General Motors has claimed that it will stop advertising on Facebook. Why? Simple – they think Facebook ads just don’t work. The announcement comes at a crucial time as the multi-billion Facebook IPO is all set to rock the stock markets this Friday.
Apparently GM spends around $40 million on Facebook marketing alone out of which $10 million is spent on Facebook ads. Whoa! That is a huge number. Pundits may already be in the process of writing super long blog posts stating this may be the start of Facebook’s end. Alright let’s not exaggerate here.
It’s obvious that advertisers, over the period of time, are going to look for a return on their investment. Placing ads worth millions isn’t really going to work if you’re not ‘doing it right’. I don’t see how GM is calculating sales that come from Facebook users who are enticed to buy GM products after clicking on ads. It isn’t a very straightforward process.