Report: Facebook encouraged GM to invest in free pages

The widely reported news that GM dropped its Facebook ads has an interesting backstory, according to a Reuters report.

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Following a meeting with Facebook officials, General Motors announced that it would drop its paid advertising on Facebook. As Reuters reports:

“GM’s decision followed Facebook officials’ failure to convince top marketing executives at the U.S. automaker of the benefits of Facebook’s paid ads … That was after Facebook officials focused more on touting the social networking website’s free pages.”

The move calls into question Facebook’s revenue model. If more companies follow GM’s lead and decide to just use the free pages that Facebook offers, then it’ll be hard to sustain huge profits. GM did say, however, that it was only testing not using Facebook ads, and it may purchase them in the future, according to the article.

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