Analyzing the Effectiveness of GM's Facebook Advertising Campaign

This report provides a comprehensive analysis of General Motors' Facebook advertising campaign, examining its impact on various business aspects. It delves into the campaign's effectiveness in terms of conversion rates, customer acquisition, and associated costs. The study investigates the tools used for target audience refinement and analyzes the advertisement metrics employed. Furthermore, it explores attribution modeling and its success for Facebook, while also highlighting the challenges of branding on the platform. The report assesses the overall impact of the campaign on Facebook's performance and concludes with a summary of key findings and implications for future advertising strategies. The analysis is based on various sources and provides insights into the complexities of digital marketing in the automotive industry.

Running head: ADVERTISEMENT AND CONTEMPORARY BUSINESS
Advertisement and Contemporary Business
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Table of Contents
Introduction................................................................................................................................2
GM’s advertisement campaign of Facebook..............................................................................2
Impact of the advertisement campaign......................................................................................3
Conversion Rate.....................................................................................................................3
Customer Acquisition.............................................................................................................3
Cost........................................................................................................................................4
Target Audience Refinement Tools.......................................................................................4
Advertisement Metric.................................................................................................................5
Attribution Modeling and its success for Facebook...................................................................5
Challenges of Branding..............................................................................................................6
Affect on Facebook....................................................................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8

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Introduction
As opined by Stephen (2016), the business prospects of an organization are greatly
determined by the kind of advertisement campaigns that are being used by the concerned
organization. Kelly et al. (2015) have articulated the viewpoint that these advertisement
campaigns render valuable services for the organization not only by effective promoting the
products or services offered by them to the customers but at the same time to enhance the
appeal of these products or services as well. In this regard, it can be said that the social media
tools like Facebook, Twitter and others have emerged as one of the major mediums of digital
marketing in the contemporary times (Taiminen & Karjaluoto, 2015). The General Motor’s
advertisement campaign on Facebook is an example of such an advertisement campaign
wherein the campaign was supposed to positively affect the prospects of General Motors.
This case study will undertake an analysis of this advertisement campaign of GM on the basis
of the impact that it had on the organization.
GM’s advertisement campaign of Facebook
General Motors is one of the world’s largest organizations which spend a significant
amount of their revenue on various kinds of advertisement campaigns, particularly the ones
on social media platforms like Facebook and others (Slagen, 2019). As a matter of fact, the
organization on yearly basis spends more than $40 million on its Facebook advertisement
campaigns along with the ones which spends on other social media platforms (Yeomans,
2019). However, in the recent times it is seen that the organization had complained regarding
the effectiveness of the campaign and advertisements of Facebook (Fiegerman, 2019). The
net result of this is that the organization had decided to reduce the amount of capital which it
spends on Facebook for advertisement by more than $10 million (Reuters.com, 2019).

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Impact of the advertisement campaign
Conversion Rate
As opined by Ji, Wang and Zhang (2016), the primary intention of the various
business enterprises behind the usage of different kinds of digital marketing campaigns is to
enhance the customer conversion rate of their organization. However, in the particular
context of GM it is seen that the despite spending such a considerable amount of capital on
the ads on Facebook the customer conversion rate of the organization has not increased in
any substantial manner (Businessinsider.com, 2019). As becomes apparent from the case of
GM, Facebook conversion rate is very low although the website posts various ads for the
organizations which are taking the help of their services (Slagen, 2019). For example, as the
report of GM, the customer base of the organization has increased by only 1.3% despite the
significant amount of capital that it spends on Facebook for advertisement (Yeomans, 2019).
Customer Acquisition
Facebook currently has more than I billion users and the majority of the advertisement
revenue comes from the mobile users (85%) who frequently browse through the ads posted
by the website (Reuters.com, 2019). This is important from the perspective of the
organizations like GM which are placing their ads on the website under discussion since it is
seen that the majority of these users at one point of time or the other approach these
organizations regarding the products or services that they offer (Ago, 2019). This in turn
enables the organizations to acquire new customers who are needed for the growth of their
business.

