General Motors Reconciles with Facebook, Funds Mobile-Only Ad Campaign

In the annals of sticking it to business partners, GM's decision to announce it was no longer advertising with Facebook a few days prior to Facebook's IPO has to rank as one of the most egregious.

Retrospective analyses suggest that there were some personal issues between GM's now departed Chief Marketing Officer and Facebook. These contributed to the 'misunderstanding' between the two companies and led to attempted power play/contretemps that so embarrassed Facebook - and did GM no favors either.

The new deal is focused on mobile, where Facebook has concentrated more of its recent efforts (including the introduction of its own phone) and on more traditional models as opposed to the 'social advertising' that so many businesses have found difficult to monetize.

It is apparent that GM believes its brands have to be on Facebook but that it needs to better understand how to convert interest, affinity and even approval into sales. The auto company is turning around in the face of stiff global competition but has to figure out how to maintain its momentum - and where social media contributes to that effort. Facebook, meanwhile, still needs to prove that its billion friends are good for something other than posting funny photos and sappy sentiments. The company has to prove it can generate revenue to justify its stock price and the hype that has always accompanied its promise.

The two companies would seem desperately to need each other. If this collaboration is successful they can help validate each other's models, literally and figuratively. Now they need to prove it. JL

Cotton Delo reports in Advertising Age:

Eleven months after a very public divorce, General Motors is reconciling with Facebook.
GM has confirmed to Ad Age that it is back in the fold as a Facebook advertiser. Thus ends a bizarre chapter in which GM, the second-largest U.S. marketer publicly eschewed the social network's ad products three days before its hotly anticipated initial public offering. Paid advertising makes up the lion's share of Facebook revenue.^*
"Chevrolet is testing a number of mobile-advertising solutions, including Facebook, as part of its 'Find New Roads' campaign," said Chris Perry, VP-U.S. Chevrolet marketing. "Today, Chevrolet is launching an industry-first, 'mobile-only' pilot campaign for the Chevrolet Sonic that utilizes newly available targeting and measurement capabilities on Facebook."
The automaker didn't explain why it's returning to Facebook ads now, why it waited so long after the July dismissal of former CMO Joel Ewanick, who was instrumental in the decision to stop advertising on the social network, or how much it plans to spend on Facebook ads. (GM reportedly spent around $10 million on Facebook ads in 2011 -- pocket change out of the $3.1 billion it spent domestically that year, according to the Ad Age DataCenter.)
What's clear is that GM is returning to Facebook ads despite not getting its way. Ad Age reported last May that GM's decision to withdraw came after a meeting between Mr. Ewanick, other top GM marketing brass and Facebook sales executives in which the automaker asked if could run bigger, higher-impact ads than what had been available.
Facebook has since introduced its ad exchange, FBX, and has shifted its focus from social ads to more traditional web-advertising models, such as re-targeting. It still, however, offers nothing like a home-page takeover (apart from the log-out ad).
"We've had an ongoing dialogue with GM over the last 12 months and are pleased to have them back as an advertiser on Facebook. We look forward to working even more closely with GM in the coming weeks and months," Facebook said in a statement.