General Motors may return to Facebook

The automaker decided just last May to pull its paid advertising from the social network. That didn't last long.

By Benzinga Jul 3, 2012 3:21PM
By Katey Stapleton, Benzinga Staff Writer

Reports surfaced in Detroit Tuesday that indicate General Motors (GM) may return to Facebook (FB) as a paid advertiser. This comes after a well-publicized rift in which the automaker said it wasn't getting enough of a return from its Facebook presence.

The new relationship could become a huge asset to GM's marketing segment, since Facebook has proved successful for other automakers in the past.

GM decided to place its $10 million Facebook ad budget on hold in May as Facebook was headed to its initial public offering. While the move did not necessarily cause irreparable damage, it was a high-profile blow that dampened enthusiasm for the social network's IPO.

Facebook advertising is a highly competitive and expensive promotional tool, but one that many large-cap companies have grown fond of. Ford (F) and Coca-Cola (KO), for example, are leading businesses that dish out millions of dollars annually to ensure that their brands are being touted on perhaps the world's most notorious, traffic-heavy site.

According to the Detroit News, GM has not yet made a firm decision to return to the platform that its competitors find useful.

GM CEO Daniel Akerson has talked with Facebook chief operating officer Sheryl Sandberg about a possible return, The Detroit News reported Tuesday. But "GM has made no decisions, and wants more evidence that paid advertising on Facebook is effective," the newspaper added.

GM recently sliced its advertising budget by 16.1%, which may have something to do with its Facebook hiatus.

The company has been experiencing some financial turbulence as of late, although it reported very strong June U.S. sales numbers Tuesday. Bank of America recently lowered GM's price targets and estimates on softness abroad as international economic worries linger. Rivals such as Ford have had a particularly rough time in Europe lately.

As GM strives to regain its footing overseas, the infamous automaker will continue to discuss a return to the world's largest social network. While the company once found that Facebook advertisements are fairly ineffective, it looks as though management is willing to explore its options and jump on the bandwagon once more.

General Motors closed Tuesday at $20.67, up almost 2% year-to-date.

More from Benzinga
Jul 3, 2012 5:01PM
I have to wonder why advertisers waste so much money on things like this in the first place.  Maybe I'm unique but I sure dont see an ad on tv, in a magazine or on facebook and say, gee I want to buy that product.  If anything, I try to steer clear of products from companies that place ads on things like facebook because its a major hindrance to web surfing.
Jul 3, 2012 5:46PM
I am not a fan of ads online.  Many of the scripts they run lock up my computer.  Especially the ones on you tube
Jul 3, 2012 7:34PM
How many Volt's were sold? That car was putting sexy back in GM!
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