GM Gives Facebook Ads the Boot

GM has pulled its $10 Million Facebook ad budget after deciding that paid Facebook ads had little effect on consumer vehicle purchase decisions according to the Wall Street Journal.

GM says Facebook not effective for automotive advertisingThe marketing folks at GM started to question the effectiveness of the paid ads earlier this year, and after Facebook ( and the data) couldn’t convince them otherwise, they decided to cancel the $10 Million campaign.  GM is still expected to spend $30 Million this year managing the Facebook pages and presence for all its brands.

And as of now, GM has a post on its own Facebook page letting its 378,000 fans know that they are dropping Facebook ads, but plan to continue interacting with their fans.

Other manufacturers say they plan to continue advertising on Facebook since half the US population is there, but some research points to a lack of engagement in the ads.  Facebook ads have an average .05% click-through rate, while click-throughs on the Google Display Network are 8 times higher at .4%.

Advertisers on Google’s network can boost engagement with the splashy graphics and automotive web banners with shiny cars and offers that car dealers and factories like to see.

Kind of strange that the news comes out just days before Facebook is set to go public in what will probably be the 2nd or 3rd largest IPO in US history.  2nd behind Visa… or 3rd behind GM.

The $10 Million is just a sliver of GM’s $1.8 Billion ad budget and an even tinier sliver of Facebook’s $3.7 Billion in revenue, but Automotive Advertising is the largest pool of ad dollars in the US with Car Dealers and the factories spending a combined $14 Billion.


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