Facebook's Ad Pitch 'Backfired': GM Insiders

A key reason for General Motors' decision to drop paid Facebook ads: A pitch meeting didn't go so well. Sources tell Reuters that GM met with Facebook honchos in the last few weeks; in the meeting, marketing reps reportedly pointed to the effectiveness of their free pages. The paid ads appeared "kind of meager and perhaps expensive by comparison," a source notes. The plugging of free pages "kind of backfires on them in a funny way," adds an insider.

It didn't help that Facebook is likely to boost paid ad prices following its IPO today. And Facebook's "click-through rate"—how often users click on ads per page view—is actually half the Internet average of one click per 1,000 page views. Google, by comparison, provides four clicks per 1,000 views.