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GM poised to drop ads as Facebook IPO loomsMay 16, 2012 (Detroit Free Press - McClatchy-Tribune Information Services via COMTEX) -- General Motors is dropping its advertising on Facebook just as the social-media giant's public stock offering is poised to become one of the largest in IPO history. GM spokesman Greg Martin confirmed that after reassessing its media spending it has decided to stop advertising on the popular social-media site. GM spends about $40 million a year on Facebook marketing, the Wall Street Journal said, about $10 million of which is for paid advertisements. GM spokesman Pat Morrissey stressed that the automaker will continue to promote its cars and trucks on its own Facebook pages, but is evaluating its ad spending. "We are committed to a content strategy," Morrissey said. News of the automaker's review came on the same day that an Associated Press-CNBC poll revealed that ads on Facebook are not very effective. In the poll, 83% of respondents said they "hardly ever" or "never" click on the ads Facebook serves up. The ones who did click through were enough to yield the company $4.34 per user in advertising last year. That's up from $3.07 in 2009. GM's view of Facebook differs from crosstown rival Ford, which said it will continue to advertise on the site. Ford has made extensive use of Facebook and other social-media sites, becoming the first automaker to reveal a model on the social-media network in July 2010. Normally, automakers reveal models at major auto shows but Ford unveiled the redesigned Explorer on Facebook first as well as at a series of live events in cities across the country. "Our approach is different than others," when it comes to Facebook, said Matt VanDyke, director of marketing communications for Ford. "We worked with Facebook in advance on how to buy some paid and sponsored advertising to really amplify and leverage the things we were already doing." VanDyke said Ford's social/digital advertising budget is about a third of Ford's overall advertising budget. "For us it's all about the execution. It's not just a paid advertising strategy, or go create wacky content and see if it goes viral." VanDyke said. VanDyke said he views Facebook differently than traditional media. "Social networking is the No. 1 activity and Facebook is the No. 1 site for networking in the U.S.," VanDyke said. Facebook is scheduled to begin trading on Nasdaq on Friday. The world's largest online social network on Tuesday increased the planned price range for its stock to $34 to $38 per share in a filing with the Securities and Exchange Commission. That's up from its previous range of $28 to $35. At the upper limit of $38, the sale would raise about $12.8 billion. As it stands, Facebook would be the fourth-largest U.S. IPO in history. The Associated Press contributed to this report. ___ (c)2012 the Detroit Free Press Visit the Detroit Free Press at www.freep.com Distributed by MCT Information Services |