After re-evaluating its Facebook strategy earlier this year, General Motors (GM) have decided that paid advertising on Facebook does little to affect consumers' car purchasing decisions. Therefore, they are planning to stop advertising on the site.
Although GM spends a mere $10 million a year to advertise on Facebook - a fraction of its total 2011 U.S. ad spending of $1.8 billion and only 0.27% of Facebook's $3.7 billion revenue - they are, after all, the third biggest advertiser in all of U.S. across all media. More importantly, this highlights the issue of whether or not advertising on Facebook is effective.
However, GM will continue to maintain a presence on Facebook and promote its products through Facebook as its global registered users of 900 million is considered by many companies as too big to be ignored.
Nevertheless, this shows that Facebook still has some ways to go to convince and prove to marketers that they can convert fan engagement into a genuine money-making opportunity.
Source: The Wall Street Journal