Given the recent Facebook IPO, there has been a lot of talk about its revenue model and the advertising platform that it offers. Recently GM has pulled its Facebook advertising, claiming that it is ineffective. Turns out the timing of the announcement wasn’t a coincidence and that GM and Facebook had a falling out because GM wanted to run “bigger, higher-impact ads” and the social media giant told them “No”.

GM isn’t the only business that hasn’t had luck using Facebook ads, but it just may be the most high-profile company that has admitted that the Facebook ad format wasn’t working for them.

Here’s a look at what others have had to say on the effectiveness of Facebook PPC advertising:

http://www.godfrey.com/How-We-Think/B2B-Insights-Blog/Social-Media/Whats-the-ROI-for-B2B-on-Facebook.aspx

http://marketing.yell.com/web-design/does-facebook-ppc-work-for-b2b/

http://www.socialmediaexaminer.com/should-you-advertise-on-facebook-linkedin-or-twitter/

http://www.salesnexus.com/blog/are-facebook-ads-effective/

http://www.jeffbullas.com/2011/02/25/how-effective-are-facebook-ads/

http://www.inc.com/howard-greenstein/do-facebook-ads-bring-customers.html

http://realtimemarketer.com/facebook-ctr-facebook-ad-effectiveness/

http://www.usatoday.com/money/advertising/story/2012-05-16/facebook-advertising-gm/55028654/1

http://www.adweek.com/news/advertising-branding/report-facebook-ad-performance-abysmal-126285

http://www.business2community.com/facebook/are-facebook-ads-failing-gm-says-so-and-ford-disagrees-0180582

Facebook advertising is initially attractive to advertisers for many reasons. First, it’s where the people are. With more than 800 million users, most of which access the site daily, it’s hard to ignore that Facebook has an audience. Facebook also allows advertisers to target who will see the ad based on very specific demographics and the cost of Facebook ads is much lower than spending money on Google PPC ads. However, that doesn’t mean that it’s an effective strategy.

Some businesses have found success with Facebook advertising, but it is mostly B2Cs since users are targeted based on personal information and interests as opposed to professional information and interests. The general consensus seems to be that overall, it is difficult to determine the ROI of Facebook advertising. Facebook is making a lot of money from its advertisers, but the advertisers aren’t making much money using Facebook ads. In order to keep advertisers happy, Facebook will have to evolve its advertising and business model without ruining its user experience, which could prove to be a tricky feat.

From our experience, Facebook isn’t the right place to spend your advertising dollars. It’s not a place of commerce. People sign in to a Facebook account for personal reasons and aren’t looking to be sold to. Facebook advertising may be cheaper than Google PPC advertising, but that’s for a reason. Google PPC ads are more effective because people go to Google to search for something specific. There is no search being conducted on Facebook. Facebook ads are just like any other form of interruption marketing like TV or radio ads which is why they aren’t as effective. Unless you are a huge company with lots of advertising dollars to spend, Facebook advertising just isn’t worth it at this point.