General Motors plans to stop advertising on Facebook because it determined paid ads had little impact on consumers, the Wall Street Journal reported Tuesday, citing people familiar with the matter.
The news comes at a bad time for Facebook, which is expected to launch an initial public stock offering Friday valuing the social networking site at around $100 billion.
GM’s pullback comes as other marketers are questioning the value of paid ads on Facebook despite the amount of time huge numbers of consumers spend on the site.
The US auto giant is the third largest advertiser in the United States with expenditures of $1.8 billion in 2011, according to Kantar Media.
It will continue to expand its use of unpaid marketing such as the creation and management of content on the Facebook pages of its brands and cars, the Journal reported.
GM had been spending about $10 million on paid advertising and $30 million on unpaid marketing on Facebook.
A spokesman for GM did not immediately return a request for comment.
[The General Motors headquarters in Detroit, Michigan. AFP Photo/Stan Honda]