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Cost
The amount of capital that the organizations need to spend on Facebook for placing
their ads is very high and comparatively higher than the ones that they had to spend on the
other social websites. In this regard, it needs to be said that out of the $300 million that GM
spends on digital marketing it spends more than $40 million of Facebook for advertisement
purposes (Slagen, 2019). More importantly, it is seen that the net revenue generated by
Facebook because of the various advertisement services that it offers to the users had
increased by 37% in the recent times (Reuters.com, 2019).
Target Audience Refinement Tools
In the recent times it is seen that Facebook is taking the help of various kinds of target
audience refinement tools which are intended to improve the customer conversion rate of the
organizations which are taking the help of the advertisement services offered by them. In this
regard, the tool of “behavior targeting” is an important one which enables the website to offer
ads to the users on the basis of their prior search and also post preferences (Yadagiri, Saini &
Sinha, 2015). On the other hand, tool of “Tap, Tap Done” enables the users to subscribe to
the ads of the organization that they are interested and thereby get notifications from them
regarding the products or services offered by them (Kannan, 2017). Another important tool
which is being used by Facebook is “Experiment With Ad Formats” through which the
website creates artistic versions of the original ads which had been developed by the
organizations so as to attract the attention of the customers and also to enhance the appeal of
the ads (Mariani, Di Felice & Mura, 2016). In addition to this, the website currently requests
the organizations to provide a specification of the products or services and also the
demographics as well as the customer base that they are targeting so as to offer the ads to the
relevant sections of the users only (Confos & Davis, 2016).

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Advertisement Metric
Facebook takes the help of different kinds of advertisement metrics like total site
traffic, bounce rate, page value, CPM (cost-per-thousand impressions), clicks and others
(Taiminen & Karjaluoto, 2015). For example, the metric of total site traffic is being used by
the website to measure the number of users who are actually watching the ads placed by the
website when they are browsing through the website (Kelly et al., 2015). Furthermore, the
tool of “click” is being used by the website to calculate the number of users who are actually
clicking on the ads placed by the different organizations on the website (Confos & Davis,
2016). In addition to these, the matrix of “page value” is being used by the website to
calculate the value of the advertisement pages through an analysis of the number of
subscribers that the concerned page has, the number of users who have liked and shared the
ads and others (Stephen, 2016).
Attribution Modeling and its success for Facebook
Mariani, Di Felice and Mura (2016) have articulated the viewpoint that the attribution
model can be defined as the set of rules which “determines how credit for sales and
conversions is assigned to touch-points in conversion paths”. More importantly, the model
takes the help of various kinds of metrics like turnover, profit, customer retention, sales and
others to measure the effect of communication or advertisements on the organizations which
are using it (Kannan, 2017). In particular there are various entities of the process, namely,
social, blog, live chat, email, case study, PPC, demo, pricing page, webimar and others which
help the organizations to benefit from the use of advertisements and also from the model
(Yadagiri, Saini & Sinha, 2015). In this regard, it can be said that the website Facebook has
been able to gain in a significant through the effective usage of this model since it offers the
organizations with the above mentioned attributes so as to get customers who in turn are

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likely to bring more profit to the organizations and also the website. The net result of this is
that Facebook in the recent times has been able to enhance its profitability by more than 37%
and also the organizations which are taking the help of the advertisement services offered by
the website have been able to enhance their revenue (Fiegerman, 2019).
Challenges of Branding
Facebook is an open-forum wherein the users can comment their actual opinions or
experiences regarding the services or the products that they are using or have used in the past.
This often affects the brand image of the organizations since the contemporary customers get
easily influenced by the reviews or the comments given by the other existing or past
customers (Ji, Wang & Zhang, 2016). Thus, it can be said that this is one of the major
challenges that the organizations face while branding their products or services on Facebook.
In addition to this, it is seen that regardless of the actual quality of the products or services
offered by an organization the customers get influenced by the online presence of the
concerned organization and the page that they have created over the website (Mariani, Di
Felice & Mura, 2016). This often creates a false image of the brand and thus can be
considered as another important challenge that the organizations face while branding their
products or services on Facebook. More importantly, the increasing number of organizations
which are using Facebook for advertisement has enhanced the level of competition and
thereby act as another challenge for the organizations for branding (Stephen, 2016).
Affect on Facebook
The challenges that the different organizations related to the branding of their
products or services over Facebook are likely to adversely affect the prospects of the website
moving forward. In this regard, it can be said that the different organizations are reducing the
amount of capital that they are spending on Facebook for advertisement purposes (Confos &

