GM to Put Brakes on Facebook Advertising
General Motors (NYSE:GM) has been embracing technology recently. Last week, the Detroit-based auto manufacturer announced it is giving away free Apple Inc. (NASDAQ:AAPL) iPads to every buyer of its Cadillac XTS. The move is aimed at familiarizing customers to new touch controls found in the company’s latest Cadillac addition. However, GM is scaling back its technology focus when it comes to advertising.
On Tuesday, America’s largest auto maker reportedly plans to stop advertising on Facebook after determining their ads had little impact on consumers. When asked about the move, GM marketing chief Joel Ewanick explained that the auto maker, “is definitely reassessing our advertising on Facebook, although the content is effective and important,” according to the WSJ. GM executives met with Facebook managers to discuss the concerns, but GM was not convinced that paid advertising on the social-media giant’s website was beneficial.
According to the Journal, GM spends about $40 million on Facebook activities. Nearly $10 million of that amount is paid to Facebook for advertising, while the rest covers content created for the site and maintenance. GM is the third largest advertiser behind other consumer giants such as Procter & Gamble Co. (NYSE:PG) and AT&T Inc. (NYSE:T).
A new poll by the Associated Press and CNBC confirmed advertising concerns at Facebook. Out of the 1,004 respondents, 57 percent said they had “never” clicked on ads or sponsored content when surfing the social-networking site. A whopping 83 percent of respondents said they “hardly ever” clicked on advertising content found on Facebook. Only 4 percent of those surveyed said they often click on ads.
Shares of General Motors closed nearly 1 percent lower on Tuesday, but jumped almost 4 percent in late trading after Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRKA) disclosed it had purchased 10 million shares in the company during the first-quarter.
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