GM pulls ads from Facebook

2012-05-16 14:46
As Facebook CEO Mark Zuckerberg touts the social network's IPO, General Motors announced that it was pulling Facebook advertising. (Paul Sakuma, AP)

As Facebook CEO Mark Zuckerberg touts the social network's IPO, General Motors announced that it was pulling Facebook advertising. (Paul Sakuma, AP)

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

New York - General Motors confirmed that it is pulling its advertising from Facebook because it determined paid ads had little impact on consumers.

GM had been spending about $10m on paid advertising and $30m on unpaid marketing on Facebook.

"We are reassessing our Facebook advertising, but we remain committed to very aggressive social media strategies and will continue to push content on Facebook through our product and brand Facebook pages," said GM spokesperson Patrick Morrissey.

The news comes at a bad time for Facebook, which is expected to launch an initial public stock offering on Friday valuing the social networking site at around $100bn.

GM's pullback comes as other marketers are questioning the value of paid ads on Facebook despite the vast amounts of time huge numbers of consumers spend on the site.

Improvement needed

The auto giant is the third largest advertiser in the US with expenditures of $1.8bn in 2011, according to Kantar Media.

It will continue to expand its use of unpaid marketing such as the creation and management of content on the Facebook pages of its brands and cars, according to Morrissey.

While Facebook and Google both have broad reach, ads posted at the search giant's websites are 10 times more likely to be clicked than those at the social network, according to online marketing specialty company WordStream.

WordStream gave Google top grades for performance of its display ad network while it found Facebook in need of improvement.

"So far, Facebook's advertising platform hasn't kept pace with the explosive growth of its social network, and it remains to be seen if CEO Mark Zuckerberg even wants to focus on advertising as a source of revenue," said WordStream chief technical officer Larry Kim.

"In his 2 500-plus word letter to [prospective] shareholders this month, he mentioned advertising just once."

Google offers twice as many advertising formats as Facebook, including ads in videos and mobile games, according to WordStream.

"The comparison suggests that Google currently offers advertisers more value in terms of both options and results for advertisers, and that Facebook has a lot of catching up to do," WordStream said.

Facebook has yet to support advertising on smartphones or tablet computers that have become popular social networking tools, and has more limited ad targeting options than Google, the analysis concluded.

"As good as Facebook has been at evolving to serve consumers, that's how bad it's been at serving marketers," Forrester analysts Nate Elliott and Melissa Parrish said in a blog post.

"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."

Facebook shortcomings at making money appeared not to be dousing passion for owning the company's stock.

Facebook on Tuesday raised the price range of shares to $34 to $38 in a move that could value it at more than $100bn when it starts trading on the Nasdaq exchange.
- SAPA
Read more on:    google  |  facebook  |  social networks
NEXT ON NEWS24X
SHARE:

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
6 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
/News
 

Sexiest Instagrams of 2014

Check out some of the sexiest celebrity Instagrams of 2014!

 
 

I love summer.24

Joburg hot spots for cocktails, craft beer, tapas and wine!
Summer Survey!
Great ideas for the best summer sandwiches!
Christmas lingerie to make this festive season the best one ever!

Jobs in Cape Town [change area]

Jobs in Western Cape region

Area Manager - Retail

Western Cape
Evolve Personnel
R20 000 - R25 000 Per Month

upply Chain Manager

Western Cape
ZIMCO Group (PTY) Ltd
R30 000 - R40 000 Per Month

Restaurant Manager

Western Cape
SET Recruitment Consultants
R20 000 - R30 000 Per Month

Property [change area]

Travel - Look, Book, Go!

Kalahari.com - shop online today

Grand Theft Auto 5

Now available on PS4, Xbox One and PC from R649. Buy now!

Festive gifts!

Check out our awesome range of festive gifts to make everyone’s wishes come true. Shop now!

Save on Samsung

Cameras, mobile phones, TVs, Tablets and more. While stocks last. Shop now!

Save up to R2200 on electronics! – As seen in the catalogue

Wishing for tech gadgets this festive? Save up to R2100 on hot tech products at kalahari.com. While stocks last. Shop now!

30% off the bestselling books

Save big on the most captivating reads of 2014. While stocks last. Shop now!

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

Horoscopes
Aquarius
Aquarius

The energy today is serious, materialistic and hardworking. You may find you get a new outlook on things and you may want to spend...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.