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Davis, 2016). For example, GM has reduced the amount of capital that they spend on
Facebook for advertisement by more than $10 million (Fiegerman, 2019). Thus, it can be said
that this is likely to adversely affect the revenue earned by Facebook since a major part of the
revenue earned by the website used to come from online advertisements.
Conclusion
To conclude, social media platforms like Facebook and others have emerged as one of
the major platforms for advertising the products or services offered by an organization. They
not only help the organizations to reach out to a much larger customer base but at the same
time enhance the amount of profit earned by them as well. However, in the recent times it is
seen that there are various challenges that the organizations are facing related to the branding
of the products or services offered by them. This in turn has not only reduced the
effectiveness of these social platforms but at the same time the amount of revenue generated
by them through advertisement.

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References
Ago, G. (2019). GM Returns to Facebook Advertising After Public Split a Year Ago.
Retrieved from http://www.adageindia.in/digital/gm-returns-to-facebook-advertising-
after-public-split-a-year-ago/articleshow/45862735.cms
Businessinsider.com, (2019).Attention Facebook Investors: This GM Ad Cancellation Is Big,
Bad News. Retrieved from https://www.businessinsider.com/attention-facebook-
investors-this-gm-ad-cancellation-is-big-bad-news-2012-5?IR=T
Confos, N., & Davis, T. (2016). Young consumer-brand relationship building potential using
digital marketing. European Journal of Marketing, 50(11), 1993-2017.
Fiegerman, S. (2019). 5 years after rocky IPO, Facebook is stronger than ever. Retrieved
from https://money.cnn.com/2017/05/18/technology/facebook-ipo-anniversary/
index.html
Ji, W., Wang, X., & Zhang, D. (2016, October). A probabilistic multi-touch attribution model
for online advertising. In Proceedings of the 25th ACM International on Conference
on Information and Knowledge Management (pp. 1373-1382). ACM.
Kannan, P. K. (2017). Digital marketing: A framework, review and research
agenda. International Journal of Research in Marketing, 34(1), 22-45.
Kelly, B., Vandevijvere, S., Freeman, B., & Jenkin, G. (2015). New media but same old
tricks: food marketing to children in the digital age. Current obesity reports, 4(1), 37-
45.

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Mariani, M. M., Di Felice, M., & Mura, M. (2016). Facebook as a destination marketing tool:
Evidence from Italian regional Destination Management Organizations. Tourism
Management, 54, 321-343.
Reuters.com, (2019). Facebook boosts IPO size by 25 percent, could top $16 billion.
Retrieved from https://www.reuters.com/article/us-facebook-shares-
idUSBRE84F02320120516
Slagen, D. (2019). Who's REALLY at Fault for GM's Facebook Ad Failure?.
Blog.hubspot.com. Retrieved from
https://blog.hubspot.com/blog/tabid/6307/bid/32910/Who-s-REALLY-at-Fault-for-
GM-s-Facebook-Ad-Failure.aspx
Stephen, A. T. (2016). The role of digital and social media marketing in consumer
behavior. Current Opinion in Psychology, 10, 17-21.
Taiminen, H. M., & Karjaluoto, H. (2015). The usage of digital marketing channels in
SMEs. Journal of Small Business and Enterprise Development, 22(4), 633-651.
Yadagiri, M. M., Saini, S. K., & Sinha, R. (2015, November). A non-parametric approach to
the multi-channel attribution problem. In International Conference on Web
Information Systems Engineering (pp. 338-352). Springer, Cham.
Yeomans, M. (2019). Why GM pulling ads from Facebook is good for social media
communication. Retrieved from
https://www.theguardian.com/sustainable-business/facebook-general-motors-
advertising-ipo-social-media