Are Facebook Ads Relevant? General Motors Says ‘No’

Yesterday, car manufacturer and longtime advertiser General Motors hit reverse and pulled out of its advertising contract with Facebook. The company announced that this decision was due to poor performance and low ROI. This decision also followed closely on the heels of an MSNBC report showing that Facebook users don’t really trust the paid promotion of products and services through their go-to social networking site.

Thanks to Facebook’s free business pages, companies are able to create their own space on the website and promote it without cost. They’re able to monitor and analyze people’s interaction with this page and communicate directly with those who view it, “like” it or comment on its Wall. So why pay extra for small, non-interactive banner? Well, one reason is simply for the promotion of brand awareness – getting your logo out there and keeping it top-of-mind on a site where people spend an average of 16 hours of viewing time each month in the U.S.

If you’re currently advertising directly through Facebook, you may want to analyze the results and cost efficiency for doing this rather than activating and maintaining a business page. If you’re active enough with your contacts, you can still get your brand out there in the social media sphere, but in a much more impactful way. If you already have a business page as well, there may be ways to invest marginal fees and more page management time to get greater – and more measurable – results. Then you, too, may find it best to stop paying for advertising. On the other hand, your company may be better suited to the Facebook audience than automobile brands.

Chrysler and Ford continue to buy advertisements with the popular social media network, which stands to launch its public stock offerings this Friday, May 18.

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