Facebook IPO hit by General Motors ad switch

General Motors global CMO Joel Ewanick (pictured) has instigated a number of big waves since taking over at the US car giant and he’s just launched another one: pulling all the company’s media spend from Facebook.

Facebook, of course, is preparing for its eagerly-awaited IPO on Thursday which is expected to value the company at about $100bn. So, on the face of it, GM’s decision could hardly come at a worse moment. It’s unlikely to derail the IPO to any significant extent but casts a big doubt over the commitment of big advertisers to a medium which puts bums on seats (over 900m users globally) but bums who aren’t very keen to do what big advertisers want them to do, click on ads.

GM said in a statement:”We regularly review our overall media spend and make adjustments as needed. 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. In terms of Facebook specifically, while we currently do not plan to continue with advertising, we remain committed to an aggressive content strategy through all of our products and brands, as it continues to be a very effective tool for engaging with our customers.”

Which is all a bit odd as social media, essentially, means Facebook. Twitter is not a big advertising medium yet, nor is it likely to be, not on the scale of Facebook with $4bn in ad revenue anyway. LinkedIn is much, much smaller but maybe its mainly business users are less ad-averse than Facebookers. Maybe Google+, Google’s rival to Facebook, has a better advertising proposition. Google has been around a lot longer than Facebook and has been assiduous in taking advertisers and agencies with it, although many of the latter fear it will dump on them in the end.

Maybe Ewanick just wants a better Facebook deal or even a special deal, like the one he extracted from Omnicom’s Goodby Silverstein and Interpublic’s McCann when he shoehorned them into new Chevrolet agency Commonwealth. One thing’s for certain, Ewanick’s ability to grab a headline hasn’t reduced, with his Facebook ads announcement coming just a day or so before the IPO of the century.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.