General Motors Pulls Facebook Ads

While General Motors has said it plans to maintain fan pages for its vehicles, it will no longer be advertising on Facebook, because it simply doesn't have much of an impact on consumers. It highlighted that it was keen to continue interacting with its customers, but that commercially it would withdraw from the social network.

As one of the biggest advertisers in the US, General Motors spends some $40 million (£25 million) a year on Facebook alone. However, just $10 million (£6 million) of that is for advertising, the rest goes on maintaining the company's many pages - though that could be considered a form of marketing in itself.

GM isn't the only company thinking that ads on sites like Facebook aren't particularly effective. Martin Sorrell of advertising group WPP, said that most social networks were simply not the right context for advertising.

"Facebook, Google+, Twitter are advanced forms of social interaction. We used to write letters to each other and now we correspond through Facebook and Twitter. If you interrupt that with a message you may run into trouble."

Advertising and the selling on of data to advertisers is where Facebook makes the majority of its money. If other companies were to pull out, it could certainly harm the stock price of the the firm, which is currently on track to have the biggest initial public offering of an Internet company in history.

Souce: WSJ