GM Dropping $10 Million in Facebook Ads Because They Don’t Work

PALO ALTO, CA - APRIL 20:  Facebook CEO Mark Zuckerberg looks on during a town hall style meeting with U.S. President Barack Obama at Facebook headquarters on April 20, 2011 in Palo Alto, California. The president used the opportunity to outline his views on the budget deficit ahead of a looming battle with congressional Republicans over fiscal matters.  (Photo by Justin Sullivan/Getty Images)
Photo: Justin Sullivan/2011 Getty Images

Days before Facebook's much-hyped initial public offering, General Motors has announced that it's pulling about $10 million in advertising from the social network, finding the marketing strategy to be almost useless. GM said in a statement that the company "is definitely reassessing our advertising on Facebook, although the content is effective and important" — content being the free pages Facebook provides. "[W]e 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." The paying part, not so much.

Facebook made $3.7 billion in revenue last year, 85 percent of which was from advertising, so GM's business is just a blip, but as the third largest advertiser in the nation behind Procter & Gamble and AT&T, the last thing Mark Zuckerberg needs is for the automaker to be a trendsetter. "Companies in industries from consumer electronics to financial services tell us they're no longer sure Facebook is the best place to dedicate their social marketing budget — a shocking fact given the site's dominance among users," one expert explained to the Wall Street Journal.

The $100-billion-plus IPO is happening with or without GM, of course, and our own Paul Ford predicted today that "there's still a zillion things [Facebook] can do to make money," but they should probably get started on at least a few more of those ideas, just in case.