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August 2012, Vol. 1, Issue 5

Facebook ad spending continues despite big exits

General Motors made headlines this spring when it announced it would stop paying for ads on Facebook. The news fueled discussion in mainstream media and blogs: Were companies ready to abandon the popular social media network? American Apparel, the largest garment manufacturer in North America, also reduced its Facebook ad spending. But it was a gradual decline over 18 months rather than the immediate exit made by General Motors. Ryan Holiday, director of marketing for the Los Angeles-based company, said he had slowly cut ad spending from $1 million a year to a few thousand dollars each month. Holiday cited several factors in the decision to spend less on Facebook advertising. The most notable reason was drastically smaller advertisements on Facebook, which limited how creative companies could be pitching their brands and threatened return on investment. The real attraction: Facebook’s youthful users While some companies are reducing their Facebook ad spending, they are still investing heavily in the social networking site as a ...

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