GM pulls Facebook ads

Facebook has been dealt a blow ahead of its stock market flotation after US car giant General Motors confirmed it was pulling paid-for advertising from the social network.

Vauxhall

It is thought the company concluded Facebook advertising had little impact on car sales after a review of its marketing strategy, according to a Wall Street Journal report.

The marque says it will continue to use the free Facebook pages set up for brands including Vauxhall, Chevrolet and Opel to promote its brands.

A statement from GM given to Reuters 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.”

GM is said to have spent about $1.8bn on advertising in the US alone last year with an estimated $10m on paid for Facebook ads.

Its decision reignites the debate about the return on investment Facebook can offer marketers. It will be a blow to the social network, which sold its appeal to advertisers to potential investors. Facebook is expected to start selling shares on Friday (18 May).

Any concerns raised by advertisers does not appear to have dampened enthusiasm for the initial public offering, however. Separate reports suggest that Facebook has increased the size of its IPO by 25% to €15bn.

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