GM expands social media marketing strategy…and sees sales up

GM Next

GM is one of the few automobile giants who has enthusiastically adopted social media as part of their marketing strategy. And now GM sales are reported to be up, while other auto companies like Ford and Toyota are reporting drops in sales. Is there a connection?

First GM blog launched in 2005

General Motors was an early adopter of blogging and social media with their first blog, Fastlane, launched in January 2005. The goals of the blog were to:

  • Develop a fast way to reach out to and hear from customers, and attract significant web traffic.
  • Help GM overcome its lumbering-dinosaur image, and close the gap between customers’ outdated perceptions of GM quality and the improving quality of new cars and trucks.
  • Attract other blogs and web sites to link to the FastLane blog

(source: Council of Public Relations Firms )

Fastlane is written by none other than GM Vice Chairman Bob Lutz, making GM the first major corporation to feature posts from a senior executive.

Wait a second; am I saying that GM, the old clunky American auto company is actually progressive? Until recently nobody would call GM trendy, but that perception is changing, and it could have a lot to do with the direction communication channels they have with their community.

Second GM Community Site launched 2008

Recently GM launched its second major social media initiative, a new website called GMNext. The GMNext blog is built on the WordPress Open Source blogging platform, and users can collaborate on the site by uploading photos, videos, and more. Here’s how GM presents this new site:

Over the next year, General Motors will celebrate the start of its second century through GMnext, a dialogue-based campaign that engages people via social media and interactive experiences. As a platform to showcase GM’s commitment to transportation solutions employing technologies that are relevant to consumer needs, GMnext will demonstrate our focus on solutions to the challenges that will shape the future of transportation.

Aren’t they just wasting their time?

Why would a global corporation like GM “waste” it’s time with social media? After all, social media is very difficult to calculate direct ROI for, and the big guys like to see concrete results that they can measure on paper for their investments. Well, here’s a list of the benefits GM gets from their social media marketing strategy:

  1. Bob Lutz says he receives better consumer intelligence from reading the comments on his blog than those from traditional market research channels, like surveys and focus groups.
  2. Forrester compared the results of GM’s Fastlane blog to those of a focus group, and since a focus group costs about $15,000 a month, which works out to $180,000 each year, GM has achieved similar results via their blog, and saved itself $180,000 in cash per year.
  3. Creating a sense of cooperation and interest in clients and the community. Beth Lowery, GM’s environmental and technology officer, said that GM is trying to engage their customers one car at a time. Internet experience and excitement is created from the driving experience.
  4. Transparency: The company is also much more transparent about its design process, making its challenges and hopes open. Lowery says transparency is engaging suppliers and customers alike, bringing them into the process. (From Social Media Explorer)
  5. Increases chances of reaching younger buyers:
  6. Automotive analysts said the strategy of involving customers and potential customers in the online forum is a smart move, particularly for reaching younger buyers.

    “If they’re going to grow their market share, they’re going to need to bring in the younger buyers, who are buying imports because their parents bought imports,” said Joseph Phillippi of AutoTrends Consulting. “This is a big step in the right direction.” (From freep.com)

  7. Profit? Increase of 2.6% in sales compared with January last year.

GM’s social media strategy is working because they are creating an entire user experience, both on and off the web, and are not depending solely on their online presence. They are making efforts to ensure that their cars match the online experience they describe, and that excited GM owners can join the growing GM community.

Ford succeeds…and then fail at social media

One other auto company that is jumping on the social media bandwagon, albeit more slowly and a little shakily, is Ford. Ford recently released their first social media release. A social media release is an evolving structure that is aimed at becoming the modern answer to the ancient format of the conventional press release. It includes “social” elements that are updated, and that users can break apart and use as they see fit, such as flickr photos, de.licio.us tags, etc.

Unfortunately, a few weeks later Ford’s lawyers did a very unsocial thing and stopped some of their most exuberant fans from printing up a fan calendar with photos of their own Ford cars in it.

“The folks at BMC (Black Mustang Club) automotive forum wanted to put together a calendar featuring members’ cars, and print it through CafePress. Photos were submitted, the layout was set, and… CafePress notifies the site admin that pictures of Ford cars cannot be printed. Not just Ford logos, not just Mustang logos, the car -as a whole- is a Ford trademark and its image can’t be reproduced without permission. So even though Ford has a lineup of enthusiasts who want to show off their Ford cars, the company is bent on alienating them. ‘Them’ being some of the most loyal owners and future buyers that they have. Or rather, that they had, because many have decided that they will not be doing business with Ford again if this matter isn’t resolved.” (From BoingBoing – read more there)

As Todd Defren over at PRSquared put it, “Ford pulled the spark-plug right outta their hearts.”

“It’s not as if the BMC effort was draining revenue from Ford’s coffers,” he continues. “If anything, any revenues resulting from calendar sales would help sustain a Ford Fan Club!”

The struggle of the social revolution

GM and Ford are interesting examples since they are from industries that are traditionally not considered hi-tech. They are also examples of big corporations trying to get a grasp of the new reality of social media. GM, as an early adopter, seems to have understood early on that the traditional control over the customer that they were used to is slipping out of their hands. Instead of resisting, they more or less embraced the new medium and reached out to their customers, and I think we can see real results in their sales reports.

Ford is trying to join the new web, but the above incident with the over-zealous lawyers is a speed-bump of an attempt to retain control. They’ll get the hang of it, and it will be interesting to see how other businesses, both big and small, add social media to their marketing basket.

(I recently experienced a Ford-like episode with a pretty big company that produces one of the world’s most successful Open Source platforms. You can read about it and the resulting comments here.)

Update March 20, 2008: GM announces that it will dedicate half of its $3 billion budget to digital and one-to-one marketing in the next three years. GM will invest in several online methods including gaming, search, mobile and a broad array of interactive applications. See this article for more information.

Responses (2)

Jason Falls

February 4, 2008 4:50 pm

Well done piece! And thanks for pointing to the post Geoff and I combined to write. It is an interesting juxtaposition on the two automakers. I also hear Toyota is starting to play in social media as well. It’s an exciting time for the companies and the consumers.

Amar Patel

February 18, 2008 10:03 am

Interesting post, and good to see a large corp getting into social media in an authentic frame of mind.

Though I wonder how an increase of 2.6% in sales compared with January last year was attributed to this social media strategy. This would be really interesting to see.

Thanks again.

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