The suits at General Motors finally realized what was common knowledge amongst many corporate marketing executives – that advertising on Facebook has very little impact on customers while draining your wallet of cash that could be spent elsewhere for a better return on investments.
Today, General Motors Co, the largest auto maker and the 3rd largest advertiser in the United States announced their plans to stop advertising their products and services on Facebook after the company’s marketing executives determined that their paid ads had little impact on the consumers they were targeting.
This move coming even as Facebook is just a couple of days from going public and as more and more companies are questioning the effectiveness of advertising on the social networking site.
According to people quoted in the WSJ report that broke this story,
General Motors did however state that it will continue to expand its use of marketing through Facebook’s pages, in which brands and companies can display content at no cost.
Considering that General Motors is the 3rd largest advertiser in the US, this move is bound to have some impact on revenues and EPS in the coming quarter after Facebook has gone public.
[ Source: WSJ ]