GM has announced that they will stop funding its’ advertising efforts with Facebook. A reported $10 million in annual spending on paid Facebook ads will be spent in traditional media.
The company decided that it was to difficult to calculate the ROI of the social media site, and that click through rates were exceedingly low in comparison to their other endeavors.
The automaker had spent $30 million in building a Facebook presence for it’s many makes and models. Maintaining that presence will prove more useful to GM over time, where as paid advertising is not getting the conversion rates they had hoped.
There is great speculation as to why GM would announce their pulling out of Facebook ads just before Facebook’s IPO. On May 18th, GM announced that they also won’t be buying Superbowl ad space this year either. They have also reportedly changed buying agencies, and reduced the amount of creative agencies they will use.
GM is projected to save $2 billion in advertising dollars over the next five years. With all of the free publicity they gain by announcing what they won’t be spending in advertising in dollars, they may not need to spend advertising dollars.