Facebook Gets Thrown to the Curb by GM
Facebook will finally go public tomorrow, making many millionaires in the process. CEO and founder Mark Zuckerberg will reportedly buy Greece early next week.
A few days ago, rust-belt-based General Motors crashed the party when reports surfaced that it was reviewing Facebook as an advertising outlet. Is this another example of how an old-line company just doesn’t understand the ways of the left-coast-driven brave new digital world?
Perhaps, but in truth GM had a more basic problem. Their Facebook ad campaigns, as designed, didn’t convert as well as other options (like Google). The other issue that surfaced in the initial Wall Street Journal article (which is paywalled) is that of GM’s total $40 million Facebook-directed spend, only $10 million went to Facebook, and the rest to media firms designing and managing the campaigns.
Nice work if you can get it.
For the record, Mr. Zuckerberg reportedly drives an Acura, and at least on one occasion was using a Chevrolet Suburban for a special event:
This all would be easy to dismiss if not for the fact that GM spent $1.78 billion on ads globally in 2011; other reports put total marketing spend in the $3-5 billion range in recent years. The $10 million spent directly on Facebook is peanuts to them, and probably will be to Mark Zuckerberg by the time NASDAQ closes tomorrow. (In other news from the Bizarro World that is the U.S. economy, California apparently has a $16 billion budget deficit and Michigan had a surplus in 2011 and projects one this year.)
Many in-house lawyers are trying to figure out how to balance social media presence with proper policies and privacy protections. Law firms are being told to get more savvy social media-wise. Facebook is probably not the first place for lawyers to start, and many of them will spend more time trying to understand what their kids are doing and posting about that will be locked in Facebook servers for decades, possibly appearing next to ads.
Facebook is an amazing story, and it looks like they have played the IPO game about as well as new registrant can. They boosted the initial pricing range of FB this week, which may allow them to walk the IPO tightrope of not leaving too much on the table, while allowing for enough of a first-day “pop” to make new shareholders feel like friending Mr. Zuckerberg for a while longer.