The Day After: GM's Pullout from Facebook

By Joel Arellano | May 16, 2012
Are you one of the few who actually notice those ads surrounding your Facebook page? Well, get ready to see one less advertiser. General Motors rocked both the automotive and business worlds this week when it confirmed reports it was pulling its ads from social media darling Facebook. The U.S. largest automaker currently spends $40 million marketing on the virtual hangout, directly paying $10 million on ads. GM rationale to pull out is pure business: it's not seeing a return on its investment. Translation: where are the car sales? Doomsayers are already saying GM's action will cost it dearly. Forbes writes that no GM vehicle showed up on its popular car lists among women. The business site points out that millennials, or those born in the Eighties, dominate Facebook and GM's withdrawal will make it more difficult to attract that already surly group. GM, for its part, will continue its Facebook presence, utilizing instead the site's available free pages. GM's $10 million withdrawal won't make a dent in Facebook's revenue, which was reported to be nearly $4 billion in 2011. The social media site, though, plans its initial public offering (IPO) later this week, and GM's actions have potential investors nervous: GM ranked the fourth highest investor in advertising, following stalwarts like Procter & Gamble and Oreal.'s take: Did you notice the GM ads on Facebook? What about the other automakers? We honestly don't see an immediate impact to GM's bottom line. Instead, the automaker's action will probably get a few investors from continuing to drink the Facebook kool-aid and actually ask themselves what product or service (or both) does Facebook actually provide. And is it really worth the millions? Source: Automotive News (Subscription required), Forbes

Seems they do need to get out.