Facebook’s failed IPO largely owed to technical snafus when trading began, but one major reason for the disaster was American automobile manufacturer General Motors’ decision to stop spending money on advertising on that particular site, claiming that Facebook ads were ineffective.
After six weeks, the car concern has changed its collective mind, according to the Wall Street Journal, and is renegotiating a proposal to once again buy advertising space. GM’s decision was spurred on by Facebook’s agreement to let advertisers to use third-party data from outside of Facebook to target its users. The voice of reason behind this momentous decision was New York-based ad sales boss Carolyn Everson, who sidled up to GM CEO Daniel Akerson at the Cannes film festival last month.
The consensus among people in the advertising tech space is that Facebook cheated itself out of untold sums of advertising dollars. Although advertisers love to show their notices to people who visit their websites, Facebook disallowed advertisers from purchasing ads targeting Facebook users based on their activity outside the site, owing to the requirement of using third-party data in this process. Additionally, the word on the cloud is that Facebook attempted to invent new terms for ad buyers, which is generally regarded to be a mistake.