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.