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What? GM Suspends Advertising with Facebook?!
Breaking news from the automotive industry announced that GM has stopped investing in ad space on Facebook. Now, don’t get that confused with GM abandoning its Facebook Fanpage. According to the Wall Street Journal, GM’s auto marketing chief, Joel Ewanick, said the following:
“[GM] is definitely reassessing our advertising on Facebook, although the content is effective and important.” Mr. Ewanick has spent the last year restructuring the Detroit company’s marketing operations in an effort to cut billions of dollars in costs.”
GM spent about $10 million last year advertising on Facebook, which was a small fraction of its entire advertising budget. Don’t worry, GM still plans on spending an estimated $30 million on content creation on Facebook from various advertising agencies.
Why Did GM Suspend Facebook Advertising
It sounds as if the $30 million is a drop in the bucket in an estimated $1.8 billion advertising budget (just for the U.S. alone), right? But, automotive and powersports dealers want to know why they did this. So, let’s look at a bit deeper at the situation.
According to this article by Search Engine Journal, it seems three key instruments might have stopped GM from throwing its money away on Facebook advertisements:
- Ad Performance: Click through rates on Facebook ads are 10x lower than Google Display Ads, and 2x lower than your average Internet Banner ads
- Ad Formats: Facebook has very few advertising formats
- Ad Targeting Options: No mobile support
It sounds like GM decided to stop throwing good money after bad money and focus advertising dollars elsewhere. Where that is, the execs at GM haven’t revealed yet. But if you see a fancy new 3D commercial shot in space, we could take an educated guess…
Does Facebook Advertising Have Enough Viewers For Me to Sell Cars?
Automotive and powersport dealership advertising on Facebook is still a crucial and beneficial way to market your inventory and drum up business. There are over 845 million monthly active users, and it is pretty easy to go viral on Facebook. But other ad networks and other techniques such as organic SEO may prove to be more beneficial.
Does This Mean You Should Stop Advertising on Facebook?
No, not at all. Just because GM decided to doesn’t mean you won’t (or already do) have success. A lot of the key principles to being successful with Facebook advertising depends on your market and how you are marketing yourself to your immediate audience. But the key is getting your product in front of the correct people to drum up leads and sales. Check out this three part blog for more information on social media advertising for automotive and powersport dealerships and how to break through the myths of social media.
OK – I Still Want to Use Facebook BUT Spend as Little as Possible
You don’t need to spend like GM to have successful results online. In fact, aligning your online marketing is the most beneficial way to get prospective buyers in front of your inventory. There are so many places that your target audience is looking for you… but have you found them? Think outside the box and check out places like Craigslist and Backpage that are high traffic and the best part… FREE. And when do you take advantage of social media for advertising your inventory online, make sure it is targeted!
How Can I Benefit?
Does your automotive dealership software allow you to incorporate your social media strategy and target the marketplaces online your customers are looking for you? There are many software applications out there, but not all of them seamlessly work with your dealership management software (DMS) to help you get “free advertising”. LotVantage can help you with your car dealership’s online marketing and helping you get more leads and sales.
Speak with one of our internet experts and allow them to show you the industry’s best kept secret successful automotive dealers are using today to get more leads and more sales right now! Over 5,000 dealers cannot be wrong… and with a stellar support staff and no long term contract, how could you afford NOT to succeed with LotVantage?
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The U.S. auto industry had one heck of a year in 2009. Nearly every automaker in the United States struggled to stay afloat and sales plummeted thanks mostly to the recession. December, however, did bring some good news as the industry continued it’s slow rise out of the pits. While shoppers’ enthusiasm is still below pre-crises levels there was a slight uptick in auto sales during the last month of ’09.
The annualized rate of U.S. auto sales went up to 11.2 million, which is up from 9.1 million at the end of 2008 but still far below the 16 million it was before the economy bottomed out. Like Jessica Caldwell, senior analyst at Edmunds.com, said, “It’s not even growth, really — it’s more like stabilization”.
Some U.S. automakers are being hit much harder than others. Of course, GM and Chrysler have been the two most negatively impacted by the recession. Chrysler’s December sales were down 4% from last December and annual sales were down 36% for 2009. General Motors, which is now largely owned by the United States Government, saw December sales drop 6% below December ’08 levels. GM’s annual sales were also down 30% from 2008. For GM, those drops can be attributed to a reduction in fleet sales, a drop in spending for consumer incentives, and the decision to close the Pontiac and Saturn brands. Thanks to the U.S. Government’s bailouts of these two automakers and a $3 Billion Cash For Clunkers program auto sales were able to somewhat stabilize.
China, meanwhile, surged and has nearly matched the U.S. as the largest auto market.
The brightest spot for the U.S. auto industry has been the performance of Ford, which did not take any government bailout money. Ford’s annual sales were down from 2008 but December sales were up 33% from the same month in ’08. The company’s stock has also surged to over $11 per share, up from just over $1 a share in early 2009.
Some people project that the number of cars scrapped in 2009 was higher than the number of new cars sold. This number wouldn’t be inflated by Cash For Clunkers because each clunker was traded for a new car. Public transportation in the United States has become more heavily relied upon as a result. Although there may be a slight shift away from personal transportation to public transportation, John DeCicco, a University of Michigan lecturer and former senior fellow at the Environmental Defense Fund, believes the U.S. is far from ending it’s love affair with the automobile.
General Motors began an experiment in July that had dealers posting new cars for sale on eBay. The project ends today, and although cars didn’t fly off the lot as a result, the move peaked plenty of interest.
GM and eBay said the program, which was limited to California, was useful in helping determine whether auctions would work on a nationwide basis. The online auctions were credited with generating 1.5 million page views and 15,000 sales leads for dealers.
According to GM, about 95% of its California dealers participated in the program, which required little of them other than that they upload inventory information and guarantee availability of the vehicles listed for auction.
Although the auctions will cease after today, GM said it was not closing the door on the online auction format for good. Its dealers will continue to sell certified pre-owned cars on EBay, as do dealers for Ford, Audi, Lexus, Toyota and Mercedes.
In addition, GM’s spokesman John McDonald said the automaker would consider posting new cars for sale online again in the future, perhaps as early as next year.
George Peterson, president of marketing consulting firm AutoPacific, believes that Internet sales will play a larger part in the new-car distribution chain.
(Psst – George, we knew this already!)