GM took a decision to withdraw its advertising budgets from Facebook. Coming as it did, just a couple of days prior to Facebook's IPO, this caused a big stir and also posed questions on whether Facebook revenues are sustainable. This presentation by Sanjay Mehta, Joint CEO, Social Wavelength, examines the issue.

1. GM withdraws Facebook ads
Understanding the impact – for other advertisers,
investors (into Facebook) and for all of us!
- Sanjay Mehta, Joint CEO, Social
Wavelength

2. The News on the “Street”
 General Motors pulls out its
advertising spend on Facebook
 Used to spend $10 million a year
on Facebookadvertisements; will
continue to engage fans on
Facebook

3. Some Questions Raised
How does
advertising on
Facebook and
Google compare?
Will it impact the How will
Facebook IPO? Facebook be
affected, if at
all?
Why did
General Motors Is Facebook’s
announce this 2 advertising
days before model really
Facebook’s ineffective, as
long-awaited General
IPO? Motors
stated?

4. First of all, the Timing…
Can it be just a coincidence?!
GM pulls
outFacebook Facebook’s IPO
Ads

5. Speed-breaker for
Facebook IPO??
 Enough other brands continue to
swear by Facebook
 GM will still have a budget of $30 mn
towards Facebook, though not of
advertising kind
 GM’s ad spend was a tiny fraction of
Facebook’s total ad revenues
 Large pent-up demand for Facebook
paper


6. Marketing Mix is the ideal way
 A brand would ideally distribute
spends across Facebook, Google and
other digital spaces
 As much as in fact, it would spread
across traditional media, PR, and
digital
 Yet, let’s compare the fundamental
Google vsFacebook options in

7. Facebook ads vs Google
ads
 A very fundamental difference
 Google is largely keyword contextual;
hence has a transactional sense to it
 Facebook, on the other hand, is profile
focused; hence more prospect centric
 Due to this difference, the two are
relevant differently, on the basis of the
point of consumer’s buying journey
being targeted

8. Google Ads – a keyword
approach
Keyword
(As-required
activity)
Search results
based on keyword
used
 Keyword contextual approach
 Users presented with results that
contain keywords (s)hespecified
 Ads relevant to those keywords show
up

9. Google Ads - Example
 Say, GM has a special deal running on
SUVs
 So GM can buy Google ads around
words like “SUV” etc.
 An interested user searches for “best
deals on SUVs” or similar terms
 GM’s ads show up, for this interested

10. Google ads – how they show
up
Ads

11. FacebookAds – a Profile
approach
Profile Info
(One time
activity)
Relevant Ads
based on user
info
 Profile contextual approach
 Users presented with ads based on
their interests as mentioned on their
profiles

12. Facebook Ads - Example
 A Facebook user lists “Hybrid Cars” as
one of his/her interests
 In addition, the user also specifies
his/her other details such as age,
education, location etc. in the profile
details
 Now if GM is launching a new hybrid,
and wants to showcase it to interested
users, GM can choose relevant
profiles and put Facebook ads for the

13. Targetting Profiles on
Facebook

14. Hence, it’s all about “where” in
the buying journey, is the
consumer? to reach a Hybrid Car
 If GM wanted
enthusiast to make him aware of their
new hybrid launch, Facebook would
have been a perfect tool – all about
bringing the brand into the
consideration framework of the buyer
 On the other hand, if GM wanted to
reach a buyer, close to deciding on
purchase, and looking for deals, then
Google would have been better – a
point-of-sale kind of approach

15. So what do we understand
then?
 GM is still investing into content,
community, engagements etc. on
Facebook: foolhardy for any brand to ignore
Facebook
 In order to get a consumer to purchase, a
brand needs to get into consideration set;
Facebookads work well for that purpose
 While search is transactional interest, one’s
profile is more permanent; so to reach a
target audience with a certain profile, is
almost a must-have for brands - Facebook
works perfectly for that
 In short, no panic for Facebook or for
Facebook investors, due to the isolated GM
decision

16. Facebook ads clarfications
 What was discussed so far was a simplistic
use of Facebook ads – other options exist
too
 Many brands use Facebook ads to build a
community for the brand (“likes” on the
Facebook brand page); once in place, the
brand can keep communicating to them at
no cost!
 Subtler ad options from Facebook, e.g.
Sponsored Stories, say. Combines benefits
of ads and a testimonial from known
source!
 Facebook ad options also, to reach a
brand’s own community in a more impactful
manner

17. Conclusion
 More and more brands are
investing increasing amount of
time and budgets on their
Facebook presence and reaping
benefits, too
 Itwill not be surprising if General
Motors comes back to advertising
of Facebookbythe end of this

18. THANK YOU
Sanjay Mehta (Twitter: @sm63)
Joint CEO, Social Wavelength
Mumbai, India.