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GM drops facebook advertising

General Motors has pulled $10 million in ads from Facebook because they just didn't work, according to Wall Street Journal reporter Dennis K. Berman.

Berman, the Journal's Marketplace editor, wrote on Twitter:

"GM has pulled its $10 million advertising campaign from Facebook. Why? The ads didn't work."

UPDATE: GM will continue to use Facebook's free media to promote its brands, the WSJ reported. The $10 million was the entirety of GM's Facebook ad budget, the Journal noted.

GM is the first major advertiser to indicate disappointment with Facebook and reduce its spend. GM is the third-largest advertiser in the U.S., and although the cancellation isn't material to Facebook's numbers, it will be psychologically devastating to sales management there. The Journal reported:

GM, started to re-evaluate its Facebook strategy earlier this year after its marketing team began to question the effectiveness of the ads. GM marketing executives, including Mr. Ewanick, met with Facebook managers to address concerns about the site's effectiveness and left unconvinced advertising on the website made sense, according to people familiar with GM's thinking.

The Journal also noted that of the $40 million GM devotes to creating content for Facebook, only $10 million of it actually went to Facebook in the form of paid media.

The report comes awkwardly in front of Facebook IPO, expected Friday. It's part of a drumbeat of background noise to the offering, suggesting that advertising on Facebook is less effective than clients would like it to be.


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