GM Yanks Facebook Ad Spend: Cluelessness, Bad Analytics or Strategic Statement?
While growth in the United States has slowed tremendously for Facebook (flat to slightly down in the last quarter through end of March 2012), a three-year trend is instructive. During the time from April 1st 2009 to April 1st 2012, Facebook added over 96 million users in the United States (+161%). The optimal growth rate of course is for Brazil with 10879% growth from only 402k to over 43.7 million! Here are the overall figures: http://optim.al/facebook-3-year-growth-rates-2009-to-2012-by-country/
Social networking statistics show that Facebook penetration in United States is 50.72% compared to the country’s population and 65.77% in relation to number of Internet users. The total number of FB users in United States is reaching 157348340 and grew by more than 1366880 in the last 6 months.
User Age distribution on Facebook in United States
United States Facebook demographics show that the largest age group is currently 18 – 24 followed by the users in the age of 25 – 34.
Male/Female User Ratio on Facebook in United States
There are 45% male users and 55% female users in United States,
Facebook under-indexes in visit share from the most affluent income group. With that said, Facebook’s size more than makes up the difference; the site wins 499,949,430 visits from the most affluent income group versus YouTube’s 223,732,591 visits and Twitter’s 15,166,795 visits.
- Facebook does not address GM target audience in as large a way as other websites:-Facebook is an especially popular social media tool with baby boom, Generation X and Generation Y women, who make up both the prize portion of the car market, and Facebook’s user base. However, statistics show these women are giving a cold shoulder to GM products. In the 10 most popular car brands with women customers, according to TrueCar.com. There was not a single GM vehicle among them. By contrast, four of the 10 most popular vehicles with men were from GM.
- Facebook paid ads are less effective than paid ads on other websites: – GM dropped its Facebook ads because they were less effective than other options such as Google’s AdSense, the sources said. Facebook’s ads garner about half the clicks per page view, a measure of effectiveness, compared with the average website.
Facebook’s “click-through rate”, also known as “clicks per page view,” is half the average for ads on the Internet, according to Larry Kim, founder and chief technology officer of Internet ad consultant Wordstream.
Moreover, Facebook’s ad prices were expected to rise after the company’s IPO. Ad prices are set in auction and vary depending on the target audience.
- GM is using a ‘test’ approach:- Sources said GM’s decision was not permanent and the Detroit automaker could buy Facebook ads in the future. GM can compare the effect of not having ads on Facebook (test) with the business scenario when they were using ads on Facebook.
A closer look at numbers does help us conclude on business scenarios, and make effective decisions.