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GM Says Facebook Ads Don't Work, Pulls $10 Million Account
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(Image credit: AFP/Getty Images via @daylife)
Just days before Facebook’s historic stock offering, General Motors said it plans to stop advertising on the social media site, concluding that its paid ads don’t have a big impact on consumers.
GM spends about $40 million a year on Facebook marketing, according to the Wall Street Journal, about $10 million of which is for paid advertisements. It will continue to post relevant content about the company and its brands on GM’s Facebook pages.
GM marketing chief Joel Ewanick told the Journal that GM “is definitely reassessing our advertising on Facebook, although the content is effective and important.”
Why GM Yanked Its Facebook Ads On Eve Of IPO Joann MullerForbes Staff
Are Facebook's Ads Or GM's Products The Problem? Micheline MaynardContributor
In a statement, GM said: “We regularly review our overall media spend and make adjustments as needed. This happens as a regular course of business and it’s not unusual for us to move our spending around various media outlets – especially with the growth of multiple social and digital media outlets.
“In terms of Facebook specifically, while we currently do not plan to continue with advertising, we remain committed to an aggressive content strategy through all of our products and brands, as it continues to be a very effective tool for engaging with our customers.”
GM has been re-evaluating much of its advertising strategy over the past year, consolidating its global advertising and media-buying agencies in a bid to cut $2 billion from its marketing budget while improving the efficiency of its advertising.
The Journal, citing people familiar with GM’s thinking, said the carmaker began to question the effectiveness of its Facebook ads earlier this year and GM marketing executives, including Ewanick, met with Facebook managers to address their concerns but remained unconvinced that advertising on the website made sense.
The news comes at an awkward time for Facebook, whose $105 billion IPO is scheduled for Friday.
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