Everything We Know About Why GM Was Forced Back To Advertising On Facebook

Only 11 months after GM very publicly announced that it was pulling its $10 million ad budget off of Facebook — practically on the eve of Facebook‘s IPO — the car company is back on the social media site.
Last May, a GM source told the WSJ that paid ads had little impact when it came to customers buying cars. Less than a year later, an email statement from Chevrolet marketing VP Chris Perry says, “Today, Chevrolet is launching an industry-first ‘mobile-only’ pilot campaign for the Chevrolet Sonic that utilizes newly available targeting and measurement capabilities on Facebook.”
Reports from last year indicate that Facebook executives had urged GM to do more free media on its brand page, rather than paid, before the company left.
Former CMO Joel Ewanick helmed the Facebook exodus. At the time, he was doing an overhaul on all of GM’s advertising and marketing strategies.
But Ewanick and GM parted ways in July — two months after the headline-making decision was announced — and return to paid Facebook advertising (with an undisclosed budget) is coming months later.
This begs the question: Why now?
While there hasn’t been an explanation from GM on why it is returning to paid advertising at this point in time, and the hiatus wasn’t discussed in the statement, both companies confirmed that this has been in the works for the past year.
Facebook released a statement that, “We’ve had an ongoing dialogue with GM over the last 12 months and are pleased to have them back as an advertiser on Facebook. We look forward to working even more closely with GM in the coming weeks and months.”
The NYTimes reports, “According to Ryndee Carney, a spokeswoman at General Motors in Detroit, General Motors ‘worked closely with Facebook’ on the idea for the test campaign, which was presented to ‘the Chevrolet digital team, Carat and Commonwealth.’”
With the talks going on for the last year, the decision to get back on Facebook could have been one of Goodby, Silverstein & Partners last huzzahs. Goodby handled Chevrolet’s U.S. business at Commonwealth, although we suspected that there would be agency changes after Ewanick was ousted. GM decided to let McCann take control over Commonwealth, which had been a joint venture, and Goodby packed up the Detroit office last month.
For GM and Facebook, looks like after a dramatic year, everyone is back to playing nice. Or figuring out a subtle way to make a graceful return.
While last year’s bad PR might outweigh the good of this announcement, GM’s return, particularly to Facebook’s expanding mobile initiatives, is helpful to the social media company.
A new report by market researcher IDC says that Facebook, Twitter, Pandora, and The Weather Channel are giving big ad networks like Google and Millennial Media a run for their money, making up 52 percent of U.S. mobile display ad spending.
Facebook made $234 million in mobile revenue in the U.S. last year and is constantly working on it’s mobile strategy, which makes sense considering that 60 percent of Facebook’s 1.1 billion users were using the social network on mobile devices in Q4 2012. And who knows what the Facebook phone will bring to the company’s mobile advertising strategy.
Last year, Facebook may have been an option. This year even the most skeptical clients are being forced to admit that spending on the network is justified.
GM claims that it is testing its ads on mobile devices only. While that is the growing market, it seems kind of ridiculous to continue shunning Facebook’s desktop ads. We suspect that in a few months, GM ads will begin to trickle onto all available screens.
SEE ALSO: These Texts Cost A Top Hearst Executive His Job >

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