16 May 2012
General Motors pulls $10M Facebook advertising ahead of social networks IPO
The world’s biggest car company General Motors has pulled $10 million USD of Facebook advertising just days before the social network begins trading on the stock exchange.
Talking to the Wall Street Journal Pat Morrissey, director GM product and brand communication said it’s not unusual for the brand to move its spending around various media outlets, particularly since the rise of social media. GM has reportedly said that Facebook ads have yet to demonstrate significant impact on car purchases, but it will remain committed to engaging with customers via its Facebook page.
He continued, “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.”
According to the WSJ, GM has spent approximately $40 million on its Facebook presence – a quarter of which was directly to the social network for advertising. The other $30 million apparently paid for content creation and agency fees, one of which, social media agency Big Fuel, was dropped from the car manufacturers agency roster last December. According to ad-tracking company Kantar Media, the car manufacturer is in the top three advertising spenders, with a 2011 ad spend of $1.1 billion.
Facebook is expected to begin trading on the Nasdaq this Friday, just after days after co-founder and CEO Mark Zuckerberg celebrates his 28th birthday. Facebook has also officially boosted the price of its shares by approximately 15%, which is expected to net the social network anywhere up to $104 billion. Earlier this week it was reported that co-founder Eduardo Saverin has given up his US citizenship, which as a 2% shareholder will save him paying out almost $40 million in taxes to the US government.
Time will tell if the move by General Motors will prompt a similar reaction from other major Facebook advertisers, which netted the social network just shy of $4 billion last year.
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