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BizReport : Social Marketing : May 16, 2012

Days before IPO third-largest U.S. advertiser pulls ads from Facebook

The third-largest advertiser in the U.S. has stated it will cease advertising on the world's largest social network because ads are ineffective.

by Helen Leggatt

As Facebook prepares to trade on the Nasdaq General Motors Co has pulled advertising from Facebook. The US auto giant had ad expenditures of $1.8 billion in 2011, according to Kantar Media, and spends about $10 million on paid advertising and $30 million on unpaid marketing on Facebook.

"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 told Politico.

Why is GM pulling their Facebook ads? Simply put, they were failing to drive business.

GM won't be pulling out of Facebook completely. They intend to continue managing their Facebook Pages, which cost nothing to create.

However, not everyone is disillusioned with Facebook advertising. Both Ford and Subaru are reported as being pleased with results and are boosting spending.

"Advertising plus content equals more clicks to our website, which we like," said Subaru spokesman Michael McHale.

A recent AP-CNBC poll revealed that over half (57%) of Facebook users aren't clicking on ads or sponsored content. Another 26% say they rarely click on such content.

Tags: advertising, Facebook, social ads, social marketing, social network, U.S.

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