GM talking with Facebook about advertising again: sources

DETROIT/SAN FRANCISO Tue Jul 3, 2012 4:47pm EDT

A giant ''like'' icon made popular by Facebook is seen at the company's new headquarters in Menlo Park, California January 11, 2012. REUTERS/Robert Galbraith

A giant ''like'' icon made popular by Facebook is seen at the company's new headquarters in Menlo Park, California January 11, 2012.

Credit: Reuters/Robert Galbraith

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DETROIT/SAN FRANCISO (Reuters) - General Motors Co and Facebook Inc are discussing the return of the U.S. automaker as a paid advertiser almost two months after GM said it would stop running ads on the social networking website, sources close to the situation said on Tuesday.

Although the two companies remain far from reaching an agreement, Facebook executives have assiduously courted the world's largest carmaker. One source said Facebook was not pushing for GM's immediate return, but offered to provide data showing the effectiveness of the website's paid ads.

Facebook Chief Operating Officer Sheryl Sandberg sent GM Chief Executive Dan Akerson an e-mail urging the company to reconsider its decision shortly after the third-largest U.S. advertiser pulled its ads in May, a move that undermined confidence in Facebook on the eve of its highly-anticipated initial public offering, according to sources who were not permitted to speak publicly because the talks are ongoing.

At a global advertising conference in Cannes, France, last month, Facebook global sales head Carolyn Everson sought out GM's global marketing chief Joel Ewanick to continue face-to-face talks, leaving open the option of GM returning to the fold, sources said. Facebook offered the same information it provides to all of its big advertisers, but did not offer any concessions.

GM and Facebook declined comment. The news was earlier reported by the Wall Street Journal.

Three days before Facebook's May 18 IPO GM said it was dropping paid ads on the website because they had little impact on consumers.

The decision by the carmaker, which spent $10 million on Facebook in 2011, was the first highly visible crack in Facebook's strategy and underscored doubts about whether advertising on Facebook works better than traditional media.

GM emphasized at the time that it would retain its Facebook pages, for which it paid no fees, to market its cars and trucks.

People familiar with a meeting that took place before GM's announcement in May said Facebook officials failed to convince GM's top marketing executives of the value of Facebook's paid ads.

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 previously said it spends about $40 million on its Facebook presence, but only about $10 million of that was paid to Facebook for advertising. The remaining budget covers the creation of content and the advertising and media agencies involved, the newspaper said.

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.

(Reporting By Ben Klayman in Detroit and Gerry Shih in San Francisco; Editing by Alden Bentley)

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Comments (2)
xyz2055 wrote:
Facebook..biggest dog with fleas stock on the planet. It has “short” written all over it. Wait until their quarterly earnings scheduled for later this month come out. I’ve never seen such a broad range of analysts estimates in my life. I got $50 that says they don’t hit the low end of analyst estimates ($0.24 per share). On valuation this stock should be trading in the $7 to $10 range.

Jul 03, 2012 10:44pm EDT  --  Report as abuse
Harry079 wrote:
WELCOME to MY PARLOR said the SPIDER to the FLY.

Spend you money here and you will only slowly die.

You will feed our kitty and don’t ask why.

The Heartbeat of America so long bye bye.

Jul 04, 2012 12:52pm EDT  --  Report as abuse
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