General Motors is pulling ads from Facebook, calling them
“ineffective”, according to a Wall Street
Journal report. It was determined that their ads on the platform “had
little impact on consumers,” according to the report. However, GM will continue
to market via Facebook’s free brand pages.
The article quotes GM marketing chief Joel Ewanick as saying
GM “is definitely reassessing our advertising on Facebook, although the content
is effective and important.” Ewanick’s use of “content” in this case refers to
Facebook brand Pages.
GM spends about $40 million marketing on Facebook, but only
about a quarter goes to advertising- the rest going to creating content for the
site, according to the report. GM spends an estimated $1.8 billion worldwide on
advertising per year.
A Forrester Research Analyst, Nate Elliott, wrote a blog
post on Monday questioning the social network’s advertising. “Somehow
Facebook still hasn’t stumbled upon a model that’s proven consistently
successful for marketers, or that brings in the massive revenues to match the
site’s massive user base,” wrote Elliott. “One global consumer goods company
told us recently that Facebook was getting worse, rather than better, at
helping marketers succeed. And companies in industries from consumer
electronics to financial services tell us they’re no longer sure Facebook is
the best place to dedicate their social marketing budget – a shocking fact
given the site’s dominance among users.”
Facebook posted revenues of $3.7 billion in 2011, the vast
majority of which came from advertising. However, Facebook’s first-quarter
revenues fell from the previous quarter and Facebook’s amended S-1 form, filed
on May 10, cited the transition to mobile as a worrisome sign for ad revenues.
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