Howsoever big Facebook is becoming, General Motors feel that paid advertisements on the social website do not pay off and do not impact users’ car purchases. GM is one of the biggest advertisers in USA and this brings to light the underlying issue, “Whether Facebook Ads help sell the companies more products”
This announcement comes just a few days before Facebook is scheduled to put an Initial Public Offering that could value the company at as much as a $104 billion firm. However, GM will continue to advertise and promote its products on Facebook pages, which are free.
GM spent approximately $10 million on Facebook ads which is a small fraction of a total spend of $1.8 billion the company invested in US in 2011. In 2011 Facebook had total revenues of $3.7 billion in 2011 majority of which were ad-related sales.
Source: Wall Street Journal