Advertisers and Facebook face an uphill battle. But it could be worth it.

General Motors' decision to invest significantly less advertising dollars in Facebook inspired some to suggest that the world's most popular social network needs to grow up.

By Megan Riesz / May 18, 2012

Facebook increased the size of its initial public offering by almost 25 percent to raise $16 billion. Regardless, some advertising agencies and companies say the social network won't be able to drive up advertising revenue.

Valentin Flauraud/Reuters

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With its initial public offering, Facebook has gotten flak for its advertising scheme, which critics say is “immature.” Although some say General Motor’s decision to stop advertising on the social network won’t have an enormous impact on Facebook’s IPO, the motor company has sparked more debate about Mark Zuckerberg’s company.

Facebook rakes in most of its money through advertisers, the company’s IPO filing confirmed. Last year, 85 percent of its revenue came from ads – about $3.15 billion, some from big-name advertisers including Nike, Ford, and Wal-Mart. But reports say GM wants out after spending about $10 million on the site, not including the $30 million it regularly spends soliciting advertising agencies to create and manage content destined for Facebook.

Some say GM’s decision is indicative of a combination of Facebook’s fad factor, as well as its primitive advertising scheme and fluctuating revenue. The social media giant lost 7.5 percent of its ad revenue in 2012’s first-quarter, and half of Americans think the website is a passing fad. But Zuckerberg and his team have said they are more concerned with staying relevant and connecting users than welcoming advertisers – a business ethic that so far has had positive ramifications.

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