General Motors to stop paying for Ads on Facebook

General Motors will stop its paid ads on Facebook, deciding that it fails to generate interest for the company’s car purchases in US. GM claims that Facebook ads are ineffective and have limited impact on consumers’ decisions. However, the American carmaker will continue to utilize the free ad services provide by the social networking website.

GM is amongst the largest advertisers in the United States - last year the company spent about USD 10 million on FBV ads, which were a tiny part of GM’s approx USD 1.8 billion budget for digital ads in the US. The carmaker is working on various options to increase sales and has also tied up with PSA Peugeot Citroen group for better access to European markets. However, the company has once again lost the position of largest automaker in the world to Toyota at the end of first quarter of 2012.

General Motors’ move has raised questions among many marketers; whether the FB ads will help them sell their products. It may also prove bad for the website, as the website is increasing its IPO size by 25 per cent to raise about USD 15 billion.