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GM pulls out from Facebook advertisement

By SYF77 on 21 May 2012

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General Motors (GM) has decided to pull its advertising campaigns from Facebook, citing that their paid advertisement had little effect on customers. The move comes just days ahead of Facebook's initial public offering.

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GM spokesman, Pat Morrissey, commented that the automaker is reassessing its Facebook advertising and clarified that the review is part of a regular analysis the company conducts on spending its advertising funds effectively. "We look at this with all media outlets, we look at the effectiveness," he said. "We move money around to various outlets."

GM's announcement adds fuel to critics who say that Facebook, and other tech sites, may be overvalued. More than 50 percent of Facebook users say they never click on Facebook's sponsored advertisement, according to a recent Associated Press-CNBC poll.

In addition, only 12 percent of respondents say they feel comfortable making purchases over Facebook, questioning the effectively of monetizing the social network platform. Facebook’s shares are expected to be valued at around $38 (S$48), making the company poised to be worth up to $100 (S$ 127) billion .

GM's move is akin to political party members quitting the party before a major general election. It shakes up public confidence. In 2008, when GM was heading into bankruptcy, the company dropped some of its large one-time ad spends such as the Superbowl and Emmy award night.

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SYF77
Written by SYF77
I have been a car fanatic since 1989, when my father was changing our family car then to a Toyota Corolla 1.6 GL fitted with a Twin Cam 16 valve engine that was carburetor-fed, a big deal back in those days. The automobile technology and industry fascinates me and I hope to broadcast these interesting developments to everyone out there through this blog.



 
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