> GM spends about $40 million on its Facebook presence. About $10 million of that is paid to Facebook for advertising, the rest covers content created for the site, agencies that manage the content and daily maintenance of GM's pages, people familiar with the figures said.
I admit I've never worked at GM, so if someone can tell me why I'm wrong, please do.
If they were using that additional $10mm to get the 300k followers to begin with, that's an even worse indictment of FB advertising for traditional brands.
That's a factor of 10 more than you were estimating; and that's just based on a quick poll of brands that I took a look at.
Also GM sells a few dozens models of cars, I could easily see the salaries for the staff who do daily updates for all these models and the advertising agencies who manage it costing 30 million or more.
Also GM has annual revenue of almost 160 BILLION, 30 million is a drop in the bucket in their marketing budget.
You'd think so, but apparently not, if they're making a big stink over pulling a $10mil marketing campaign. Apparently, $10mil matters to them.
It could very well include the cost of creation of video content, contest giveaways, promotional prizes and such.
Once you add all that all up, $30 million doesn't seem as far fetched .....
Advertising agency doesn't sell you a great campaign, idea or pretty pictures.
they sell you media. with a HUGE markup.
10mil media can cost way more than 30mil if bought from an agency creating the 'creatives' (in the case of car ads, a picture of the car, or a movie of it cruising on a road where the art director likes to take vacations)
30mil for 10mil of media, GM had a good deal.
The agencies don't get the markup the media buying companies do. They are to the advertising industry what realtors are to the housing market.
Most of the houses have no idea what they are doing, which only works because their clients are even more clueless.
It will change within the next 5 years and the media buying houses will be mostly gone with a few exceptions.
I'm curious what your thoughts are from there? Who does the purchasing?
Don't tell me it's all going RTB or something like that; premium advertising is still how the publishers are going to make money and you really can't automate that.
You are going to need high touch sales presence, bespoke custom executions, etc.
I'm definitely not going to miss the buyers.
And the big agency would go nowhere if it actually had to do the creative work.
and yes, when the client is clueless, there's lot of people in the way making money.