Tuesday, May 15, 2012

The Era of the Integrated Commercial

UPDATE: NPR reports on a New Orleans pizza joint experimenting with advertising on Facebook. Their net? Lots of new Facebook fans and one $10 order for pizza, directly linked to a Facebook ad. Their outlay? $240.

The news has been whispered about the internet for a long time now, but with GM’s announcement today, it’ll be shouted a lot louder: Advertising on the Internet – at least advertising in the form it’s had for the last century – is dead.

Not that the Internet has been around for a century – but advertising in the form of little boxes just dumped haphazardly in papers, magazines and on that new-fangled Internet-thingy – certainly has been.

Now GM, which spends about $40 million on its Facebook presence according to Reuters, is going to pull the plug on its paid advertising to the tune of about $10 million.

That leaves me to wondering – where did the other $30 million go?

Oh yeah. To ad agencies and warm bodies and such in charge of the company’s Facebook presence, which the company seems to believe for now is still a good investment of its advertising dollar. No matter that Facebook pages can be created for free. They’re a billion-dollar company; they have to spend the mazuma in order to think they’re getting good value.

Of course, to say advertising is dead based on this deal is silly. GM, per Reuters, spent $1.1 billion on advertising just in the US last year, including $271 million on online display and search advertising – excluding the $10 million it dropped on Facebook. But what does this say for advertising on social media? It doesn’t bode well – or does it?

Content may indeed become king.

Here’s what GM says about its Facebook presence:
In terms of Facebook specifically, while we currently do not plan to continue with advertising, we remain committed to an aggressive content strategy through all of our products and brands, as it continues to be a very effective tool for engaging with our customers.
Advertisers may not be interested much longer in paying for inconsequential ads on social media sites – or elsewhere on the Internet for that matter – instead opting to become part of the fabric of social media itself.

Maybe we’re headed back to the era of the integrated commercial:

As a long-time fan of old time radio, I'm used to the integrated commercial. It's odd to see Granny Clampett in such a thing, but it harks back to an era that's not all that distant.  With strictly advertising dollars doing nothing for companies -- Google itself says only 1 in 1,000 people on the net today will click on a traditional advertisement -- the integrated commerical -- as opposed to company websites and such -- will likely continue to gain importance. We may indeed see nimbler companies giving up on their own websites altogether and just concentrating their efforts on social media platforms -- whicha re not going to trend away any time soon, if you ask me.

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