General Motors couldn’t have picked a worse time to pull out of paid advertising on Facebook when they announced their decision the week of the Facebook IPO. Now, the two companies are in talks to bring paid ads back into the mix at a crucial point in Facebook’s growth as a public company.
WSJ reports that Facebook Chief Operating Officer Sheryl Sandberg spoke with GM Chief Executive Daniel Akerson about the issue with transparency at the heart of the matter. General Motors wasn’t sure if their $10 million spend in 2011 (a fraction of their multi-billion dollar advertising budget) was having a positive effect and Facebook was unable to prove that it was working.
“It is a myth that Facebook advertising doesn’t work,” said Brad Smallwood, Facebook’s head of measurement and insight.
The social network is working on better reporting for General Motors and other advertising customers, though they will not be giving special treatment to the auto manufacturer. Facebook’s revenue in 2011 was $3.7 billion, but earning back the business would help fight the perception that businesses can get more out of Facebook’s free services than their paid advertising.