GM to stop investing on Facebook ads

A recent announcement made by American automotive giant GM might change the entire social media advertisement culture. As social media is one of the most widely sourced marketing platform, world’s leading brands prefer posting ads on them rather than investing billions in brand building. However, GM has outspoken the trend and believes that Facebook ads have little impact on visitors.

This news comes just before the social networking giant Facebook plans to go public. It suggests that spending billions on creating and maintaining Facebook ads and pages was pointless, as users get to pay nothing for creating FB pages and promoting the brand. The same sum could be spent around promoting the brand via other digital media.

GM to stop investing on Facebook ads

GM spokesperson said, “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.”

In terms of figures, America’s third largest advertiser GM spends about $40 million annually to make its presence on Facebook, which includes $10 million paid ads and the rest is used for creating pages of the brands and models of the company on the site. It is a large sum looking at the annual expenditure of $1.11 billion on ads, including $271 million for online display and search engines.

However, other automotive giants differ on the subject, and Ford motors continues to be faithful to Facebook ads, investing over 20 percent of marketing budget on digital and social media.

This gives a chance for the social network to nourish from the advertising platform, and Facebook Inc (FB.O) increases its offering by 25 percent to raise about $15 billion.

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