GM And Its Facebook Ads: Why Such ‘Big’ Happened Just Before IPO?

Posted on May 16 2012 - 2:43pm by Editorial Staff

We reported earlier today that General Motors planning to stop advertising on Facebook after the company’s marketing executives determined their paid ads had little impact on consumers. Interesting fact is that the news broke out only three days before the social giant IPO. GM spends about $10 million of its 2011 ad spending out of $1.8 billion on Facebook

Two aspects coming out with the news: first why and what brings the news certainly at this time only and second as said, if GM pulls out its campaign from social giant – then it would be thinkable topic as if $10 million will be shelled out – it is like one of the bigger chunk of pie – furthermore, thinking of Facebook how it make money – it make mostly by Zynga, social gaming giant – and huge advertisements that it is displaying.

“Facebook advised [GM] to invest more wisely in a campaign that would reach more people,” this person said. Instead, though, GM put most of its money into the development of promotional apps and its corporate “page presence” on Facebook, and “didn’t see a response” as a result. “No one will know that stuff is there unless you use paid media to promote it,” the individual said.

Rex Briggs, CEO of marketing analytics firm Marketing Evolution Inc., said auto makers like GM are used to marketing campaigns that feature splashy TV ads or give big discounts on cars to bring people into stores. Mr. Briggs, who has worked for GM in the past and now works with other auto makers including Honda Motor on determining their return on social media campaigns, said auto makers can’t afford to ignore tools that can help improve people’s feelings toward a brand.

We hope this would not be the case again with other advertisers. Furthermore to note that Facebook today has filed its eight amendments and now offering 180,000,000 shares of its Class A common stock and the selling stockholders are offering 241,233,615 shares of Class A common stock. The social giant has now increased its initial public offering range from $28-$35 to $34-$38 per share, and offered 50.6 million more shares.

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