In a move that may very well have a negative effect Facebook's $105 billion share sale on Friday, General Motors confirmed via its spokesperson that it is reassessing its advertising presence on the world's largest social network.
GM released a statement on the matter after the Wall Street Journal reported today that the Detroit carmaker will stop advertising on Facebook because its top brass determined that their paid ads on the website had little impact on consumers.
"We regularly review our overall media spend and make adjustments as needed," GM spokesman Tom Henderson told the USA Today. "This happens as a regular course of business and it's not unusual for us to move our spending around various media outlets -- especially with the growth of multiple social and digital media outlets."
He continued: "In terms of Facebook specifically, we are reassessing our advertising and remain committed to an aggressive content strategy with all of our products and brands, as it continues to be a very effective tool for engaging with our customers."
According to WSJ, GM spends around $40 million per year for its presence on Facebook, of which "only" $10 million go for paid ads with the rest being used to create pages for its brands and models.
However, that is only a fraction of GM's annual marketing budget. According to data provided to Reuters by ad-tracking firm Kantar Media, in 2011, the Detroit automaker was the third largest advertiser in the U.S. behind Procter & Gamble Co and AT&T Inc having spent $1.11 billion on ads in the States, of which $271 million went for online display and search ads.
In other words, the fact that one of the biggest advertisers in the U.S. does not seem keen to continue advertising on Facebook is something that the social network's execs definitely need to look into.