Show Me the Return On Investment

It was a pretty big deal when GM announced, the night before the Facebook IPO, that it was pulling it’s Facebook advertising.

Reports then surged that Facebook ads don’t work. They said it spelled the doom for the imminent IPO for Facebook.

The timing certainly was unfortunate.

Many reports, however, didn’t mention that GM also cut back on it’s Superbowl advertising and sponsorship of the Manchester United soccer club; that it needed to cut $2 billlion over five years.

A month later, GM, in discussions with Facebook executives, will reconsider the Facebook ad buy if they can show a  return on investment.

There’s nothing irregular about that – we all need to show a return on marketing expenses.

There are a few good pieces of news here.

Part of the problem GM states is Facebook doesn’t provide enough analytics for them to track and measure their efforts. Facebook has agreed to make improvements. This means better access for all advertisers since they won’t provide special treatment to GM.

If GM does reinvest in Facebook and move forward with a new campaign, it will provide an interesting case study for the rest of the automotive industry. Some argue they just didn’t understand how to execute a social advertising campaign and were stuck in the traditional ad model.

The beauty of Facebook ads, if done properly, is that they can be extremely targeted. All that privacy stuff users complain about all the time is for a reason. Facebook wants your data, so the advertisers can reach you with relevant ads.

But let’s step back to the bigger picture, and the need to show ROI on marketing.

Technology really allows marketers and CEO’s to more closely track the effectiveness of the marketing spend. The marketing department or agency is hopefully dong this for you by providing details analytics dashboards showing results from campaigns tied back to sales.

More than likely, you’re in business to grow a business, and if your efforts can’t be tracked and measured for effectiveness, then how will you know what’s working and what isn’t?

Your strategy drives the goals, and the goals determine the tactics. In other words, all of your tactics should be tied to business goals; not to the next shiny thing because it’s new and shiny.

If something isn’t working, you’ll make the decision to refine and improve or cut altogether.

In a statement, GM said:

“We regularly review our overall media spend and make adjustments as needed. This happens as a regular course of business and it’s not unusual for us to move our spending around various media outlets – especially with the growth of multiple social and digital media outlets.”

Good data gives the executives something to work from in order to determine if the spend is working or not. Don’t provide good data, and the campaign is likely to be cut when push comes to shove.

Like a house renovation project, a marketing plan is never finished. Constant upgrades will be made over the life cycle of the organization. Facebook will do well to improve it’s analytics. They’ll need to in order to make their case to C-suites worldwide.

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  1. [...] Social Media Strategy: Build It and Get out of the Way Digg DiggEarlier this week, we talked about GM announcing, on the eve of the Facebook IPO that they are pulling their Facebook ads . Their argument being that they weren’t seeing a return on [...]