GM Drops Facebook Ads: What Does This Mean for Fundraising?

With a $100+ billion IPO on the horizon, there’s a lot of buzz about Facebook this week. So, when General Motors announced they’re dropping their $10 million worth of Facebook advertising, it was sure to cause a stir. So what does this mean for all us fundraisers who’ve dumped time, resources, and (in some cases) money into the social networking giant?! While a major advertiser bowing out is not good news for Facebook’s revenue stream, it has little to do with the overall effectiveness of using the social network for donor acquisition and engagement. Remember, we have plenty of stats that prove Facebook’s value for fundraising. That said, asking why GM backed out of its Facebook advertising is an important question.

According to this cnet.com post on the story, GM spends roughly $40 million on all its Facebook initiatives. Only a quarter of that goes to ad sales. The rest? Content development, conversation management, and application development are likely some of the areas that receive GM’s Facebook budget. And according to GM’s spokespeople, those activities are here to stay, because “the content is effective and important”. In other words, GM still thinks Facebook is an incredibly valuable space …just not the best place to invest their advertising dollars when they can make connections and form relationships with potential car buyers without having to pay for the space in addition to their production and management costs.

Nothing about the news of GM dropping their Facebook advertising is surprising to me. For many years now, I’ve been preaching the importance of EARNING support from your constituents via social networks, not BUYING that support. Advertising is an attempt at the latter, whereas good content, authentic engagement, and quality customer service are what is required to earn that support. (This is not to say that creative advertising isn’t effective. In the right medium, it absolutely is. But maybe not on Facebook)

GM’s advertising announcement is, at the very least, a poorly-timed bit of news for Facebook. In the long run, it could signal a shift in how the company brings in revenue. But for those of us communication managers out there, it’s just a sign of what many of us already know  – we operate in a new world where transparency, authenticity, and quality content are far more valuable than a slick ad buy.

For more on how online and social media can enhance your fundraising operation, visit BWF.com.

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