||LinkedIn Pushes Ad Tools
LinkedIn Corp. is beefing up its advertising technologies, offering marketers more ways to target ads to the social network's users and making it easier for big advertisers to connect to its website.
The business-oriented network, which has more than 90 million members, plans to roll out updates for its marketing tools that let advertisers zero in on people based upon job titles, seniority, age and location, people familiar with the matter said.
LinkedIn, which declined to comment, will be wading into an already competitive market where social-networking rival Facebook Inc. is rapidly gaining ground. Last month, more than a quarter of all online display ads in the U.S. appeared on Facebook, according to comScore Inc. By comparison, LinkedIn represented less than 1%.
The moves come as the Mountain View, Calif., company prepares to file paperwork for an initial public offering. Advertising represents roughly a third of the closely held company's revenue, with the rest coming from subscription services and recruiting tools.
While the company has recruited a few big advertisers such as American Express Co. and Hewlett-Packard Co., it remains to be seen whether more will follow suit.
"LinkedIn has a large and growing audience," said David Karnstedt, chief executive of Efficient Frontier, an online marketing firm that helps advertisers place their ads on the Internet.
He expects LinkedIn to take Facebook's cue and slowly wade deeper into the advertising waters to make sure its systems work without upsetting users who aren't accustomed to seeing many ads on the site.
LinkedIn's new tools will come in two parts. It will release an application programming interface that will allow large-scale advertising agencies, which manage and publish billions of ads seen across the Internet, to easily connect to the site.
It is also adding features for its self-serve platform for individual advertisers to allow for more targeting. Before, self-serve advertisers could only target their display ads at members depending on company size, industry and gender.
LinkedIn still needs to get enough eyeballs in front of advertisers to make it worth their while. The latest numbers from comScore show LinkedIn had roughly 26.5 million visitors to its site last month. Facebook had nearly six times as many, and they stayed there longer too.
The average Facebook user spent nearly five and a half hours flipping through user profiles, commenting on photos and playing games. The average LinkedIn user was there just 12 minutes.
Tim Cadogan, chief executive of advertising network OpenX Technologies Inc., said he is pleased with advertisements he has recently been publishing using LinkedIn's tools over the past couple of months. "Our audience is very specific and LinkedIn's network lines up ideally with what we need," he said.
Mr. Cadogan said he likes the ability to present ads to users who recently said they'd been promoted to leadership roles, for example, or fitting a very specific set of criteria, such as showing an ad to someone fluent in a certain language that can work with a specific computer technology. "In advertising, there's usually a lot of waste," he said.
Others have been disappointed with the results of ads running on LinkedIn.
Alexis Tryon tested out an ad on LinkedIn's website for her art dealership, Arsicle Inc., after receiving an email offer from LinkedIn to run $100 worth of ads free if she set up an account. The 24-year-old chief executive crafted an image with some pieces of art from her site along with some text: "Looking for some original art you can afford?"
"LinkedIn is a population of professionals," she said. Most of her New York-based start-up's customers have so far been homeowners just looking to put something on their wall. "I said, hey, this is a group of people that have extra income -- that could be a perfect fit."
Two weeks later, LinkedIn had sent 17 people to her site; not one of them bought a piece of art or even subscribed to her newsletter. Total cost: $400.
"It was extremely surprising," she said, adding that the cost of running an ad on LinkedIn was more than 50 times what she was paying Google Inc., with which she was getting better results.
"If I were selling things, it wouldn't be as much of a problem but when you pay that much for a click, you hope to get some value," Ms. Tryon said.
(Source: The Wall Street Journal, 01/26/11)
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