At a time when most social networks are still trying to figure out how to make money from advertising, one social network is bucking the trend. LinkedIn, the social network for business professionals, has so much demand from advertisers that it will be launching its own ad network on Monday. In conjunction with ad network Collective Media (which targets high-end media sites), LinkedIn will let other select sites target its users when they visit those partner sites.
Most social networks have a hard time selling ads at more than $1 CPMs (cost per thousand impressions), but LinkedIn’s rate card shows display ads starting at $30 CPMs and going up to $76.50. Text ads range from $12 to $20 CPMs. Even with the regular discounting from the rate card that many advertisers might recieve, LinkedIn is still doing much better than most social networks. That is because it has a more desirable audience that advertisers want to reach.
LinkedIn claims 27 million registered users. According to comScore, 5.2 million from the U.S. visited the site in July (8.7 million worldwide). LinkedIn claims that the average household income of its members is $110,000, 64 percent are male, the average age is 41, and 49 percent are decision makers. (In contrast, the average Wall Street Journal reader, according to LinkedIn, makes $102,000 per household, is 48 years old, and only 40 percent are business decision makers).
LinkedIn already sells ads against this audience on its own site, targeted by industry, seniority, company size, geography, gender, and number of connections. Now, it will expand that targeting to other partner sites. Publishers will have to apply to become part of the ad network, but LinkedIn will probably try to sign up some of its existing content partners such as the Businessweek, CNBC, and the New York Times.
Whenever someone visits LinkedIn, a cookie will be placed on their browser, which will identify them as a LinkedIn member when they visit a partner site. Personally identifying information will be removed, but members will be grouped into different, targetable categories. As with Yahoo and Google’s similar ad-network targeting, anyone will be able to opt out of this program.
It is becoming increasingly obvious that the social networking game is not just about who has the largest audience, but also about who has the most valuable audience. The dominant social networks like MySpace try to maximize advertising dollars by focusing on the most lucrative geographic markets.
LinkedIn knows it has a valuable audience, and now wants to sell access to that audience to others. Although LinkedIn will always make more money off the ads it shows on its own site (since it doesn’t have to split those ads three ways with Collective Media and the partner sites). Perhaps LinkedIn realizes that it will never become a big enough site on its own to justify its recent $1 billion valuation. (Although employees can only sell shares at a $500 million valuation). This will create incremental revenues for LinkedIn. And for publishing site partners it offers a potentially more lucrative set of remnant inventory that it can throw ads up against.
Is this the future of all destination sites—to become ad networks and sell their audiences everywhere to the highest bidder?
Aha! What a post! Great one!
Update the tools not the ads on LinkedIn {seesmic_video:{”url_thumbnail”:{”value”:”http://t.seesmic.com/thumbnail/3IrKLgtHHV_th1.jpg”}”title”:{”value”:”Update the tools not the ads on LinkedIn ”}”videoUri”:{”value”:”http://www.seesmic.com/video/jnhqSERQXe”}}}
Many of us share similar concerns as you. The truth is LinkedIn says it is not a site to interact with each other, its about friending people you know and using their contacts you maybe able to find someone you are looking for to help you out with something.
Here is a video they made:
http://vimeo.com/1239439
An incredibly smart move. I think you’ll see the web shift strongly in the next year or two to “quality” of audience rather than simply quantity of audience. Fortunately for LinkedIn they have both. :)
Last sentence has a typo “tio”:
“Is this the future of all destination sites—tio become ad networks and sell their audiences everywhere to the highest bidder?”
Just a small note–the URL for collective media is missing a hyphen and leads to a placeholder. It should go here instead: http://www.coll...ctive-media.com
thanks, fixed
Anyone in here success with it?
how does linkedout in focus on the long tail of search? small business and consumer search. is any consumer ever going to use linkedout to do any consumer searching? is any small business going to place an ad in linkedout in search of a consumer? they need to have custom strategic niche vertical offerings for consumers and businesses just to crack the door open on the search ad dollar market. they should become a search engine for anything that has to do with business. plumber.linkedout.com………its a start.
Nice to see advertisers get some value for their $. But I’m also concerned that a useful resource will be turned into yet another ad-blasting portal site that is so buried in ads that the average user will choke like a goat on all the blinking Flash ads!
You obviously didn’t read the post. Did you?
I love it how the picture depicting a typical high earning business decision maker is a white guy. So predictable.
