GM stops advertising on social site
Source: Agencies |
May 17, 2012, Thursday
|
Print Edition
Print Edition
GENERAL Motors Co said on Tuesday it will stop advertising on Facebook, even as the social networking website prepares to go public.
A source familiar with the matter disclosed that the automaker had decided Facebook's ads had little impact on consumers.
The decision by GM, the third-largest advertiser in the US, marks the first highly visible crack in Facebook's strategy and underscores doubts about whether advertising on Facebook works better than traditional media.
"This does highlight what we are arguing is the riskiness of the overall Facebook business model," said Brian Wieser, Internet and media analyst at Pivotal Research Group.
"It is not a sure thing. It sure looks likely that it will be one of the most important ad-supported media properties, but it's not certain because there will be marketers who are challenged to prove the effectiveness of the marketing vehicle."
GM said it will still have Facebook pages, which cost nothing to create and for which it pays no fees, to market its vehicles and added that it is not unusual for it to move spending around various media outlets.
A source familiar with the matter disclosed that the automaker had decided Facebook's ads had little impact on consumers.
The decision by GM, the third-largest advertiser in the US, marks the first highly visible crack in Facebook's strategy and underscores doubts about whether advertising on Facebook works better than traditional media.
"This does highlight what we are arguing is the riskiness of the overall Facebook business model," said Brian Wieser, Internet and media analyst at Pivotal Research Group.
"It is not a sure thing. It sure looks likely that it will be one of the most important ad-supported media properties, but it's not certain because there will be marketers who are challenged to prove the effectiveness of the marketing vehicle."
GM said it will still have Facebook pages, which cost nothing to create and for which it pays no fees, to market its vehicles and added that it is not unusual for it to move spending around various media outlets.
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