GM drops Facebook ads days before IPO

General Motors announced plans to stop advertising on Facebook Tuesday, just days before shares in the social media giant are set to hit the open market. Executives at the auto making giant just aren’t convinced the ads work, according to the Wall Street Journal, which—though I’m not an expert on the subject—seems like a pretty good reason not to spend money on something.

GM plans to continue pouring money into its Facebook presence, but only through “content” (branded pages, etc) as opposed to paid advertising. The move comes at an unfortunate time for Facebook, which is set for an initial public offering with a valuation of up to US $104 billion dollars Friday. From the WSJ:

Although GM’s $10 million worth of ad spend on Facebook won’t impact its $3.7 billion in revenue, the move is a disappointing development for the social network and could hurt if more big advertisers choose to follow suit.

GM’s pull back comes as marketers are increasingly questioning paid advertising on Facebook. Some advertisers said they find it very difficult measure the effectiveness of Facebook ads.

 




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GM drops Facebook ads days before IPO

  1. Well, yeah, we saw this coming. I’m just surprised more companies haven’t stopped spending on Facebook. It’s easy enough to have a robust presence there without paying for ads (that don’t work). What’s scary is what Facebook will have to do next to appease disappointed advertisers in order to appease expectant shareholders. It’s really the beginning of the end for Facebook…
    http://mankabros.com/blogs/onmedea/2012/01/27/facebook-and-the-disappearing-valuation/

    • I agree. What’s happening with MySpace these days, and how easy will it be for us all to have a massive ‘move over there’ day?.

  2. There are ads on Facebook? Can’t say I’ve ever noticed even a one.

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