A comment like yours was also very predictable. No reason to bring in race in this discussion.
It must be difficult to always see the world like that. I, like I’m sure 99.999% of all tech crunch readers, just saw a person.
Don’t be hate’in
It will be interesting to see just how valuable this audience (through this approach) turns out to be to advertisers, but intuitively it feels very, very smart.
I’m wondering why it’s taken so long for an arrangement like this to come together?
Great article!
100,000+?!
http://cashtutor.blogspot.com
you would have told thought a site about business would have done this earlier
The comparison to traditional media is bogus. WSJ is a broadcast medium that has hardly any knowledge about its readers that would be demographically significant. They have to pay a lot to get data from surveys and extrapolation. The beauty of social sites is that you know rather well who your users are because they heartly TELL you everything about them – a panacea for marketers.
Seen from this angle, I am surprised that the data shown here doesn’t make LinkedIn rate even better — I would have expected it
this is shill post for the company….i haven’t logged into linked in for ages…now every one of my friend,business contact is using facebook…game over linkedin
you can’t bluff ppl with that high CPM, may be there are some suckers who buy those like, same people who pump out 60k to buy tesla car and next day get stuck on the freeway!!!
Not to long ago techcrunch and others wrote of LinkedIn in favor of Facebook… Guess the proof is in the pudding!
Keep on writing Yahoo of as well… seems to do wonders for a business! ;)
Show me the opt out now. I’m a member of Linkedin for one reason only and that ain’t to generate revenue for Linkedin.
That “one reason” requires that they make money somehow. Better than them selling your information, which their terms of service permits (all sites have this clause), to third parties – no?
I think there will always be a place for linkedin but still baffles me how companies like these get all the funding. To me starting your own ad network would have been one of the thinks at the top of my list from the first few months and then you look at more proactive revenue streams. Ad alone cannot save the likes of Linkedin or FB. There is money to be made however ( just look at europes xing ) but your not going to create a billion dollar company by starting a social network
Did anyone notice what their CPM is?
$30 CPM !!! – Am I wrong or is this pretty desperate / greedy move.
Clearly shows LinkedIn still has ways to go and hope it is not going to be another fail attempt to raise revenue. I mean, this is not pay per click, this $30 per CPM. Regardless of whether or not it is a business site, $30 CPM is pretty dumb.
If you target the whole site, i think you can get $10 CPM but then again your $10 will run out within 2 minutes. Sigh..
lol dude, you obviously little experience in the ad market field. $30 CPM is standard across all of the top destination sites on the net (nyt, news.com, cnet, wall street journal, list goes on). The only way to get that high CPM though is to have a good ad sales team. Small publishers will never see that kind of cash though unless they have a great salesman
Even though $30 CPM is standard across those site, it is still WAY too high. If LinkedIn really wants to create value for it’s advertisers they would go with a PPC model just like Facebook.
Just love it when some moron comes in and thinks he is smarter than everyone else.
Hey Mitch…$30 CPM would be fine for cnet, wsj, nytimes but read the article first, LinkedIn is offering this service for regular members. There is a big difference between offering advertising to regular members and corporate.
Your good sales team talk will not work for non-corporate advertisers. Think about it for a second, do you think LinkedIn Sales Team is going to be calling all their members to try and sell their ads at $30 CPM?
Read the article first before commenting or calling someone else inexperience.
ahhh i love these posts, reminds me of the old days when TC was mainly made up of posts like these. analyzing businesses and whats already proving to be successul is much more fun that guessing what someone thinks is the next big thing based on the current hype.
more posts like this, please!
Watch out Googe
I think that LinkedIn is going to outlast MySpace and Facebook. They have a better, less intrusive business model and it just seems that they keep improving.
http://www.SchoolShift.com
No one said you had to go through school alone.
way to put that spam link in your comment
Beware advertisers. 27 million users and less than 1/3 visited the site in July? What does that say about the quality and loyalty of the LinkedIn audience?
A dirty little secret in this industry are the inflated user numbers. Some reports I have read have said that at least 50% of LinkedIn’s profiles are ‘dead’ (incomplete, outdated and inactive). Yet LinkedIn keeps these profiles active because they generate millions and millions of impressions from organic Google Search – which allows LinkedIn to sell more ads.
