General Motors has decided to pull out all of its ads on Facebook due to their ineffectiveness, according to a report on The Wall Street Journal. Reuters said that the report has been confirmed by a GM spokesman. GM makes this move just a few days before the scheduled initial public offering of Facebook on Friday that’s likely to value the company at almost $100 billion.
However, the free Facebook pages will still be used by GM for its marketing. GM marketing chief Joel Ewanick said that GM is re-evaluating its advertising on Facebook even if the content is “effective and important," according to The Wall Street Journal’s report. All aspects of Facebook’s marketing cost around $40 million to maintain.
Of this figure, about $10 million are paid ads on Facebook. The Journal said that GM started to reassess advertising on Facebook early this year. A meeting recently took place between Ewanick and other members of GM's marketing team but GM wasn’t convinced to continue with the ads.
Advertising Age, an affiliate of Automotive News, revealed that GM used up about $2.8 billion in U.S. advertising while it spends $3.9 billion globally. This means that it is the fourth highest spender for global ads in 2010, behind Procter & Gamble Co., Unilever and L’ Oréal. The data for 2011 aren’t available yet.