GM bails on Facebook advertising

Sharon Terlep, Suzanne Vranica and Shayndi Raice, reporting for the Wall Street Journal:

General Motors Co. plans to stop advertising with Facebook Inc. after deciding that paid ads on the site have little impact on consumers' car purchases, according to a GM official.

The move by GM, one of the largest advertisers in the U.S., puts a spotlight on an issue that many marketers have been raising: whether ads on Facebook help them sell more products. On Friday, Facebook is expected to sell shares in an initial public offering that could put a market value on the company of as much as $104 billion.

Via clinical professor of marketing Mohan Sawhney, who writes, "The Facebook conundrum—advertisers HAVE to be on Facebook but it isn't working. Facebook will eventually figure out a model that works, but [it's] bad for [the] IPO."