GM pulls $10 million Facebook ad campaign – for the wrong reason

Three days before Facebook’s scheduled May 18, $100+ billion IPO, Government Motors announced they were pulling the plug on their $10 million Facebook advertising buy (but leaving their content on free Facebook pages).

It took GM’s crack marketing team the better part of this year to figure it out, but finally, “executives determined their paid ads had little impact on consumers.”

Following the example of their largest stockholder’s CEO (the president of the United States, that is), the too-big-to-fail auto manufacturer has found plenty of causes besides itself to blame its failures on.

But to paraphrase Shakespeare, the fault, dear Brutus, lies not in their media selection, but in their ads.

Your results may vary

“The question with Facebook and many of the social media sites is, ‘What are we getting for our dollars?'” says Michael Sprague, Kia North America’s marketing vice president. “[I]f a consumer sees my ad, does that ultimately lead to a…sale?”

The answer varies wildly from one advertiser to another.

When Ford switched its 2011 Explorer advertising from Super Bowl television spots to Facebook ads, shopping activity jumped 104% (compared to an average 14% bump in the wake of a Super Bowl commercial).

But when Pepsi scrapped its Super Bowl schedule for an online”Refresh” campaign, they rocketed themselves from the number-two brand in the soft drink category (behind Coke) to number three (behind Coke and Diet Coke).

Working with comScore and Nielsen since last year, Facebook has been studying which factors make paid Facebook ads succeed and which make them fail. In June, they’ll present their complete findings to the American Research Foundation conference.

Too bad Government Motors didn’t stick around long enough to find out.

Because the study reveals some common mistakes advertisers make, and some best practices they shun, when advertising on Facebook.

Wrong metrics lead to wrong objectives

Advertisers have traditionally used direct-response-type metrics to evaluate Facebook ads’ effectiveness: cost per click, click-through percentage (0.1% is good, 0.5% great), click-to-connection ratio (“connections” being likes, event RSVPs, app installations), and cost per connection.

That may be okay for direct-response Facebook ads, but when was the last time anyone in Richmond clicked a facebook ad to order a $39,145 Chevy Volt online — even with a government rebate?

Clicks, likes and even connections are not marketing objectives in and of themselves — a fact that advertisers are starting to catch on to.

“Clients, for the very first time, are starting to question the measurement issue,” says Martin Sorrell, CEO of WPP, the world’s largest advertising holding company.

A May report from research firm eMarketer agrees with him. “While measuring followers and Facebook ‘likes’ provides marketers with a hard number,” it states, “no one yet knows how those numbers translate into a quantifiable return for brands.”

Ad makers vs. button-pushers

The Facebook study took the audacious, perhaps outrageous, step of talking to people who actually know something about advertising.

First, they talked with marketers to define six elements that make ads work. (See below.)

Then, they asked some 109 advertising people to score each of almost 400 premium-engagement ads (the ones down the right column of the Facebook page) on each of those elements.

Finally, they looked for correlations between those ratings and Nielsen Brand Effects measurements of brand recall and purchase consideration.

You’ll never guess what they found.

Successful Facebook ads work like ads

The ads that scored the highest on the dinosaur criteria (instead of the usual button-pusher ones too many online ads follow) were significatly more successful in changing minds and selling products.

In fact, meeting those criteria made ads perform 20 to 25% better, according to Scott Bruich, Facebook’s head of platforms and standards.

Who woulda thought it?

Six elements of success

Especially due to severe size limitations, those premium-engagement ads work like outdoor billboards along the highway. People have only a few seconds to look, so you’ve got to communicate quickly, cleanly and meaningfully — just as a good ad in traditional media does:

  1. Will anyone notice it? Before consumers can be persuaded by an ad, or even read it, they have to see that it’s there. That doesn’t mean garish colors, starbursts or tons of exclamation points. As with newspaper ads, it does mean a clean, clear look that stands out against the small, gray type areas and visual jumble of the rest of the page.
  2. Does the eye have something to focus on? Too many online advertisers try to cram as many things as possible into one small image — like tiny renderings of many products.  Others compound the error by making those images low-resolution (even by Internet standards) and fuzzing them up with busy backgrounds.
  3. Does anyone know who’s advertising? Can anyone see your brand name and logo? Do the overall look and feel match those of your advertising in other media? One high performer in the Facebook study “was a big-brand ad containing both the tagline and a [link to a] new…television commercial. The creative looked as though it could have been ripped from a TV or print ad. [emphasis added]”
  4. Is your message clear? As with an outdoor board or a 30-second television spot, people can absorb only one message in their short time with your ad. So state it clearly. Successful ads “tended to be pretty clear,” Bruich noted. “[T]here wasn’t an overload of information.” Which brings us to the next criterion.
  5. Did you keep it short and sweet? Successful highway billboard headlines are seven to ten words long, maximum. Your Facebook ad’s headline should follow suit. Your body copy, if any, should either live in another window or make its point briefly and get out.
  6. Are you talking to your audience or yourself? “For purchase consideration,” Ad Age reports, “…one element proved particularly crucial: Does the ad reward the viewer?” Reward in this context doesn’t mean the usual freebies, coupons, games, contests or Crazy Eddie come-ons that too many online ads use to bribe (or maybe con) consumers into reading them. It does mean an informational or emotional appeal that helps your audience members satisfy one of their wants, solve one of their problems, in the context of their lives, not your product’s. Even online, consumers are giving you the most valuable commodity they have — their time. You need to make it worth their while. That’s the difference between making an ad — whether on Facebook, in the Times Dispatch or on Channel 6 — sucessful or ignored.