After a very public spreading-out, Facebook and General Motors may be on the path to rekindling their advertising relationship, according to a new report.
The Wall Street Journal reported, citing sources that GM and Facebook are in talks to determine what it would take to bring the automobile company back to the social network's advertising platform. The Journal says that Facebook will give GM better data on how the company can increase ad effectiveness.
GM made shocks back in May, just ahead of Facebook's IPO, when it decided to pull its $10 million ad campaign from Facebook, saying that the spending did not translate to increased sales. The company did, however, continue its efforts on its Facebook Pages.
Despite Facebook's efforts to bring GM back, the company has yet to make a commitment, according to the Journal. And until Facebook can prove that GM's investment will be worth it, the companies might have trouble actually coming to an agreement.
Facebook's global sales head, Carolyn Everson, said during a June meeting with Ewanick that the social network giant was willing to provide GM with better ad data, a promise Facebook has made to other advertisers, the Journal said.
Facebook declined to comment on the issue. There isn't much of a case for General Motors to close up with Facebook again.
A 2012 Greenlight search and social media survey found that 44 percent of respondents said they "never" click on an advertisement or sponsored listing. Meanwhile, WordStream published an infographic in May that showed Facebook trailing behind sites like Google in terms of online advertising space.
ComScore, however, reported early last month that Facebook ads really do have an effect on social network users.
Greenlight said that Facebook has a clickthrough rate of 0.5 percent to 0.8 percent.
GM, which ranks behind Procter & Gamble Co and AT&T Inc in advertising spending, spent $1.1 billion on U.S. ads last year, according to ad-tracking firm Kantar Media. Overall, GM's spending on advertising rose 5.2 percent last year to $4.48 billion, according to the automaker's annual report.
It spent about $271 million on online display and search ads excluding Facebook advertising, Kantar said.
GM spent about $10 million last year on Facebook advertising, a fraction of GM's total 2011 U.S. ad spending of $1.8 billion, according to Kantar Media. It is also a tiny share of Facebook's total 2011 revenue of $3.7 billion, most of which was advertising sales.
GM also announced in May it would not advertise in next year's Super Bowl because it was too expensive. Ewanick has led a consolidation of GM's ad agencies globally that is expected to save the Detroit Company $2 billion over five years.
The social network's top advertising executives have been on the offensive since its quiet period lifted last month, trying to counter criticism that advertising on the site doesn't work. "It is a myth that Facebook advertising doesn't work," said Brad Smallwood, head of measurement and insight at Facebook in a June interview.
Powered by Bullraider.com