FACEBOOK DOESN’T WORK: General Motors Axes Ads

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General Motors, the most successful automaker in the world, has announced that it will no longer advertise on Facebook. According to GM, ads on Facebook are ineffective. Interestingly, Facebook is on the cusp of releasing it’s IPO, which estimates suggest will value the company at over 104 Billion dollars. This value however is based on the perception that Facebook holds some monetary value for advertisers and businesses. If Facebook is a waste of advertising dollars, as GM suggests, it may call into question the value of social media sites, in general. If the undisputed king of the social media landscape cannot claim to deliver financial results, for it’s advertisers; What then, is the value of advertising on any social media platform? GM left Facebook with a back-handed compliment, by adding that Facebook is very useful for engaging with it’s customers.

As Facebook ventures out into the real world of business, there will be even greater pressure on the company to prove that it has real world value. It will no longer be enough to boast of millions of users or a company cool factor. Facebook will have to prove that, just like any other company, it has an actual product to sell. This will be a crucial test for Facebook, Social Media and the Internet as a whole.

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