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General Motors has confirmed that it is pulling its advertising from Facebook because it determined paid ads had little impact on consumers.
GM had been spending about $10 million (R8.4 million) on paid advertising and $30 million (R250 million) on unpaid marketing on Facebook.
GM spokesman Patrick Morrissey said: “We are reassessing our Facebook advertising, but we remain committed to very aggressive social media strategies and will continue to push content on Facebook through our product and brand Facebook pages.”
GM's pullback comes as other marketers are questioning the value of paid ads on Facebook despite the vast amounts of time huge numbers of consumers spend on the site.
The US auto giant is the third largest advertiser in the United States with expenditures of $1.8 billion (R15 billion) in 2011, according to Kantar Media.
It will continue to expand its use of unpaid marketing such as the creation and management of content on the Facebook pages of its brands and cars, according to Morrissey.
While Facebook and Google both have broad reach, ads posted on the search giant's websites are 10 times more likely to be clicked than those on the social network, according to online marketing specialty company WordStream.
WordStream gave Google top marks for performance of its display ad network while it found Facebook in need of improvement.
“The comparison suggests that Google currently offers advertisers more value in terms of both options and results for advertisers, and that Facebook has a lot of catching up to do,” WordStream said.
Facebook has yet to support advertising on smartphones or tablet computers that have become popular social networking tools, and has more limited ad targeting options than Google, the analysis concluded. - AFP