Would General Motors Reinstating Facebook Ads Boost The Social Network’s Share Price?

Following its less than stellar opening on the stock market in May that prompted many to question the future of profitability on mobile for the world’s largest social network, there is a sense of the prodigal son returning for Facebook. And that prodigal son comes in the shape of General Motors.

If you cast you minds back to a few days before Facebook’s IPO, GM very publicly pulled all of its advertising from Facebook – a whole $10 million worth of advertising. The reasons were simply that the motor company weren’t seeing a justifiable ROI from the Facebook ads and it was time for them to stop ploughing money into that platform.

However, Bloomberg reports that a recent meeting between Facebook COO Sheryl Sandberg and GM CEO Dan Akerson was to discuss returning. There were other boardroom level meetings between representatives from the two companies that suggest GM will be reinvesting some of their advertising budget in Facebook ads.

The Wall Street Journal have been reporting that Facebook was willing to provide GM with better ROI metrics, but without offering any preferential treatment. It is also said that while at this time GM has not committed to returning, the company is in talks with Facebook.

Although $10 million is not a sum of money to be sniffed at, when compared to the ca. $1bn price tag attached to Facebook pre-IPO, GM dropping their Facebook ads would roughly equate to a 0.01% loss for the social network. However, the public manner in which they withdrew their custom, coupled with the timing may have been one of the contributing factors towards Facebook’s share price dropping to $30 from its starting value of $38.

But would the return of General Motors to Facebook’s customer list have a significant impact on the stock price? Talk of the return has done little to excite the market thus far, but getting GM back on board would certainly be a triumph for Facebook as it attempts to convey new ad formats and metrics that demonstrate its ability to deliver a marketing ROI.

About Andrew Robertson

I'm Andrew, I work as the Social Media & Marketing Assistant at SocialSafe. I've been writing blogs on here for over two years now, so you'll find pieces from me about anything relating to social media and tech, as well as the changing face of personal data. There's also room for the occasional post on some slightly off topics stories... just for the sake of variety!!

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