks of channel partners.

This is good news for content marketers, but might be a problem for Facebook. As Jim Kramer recently said about Facebook, “Sell, Sell, Sell”.