OOPS! GM drops Facebook ads: They ''don't work''

General Motors (NYSE:GM) is to stop advertising on Facebook (NASDAQ:FB). Just days before IPO, there are better times for this loss to leak. In IT Blogwatch, bloggers wonder what effect this will have on the opening Facebook share price and valuation.

[Update: GM's main competitor scoffs at the idea that Facebook ads don't work]

By Richi Jennings: Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention: The Gregory Brothers tackle racism...

    Sharon Terlep, Suzanne Vranica and Shayndi Raice report:

[P]aid ads on [Facebook] have little impact on...car purchases, according to a GM official. ... GM will continue to promote its products on Facebook, but without paying. ... GM's decision raises questions about the ability of Facebook to sustain...88% revenue growth...first-quarter ad revenue was down 7.5%.


Earlier this month, a top marketing executive from the U.S. division of Kia...questioned the value of Facebook ads. ... Other auto makers are more confident about Facebook's value.   

Dominic Rushe confirms the story:

[The] world's biggest car company, has unfriended Facebook. ... The company confirmed it is dropping the ads but intends to keep using...Facebook pages, which are free.


[It] sends an awkward signal in a week when the company has been trying to convince investors...[of its] massive valuation. ... The news comes as a poll...found nearly half of Americans believe Facebook is a passing fad.   

Nate Elliott is the bringer of more bad news:

Will Facebook ever focus any of [its] innovation on helping marketers? ... Facebook is fantastic at introducing great new features and services for its end users. ... And that focus on better serving end users has seen Facebook grow quickly over the years.


[But] Facebook has lurched from one advertising model to another. ... [It] still hasn’t stumbled upon a model that’s proven consistently successful for marketers...[and it] often stands directly in the way of marketers’ efforts to measure the performance of their programs.


One global consumer goods company told us...Facebook was getting worse, rather than better.   

    Pamela Parker has yet more:

The news comes as...WordStream released an analysis comparing Facebook Advertising and the Google Display Network. ... Facebook comes up short, with a click-through rate of only 0.05% [vs.] GDN’s 0.4%.


[C]ultivating better relationships with marketers isn’t something Facebook can’t do — it just hasn’t shown a great deal of interest.   

Meanwhile, Preston Gralla urges us not to believe the hype:

Facebook gets all the publicity, but...Microsoft leads Facebook by a wide margin.


[It's] easy to get caught up in hype, especially for those who live in insular tech bubbles. While...Microsoft's reputation is regularly trashed, and Facebook treated as a darling, that's not how it is out in the greater world.   

Update: Christopher Heine talks to the blue oval:

Ford has a different attitude toward paid promotions on [Facebook]. Scott Monty, head of social media at Ford...is still bullish on pre-IPO Facebook.


[Ford] plans on "accelerating our efforts in Facebook and other social platforms. ... We've found Facebook ads to be very effective...combined with engagement, great content and innovative ways of storytelling."


[He] also lauded the idea of working directly with Facebook...to create "first-of-a-kind vehicle reveals...and innovative ways of sharing content."


And Finally...

The Gregory Brothers tackle racism... with soul 

Don't miss out on IT Blogwatch:

Richi Jennings, your humble blogwatcher

Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and security. He's the creator and main author of Computerworld's IT Blogwatch, for which he has won ASBPE and Neal awards. He also writes The Long View for IDG Enterprise. A cross-functional IT geek since 1985, you can read Richi's full profile and disclosure of his industry affiliations.

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