Posted by & filed under Display Advertising, General news, Social Media.

General Motors, the world's largest vehicle manufacturer, has decided to pull the plug on its paid Facebook advertising, and instead will concentrate on developing and adding content to its free brand pages.

This will be seen as a significant move, as GM was last year the third highest spender on all forms of advertising in America, with a budget of $1.83billion (£1.14billion).

The company said earlier this year that it wanted to cut its advertising costs by $2billion (£1.25billion) over the next five years.

The Financial Times reports that the move demonstrates the reservations some critics have voiced over Facebook's advertising programmes.

New York correspondent Shannon Bond points out: “Even as companies have developed their free presences on the site, some have been reluctant to commit advertising dollars and ad growth has slowed.”

Media buyers believe Facebook has found it difficult to quantify the returns companies could expect for advertising on the site.

An anonymous media buyer told the FT: “Facebook hasn’t stumbled yet upon a truly scaleable revenue generator [whereas] what Google had was an unbelievable revenue engine, which said that if you put this amount of money in, you’ll get this much out.”

The debate was sparked into life on Monday when a blog post from market analysts Forrester Research accused Facebook of not taking marketing seriously, and making it difficult for marketing departments to measure how their campaigns were performing.