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General Motors to Possibly Resume Advertising on Facebook

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Reports surfaced in Detroit early this morning that indicate General Motors (NYSE: GM) is in talks to rejoin the popularized Facebook (NASDAQ: FB) advertising realm. The social network could become a huge asset to General Motors' marketing segment, as the platform has proved successful for other automakers in the past.

General Motors recently pulled its advertisements from Facebook completely, with the company deciding to place its $10 million Facebook promotion budget on pause as the website went public. While a move like this did not necessarily cause irreparable damage, it certainly did not reflect well on the social network and preceded the issues to come when Facebook joined the NASDAQ in late May.

Facebook advertising has become a highly competitive and expensive means of promotion, and one that many large-cap companies have grown fond of. Take Ford (NYSE: F) and Coca-Cola (NYSE: KO) for example; both leading businesses dish out millions of dollars annually to ensure that their brands are being touted on perhaps the world's most notorious, traffic-ridden website.

According to the Detroit News, General Motors has not yet made a firm decision on whether or not to return to the platform that its competitors find useful, as the company stated less than two months ago that advertising on Facebook has been unsuccessful.

"Daniel Akerson, the automaker's chairman and chief executive, has held talks with Facebook chief operating officer Sheryl Sandberg, as have other executives about a possible return. GM has made no decisions, and wants more evidence that paid advertising on Facebook is effective, the company confirmed," The Detroit News reported Tuesday morning.

General Motors recently sliced its advertising budget by 16.1 percent, which may have something to do with the automaker's recent Facebook-promotion hiatus.

The company has been experiencing a bit of financial turbulence as of late. Bank of America recently lowered General Motors' price objective and estimates on softness abroad, with international economic worries creating a sense of apprehension.

As General Motors strives to regain its footing overseas, the infamous automaker will continue to discuss its potential marketing return to the world's largest social network. While the company once found that Facebook advertisements are fairly ineffective, it looks as though management is willing to explore its options and jump on the bandwagon once more.

General Motors closed yesterday at $19.57, down around 3.5% year-to-date.

Latest Ratings for GM

DateFirmActionFromTo
Oct 2014Credit SuisseMaintainsUnderperform
Oct 2014SusquehannaInitiates Coverage onNeutral
Oct 2014Morgan Stanley

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