General Motors Announces It Will No Longer Advertise On Facebook
General Motors feels their Facebook advertisements have a small effect on its consumers, so the company has decided to stop Facebook advertising, even though the social network is going public soon.
The recent decision by GM, the third-largest American advertiser, identifies the first major crack in the strategy of Facebook, and reinforces doubts that advertising on social media performs better than using traditional media outlets.
Internet and media analyst at the Pivotal Research Group, Brian Wieser, says that this draws the attention to what has been argued by experts – the riskiness of the Facebook business model.
Wieser also said that it is not a sure thing, and it definitely looks as though it will be one of the most substantial ad-supported dominions, but it is not assured since there will be some marketers who face the challenge of proving the efficiency of this type of marketing technique.
Presently, these issues don’t appear to be hindering investor demand, as Facebook is increasing its offer by 25% to raise around $15 billion.
GM said it will continue to have pages on Facebook, which are free to create, and have no fees attached, to market its vehicles; and also stated that it isn’t unusual for the company to transfer advertising monies to different types of media outlets.
GM said that while they won’t be advertising on Facebook, they remain committed to an aggressive content strategy via their brands and products because it is an effective tool for the company to engage with its consumers.
Facebook had no comment on the latest decision of General Motors.
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Posted by Mark Bastian
on May 16 2012. Filed under Business.
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