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Facebook & GM Revive Advertising Relationship After Last Year’s Pre-IPO Breakup

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Facebook & GM Revive Advertising Relationship After Last Year’s Pre-IPO Breakup
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After a highly publicized split nearly a year ago, it looks like Facebook and General Motors are getting back together.

GM has confirmed to Ad Age that they have decided to once again throw some advertising dollars into Facebook.

“Chevrolet is testing a number of mobile-advertising solutions, including Facebook, as part of its ‘Find New Roads’ campaign,” said Chris Perry, VP Chevrolet marketing in the U.S. “Today, Chevrolet is launching an industry-first, ‘mobile-only’ pilot campaign for the Chevrolet Sonic that utilizes newly available targeting and measurement capabilities on Facebook.”

Big news for GM, sure. But why is this big news for Facebook? Let’s take a brief walk through Facebook and GM’a relationship over the past year.

In May of 2012, just days before Facebook’s IPO, GM announced that they would be pulling all of their Facebook ads. They stated that they simply weren’t convinced that Facebook ads were truly effective, and furthermore were unsure how they fit into their future marketing strategies. It was a high-profile move, at a time when Facebook’s ability to monetize was on everyone’s mind.

Immediately, it felt like a pretty big slap to the face. A public vote of no confidence. A few days later, GM noted that they were making many big advertising decisions at the time. Basically, hey – no hard feelings. It’s all just part of a comprehensive retooling of the strategy. Of course, this did little to neutralize the sting, especially right around the IPO. Facebook’s stock price tanked, people started talking monetization issues, which led to talks about advertising strategies, which of course led to GM as the big example of a company who pulled the plug.

A couple of months later, GM’s marketing head Joel Ewanick resigned – although it wasn’t really tied to the Facebook, specifically.

Since then, multiple reports have suggested that Facebook and GM had reestablished talks. The most recent indicating that the two companies were “actively talking” about a return to a paid advertising partnership.

“We’re still actively talking to them and looking at opportunities that come our way…I wouldn’t tell you that there’s a Mexican standoff here. We just didn’t see the value [in the ads],” said GM’s interim marketing head Alan Batey back in January.

Ad Age says that part of the reason GM pulled out of Facebook in the first place involved the inability for the company to run bigger, “higher-impact” ads. Although that’s still not really possible, Facebook advertising has changed quite a bit in the last year – mainly with the launch of the real-time, cookie-based Facebook Exchange retargeting system.

“We’ve had an ongoing dialogue with GM over the last 12 months and are pleased to have them back as an advertiser on Facebook. We look forward to working even more closely with GM in the coming weeks and months,” said a Facebook spokesperson.

Any way you look at it, it’s a good thing for Facebook that GM has decided to try it again. There’s a chance that it could signify to other companies that it’s safe to open up their Facebook ad budgets a little bit. In the end, we’re not talking about a huge ad budget here that’s going to make or break either Facebook or GM. Before GM yanked their ads last May, it was reported that they had only been spending around $10 million on Facebook ads – hardly a game changer.

[Image via Chevrolet.com]

Facebook & GM Revive Advertising Relationship After Last Year’s Pre-IPO Breakup
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