On Tuesday, General Motors pulled its ads from Facebook.
The auto giant had a $10 million ad buy on the site, a tiny fraction of GM's $4 billion global ad budget; but after determining their ads had little impact, they walked away from paid Facebook advertising. GM will continue to promote its products on Facebook using free business pages.
In light of Facebook's upcoming IPO, the incident has sparked questions about the limits of Facebook advertising, and whether other companies will follow GM's lead.
What does this mean for you?
Keep an eye on how your marketing dollars are working, and always be flexible in your strategy. GM is one of the world's biggest brands, but their pulling out of Facebook is no different than a property manager canceling an underperforming ILS listing. Our experience with Facebook ads is similar to GM's, and we think your budget is better spent in SEO, Google AdWords or content development. But your results may differ, and you don't know until you try it out.
GM's new Facebook plan — focusing on their business page as a customer service portal — is what we recommend to our clients. Our metrics show that this, combined with a dynamic marketing strategy elsewhere, is the strongest course of action.