LinkedIn wins. Users suffer.
well said. personally, i canceled my linkedin account some time ago as I wanted my anonymity back. I’m sure linkedin hasn’t canceled it the same way i have.
Minh, Comscore’s figures are purely estimates. The latest Nielsen reports show that LinkedIn attracts 10M+ uniques per month. Keep in mind Nielsen only tracks US unique visitors. I wouldn’t be surprised if Comscore is also excluding international traffic.
that is very good traffic in graph, if it is real
Their focus on quality as well as quantity is likely to be successful in the long term. I am also using viadeo.com, a French alternative to Linkedin. As this kind of social/networking website are becoming more and more popular, I am looking forward to see a simple tool to manage them all at once!
But linked in is yet to take off in india.. In bangalore the IT Capital no body uses linked in
and where is the proof of that? There are many head hunters and professionals in India who use LinkedIn these days.
Nobody? You mean Nobody??
Please..If you havent used it., doesn’t mean “nobody” uses it..Every site has its own list of active and inactive users..
For sure their are some dead profiles in Linkedin – however it does not strike me as a place I feel the need to go hang out at every month either. That being said it is super useful to have online – need to confirm that I am who I say I am and that I have some others who will vouch for me – check me out. I don’t have a ton of connections but it has been useful.
What I think is super powerful will be the ability to target market within LinkedIn – for example if you really want to reach out to CTO’s to introduce your product or perhaps if you are from a recruiting firm like semiconductortalent.com and you need some new talent – great way to reach out and a fairly low cost way to do it.
We shall see how it goes – could get interesting.
Cheers – Eric
The very fact that they are still around and expanding is proof that their model works (to a point). The fact is all these sites that offer free services – I bet most use the free versions – the money needs to come from somewhere. Personally, if we have to have ads then at least lets make them targeted and therefore potentially useful.
Much of the new landscape is about making content of all kinds fit for delivery and consumption in the manner in which you want to receive it…so why not ads?
http://www.hurricane1.co.uk
LinkedIn’s real value to marketers is its ability to let marketers interact with high level prospective buyers, not buy real estate on their screen. Sadly, although LinkedIn has the audience, Facebook provides a much deeper ability for marketers to interact with buyers. LinkedIn needs to enable more interaction if they want to remain relevant with a younger, yet maturing, business audience.
the graphic says it all!!! Great numbers!
Its been alittle too long. Finally…
I think all of these numbers LinkedIn is a lot of smoke and mirrors.
I log into LinkedIn maybe once a month. Almost nothing every happens, I hardly get any “connection” requests and it’s done me nothing since I joined. All these numbers they trot out — I don’t believe them. Most people I know use LinkedIn exactly the same way I do.
1B valuation? Those investors are going to lose a lot of money in the next few years, methinks.
@Randy,
You likely get few connection requests because the relationships at LinkedIn are formal, as opposed to informal. FaceBook and MySpace grow at a greater rate than LinkedIn because users of LinkedIn connect with people they know personally, whereas you can “friend” anyone who accepts an offer on FB and MySpace.
This is not to say that LinkedIn is any better or worse than FB (or MySpace for that matter) for networking. It is merely to point out that you wouldn’t “normally” receive connection requests on LinkedIn unless you know the requesting party.
You sure? Am surprised that the number is that high.
Believe the number Col.
That is a very good article. Thank you so much for the information…
The post share link doesn’t work for me.
Doesn’t matter how many pageviews LinkedIN has, or if profiles are not updated often, if they’re running an ad network for Recruiters and B2B advertisements.
Looks like a nice win-win-win-win for Affiliates, LinkedIN, Employers/Advertisers, and Job Seekers/Professionals.
Read more about win^4 at http://www.phil...of-advertising/
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Has anyone had a positive experience with Linkedin ads? I’m thinking about testing it.
It sounds more like LinkedIn is doing exclusive rotation with Collective Media, rather than starting their own Ad Network. Especially since most of the presentation was about who LinkedIn reaches.
Looks like it gives advertisers on Collective Media a great audience, and LinkedIn a bit more revenue. Hopefully they won’t pollute the site with advertisements.
Best,
Justin
anyone in here success with it?
i do not know!
Impressive statistics and more impressive presentation. Wonder if the concept is going to work. The target audience is there but the rates seem on the high side, especially in this economy.
Those charts are interesting. Should be able to increase linkedin’s revenue a bunch!