Senior executives from both sides — including Sheryl Sandberg, the chief operating officer for Facebook, and Daniel Akerson, the chief executive at General Motors–said to have been in discussions to patch-up their relationship, according to a person with knowledge of the talks.
As a matter of fact, GM’s global marketing chief, Joel Ewanick, who was instrumental gave the social media company an embarrassing blow when he said in May that paid ads on the website had little impact on consumers’ car purchases. He said GM would stop placing paid ads there, days before Facebook’s initial public offering.
The person familiar with the matter said on Tuesday that Ewanick and Carolyn Everson, Facebook’s global sales head, met for the first time since the unfortunate split at a June event in Cannes, France. Everson said Facebook is willing to provide GM with better data on how their ads can turn into dollars, as it has agreed to do with other advertisers, this person said. Facebook would not provide any special treatment for GM, however.
Beyond anything, the social media leader is trying to prove its value to large brand advertisers such as GM, who complained there was not enough concrete data that proves the value of Facebook ads.
Apparently, the break-up between the two companies occurred early this year, after a meeting in Menlo Park, Calif., in which Ewanick and other GM marketing executives met with Facebook managers to discuss their concerns. GM wanted more data from Facebook, while Facebook criticized GM’s approach of having multiple firms managing its advertising for the site.
The Detroit-based automaker said it spent almost $10 million on paid ads on Facebook last year, which is just a fraction of GM’s total 2011 U.S. ad spending of $1.8 billion, according to Kantar Media. It is also a tiny share of Facebook’s total 2011 revenue of $3.7 billion, most of which was advertising sales.
Daniel Akerson, CEO of General Motors, which halted Facebook ads over concerns they were not effective. Bloomberg News
A GM spokesman, Greg Martin, confirmed that the automaker had reopened discussions with Facebook about resuming its paid advertisements.
“The discussions are back on,” Martin said, without providing additional details.
There is no hope yet that a deal will be materialized soon, said a GM executive familiar with the discussions. Besides, so far, GM did not make any concrete commitment to return, saying it will engage only if Facebook can better prove its effectiveness, people close to the auto maker said. GM has also been meeting with digital advertising shops, to solicit ideas about ways to create content for Facebook pages and applications.
Finally, the decision by GM to suspend paid advertising did not involve a large amount of revenue, which created uncertainty among other advertisers who were trying to determine how to best use the site: continue to pay for advertising on Facebook or invest more in creating content like videos for branded pages.