Report: GM dropping Facebook ads

May 15, 2012 at 6:23 PM
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DETROIT, May 15 (UPI) -- General Motors Co. will drop high-flying Facebook from its U.S. advertising program due a lack of impact on its customers, sources told The Wall Street Journal.

The venerable automaker will maintain its Facebook page, which costs GM nothing, but will no longer buy ads on the booming social media site, which is going public Friday, the newspaper said Tuesday.

The Journal's sources said the move came after GM marketing executives determined they were not getting enough return on their Facebook investment of about $40 million, which included $10 million paid to Facebook.

The head of GM's marketing department, Joel Ewanick, told the newspaper they were "definitely reassessing our advertising on Facebook." He said the Facebook page maintained by GM was "effective and important."

The Journal said GM's decision would not be a serious blow to Facebook's bottom line, but it raised questions about Facebook's effectiveness as an advertising platform, which has been a key selling point in the run-up to Friday's IPO, which has been valued at an estimated $105 billion.

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