GM drops Facebook advertising

[Charles]

I've been reading more and more negative articles about Facebook. Everything from user's distrust of the site, to the ineffectiveness of their ads. Since most users have little to no faith that their privacy concerns are being considered, they seldom click on a Facebook ad.

Well, GM has announced that they will no longer be advertising on Facebook because of that very reason. Few people percentage wise are clicking through. And this news on the eve of Facebook's IPO, that is their stock offering. Here's the story...

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GM to drop all advertising on Facebook

By msnbc.com staff

In what could speak to Facebook’s viability as advertising medium just days before what is shaping up as a possible record initial public offering, General Motors says it will drop all paid advertising on the site, the Wall Street Journal is reporting.

According to the report, the auto giant's marketing executives "determined their paid ads had little impact on consumers."

GM marketing chief Joel Ewanick told the Journal that the automaker "is definitely reassessing our advertising on Facebook, although the content is effective and important."

The automaker will continue to use free options on Facebook.

The largest American automaker spends about $40 million to maintain Facebook presence, the Journal reported, with about $10 million in paid ads.

GM, the country's third-largest advertiser behind Procter & Gamble and AT&T, spent $1.11 billion on U.S. ads last year, according to Kantar Media, an ad-tracking firm. About $271 million of GM's total ad spend last year was for online display and search ads excluding Facebook advertising.

The move raises a question mark about Facebook's current business model as the social network stands at the brink of going public. A new AP-CNBC poll released earlier Tuesday showed that 57 percent of Facebook users never click on ads or other sponsored content when they are on the site.

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