Does GM's return to Facebook signal new age of social media advertising?

GM gives social network a second chance with mobile ads for Chevy Sonic

After dumping Facebook a little less than a year ago, General Motors is back, running an advertising test on the social network.

GM, one of the largest US advertisers, is testing paid ads geared toward Facebook's mobile users The ads are for the Chevrolet Sonic, a car aimed at younger drivers.

"Chevrolet is testing a number of mobile advertising solutions, including Facebook, as part of its 'Find New Roads' campaign," said Chris Perry, vice-president of US Chevrolet Marketing. "Chevrolet has launched an industry-first 'mobile-only' pilot campaign for the Chevrolet Sonic that utilises newly available targeting and measurement capabilities on Facebook. "

The company noted it has had ongoing dialogue with Facebook over the past year regarding potential advertising and promotional opportunities.

GM's return to Facebook is of special note because the company pulled its advertising dollars from the social network last May, days before Facebook launched its initial public offering amid a media frenzy. GM pulled its US$10 million ad campaign, saying paid ads on the site were ineffective.

While it would no longer pay for ads on the site, GM said at the time it would continue to have a presence on Facebook and work on building up its social media followers.

GM's return, even if on a pilot basis, has to be good news for the social network and could potentially pull in more mobile advertisers, said Ezra Gottheil, an analyst with Technology Business Research.

"It's possible GM is making a new play for younger people and Facebook would fit in with that move," Gottheil said. "Going public with this has to be good, assuming the tests are successful. You know Facebook will be killing itself to make the brand ads successful."

A successful test run could also draw more advertisers to Facebook.

"I would think it would cause some companies to give Facebook another look," said Gottheil. "That kind of public humiliation of dumping Facebook right before the IPO is rare. I just don't know what would make GM do that... It looks good for Facebook that the company is back."

And having the most popular mobile app can't hurt when trying to woo new, or old and disgruntled, advertisers into the fold.

Zeus Kerravala, an analyst with ZK Research, said if GM is going for a younger market, it makes sense look to the world's biggest social network and to a mobile platform.

"Facebook could argue that if you want to appeal to the younger generation, it’s the de facto standard now," he added. "Mobile makes sense as well since the younger generation tends to not use PCs a lot. I'm sure part of this is to try and make GM not look like the stodgy old company it has been."

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