LinkedIn Ads launched in January 2011 and, using cost per click (CPC) bidding, allows advertisers to aim ads at users of LinkedIn with targeting options such as: company name, LinkedIn group and job title. Growth for this platform has been relatively slow though (see graph below), and factors such as high initial CPC, outdated interfaces and a lack of analysis tools, might be the main reasons for this. Since I strongly believe this social network can be an amazing platform for advertising, I did an analysis of their advertising offering. I’ve included some stats from SimilarWeb PRO to share with you the traffic stats of LinkedIn, in general, and their ads section in specific.
Page visits growth over the past 22 months for the ‘Ads’ section on LinkedIn
By analyzing the popular pages on LinkedIn, filtering the /ads/ folder, I went back so September 2012 and moved on month by month all the way up to June 2014. I found a very slow growth in traffic, most of it to the first pages in the funnel of campaign creation.
The big jump happened very recently, which correlates with their increase of paid search traffic in the same time period:
SimilarWeb PRO highlighted just how much of an advertiser’s dream LinkedIn is with nearly 3.5 billion desktop visits between Jan 2014 – June 2014. It’s an exciting figure and one that promises to give your ads massive exposure.
The audience’s interests on LinkedIn are also very impressive, especially for B2B products and services:
And of course, it’s no secret that LinkedIn’s geographic spread is very wide:
The minimum CPC is currently around $2 which makes painful reading for advertisers as many will struggle to make a profit on this type of outlay. Add to this the fact that ads on LinkedIn are fairly new, KPIs are not yet complete (should we be aiming for a high CTR? Or maybe it’s getting people to be more engaged with shares and likes?), it’s not easy to optimize such a campaign.
In addition to that, a quick check around the web showed that publishers are claiming the actual CTR for LinkedIn is very low. This means less traffic, less conversions and less revenue. This is putting people off as they see the campaigns as a waste of time and money.
The dashboard served up by LinkedIn could also go through some improvements. For instance, you have to go through several different screens to get a campaign created and if you forgot something, or would like to change something, you have to navigate back and forth 2 or 3 pages. Word of advice – shorter conversion funnels generate higher conversion rate. And let’s face it – LinkedIn should be looking at this dashboard as their conversion funnel.
Another criticism leveled by publishers at LinkedIn Ads has been the difficulty in analyzing campaigns. Lead tracking fails to pay any attention to all important conversion rates, so deciding how to optimize conversions becomes tricky. It’s possible to manually create A/B tests to generate some analysis, but it’s a time consuming event and really irritates me. The ads themselves are also rather difficult to evaluate as advertisers are not informed on which pages they will appear and how they will fit in to that page.
And What Do The Big Ad Network Who’s Been Here For Years Charge?
LinkedIn certainly wasn’t the first ads service launched online and I doubt it will be the last. Let’s have a look on the main ad networks and what their minimum cpc, or even average cpc is:
Google AdWords is the granddaddy of the industry and has been providing online advertising services since October 2000. As mentioned earlier on, they also work on a CPC basis with a mega low minimum bid of $0.01 available which is very tempting for advertisers. Of course, not many people actually manage to stick to such a low bid, but even the average cpc is much lower than Linkedin’s minimum. Forever evolving, they understand and pre-empt their customer’s needs with a level of service which is unrivaled.
Bing Ads (formerly adCenter) launched in September 2012 and is steadily carving out a nice corner of the market for themselves. Their CPC minimum bid is not as low as AdWords, but still very competitive at $0.05. New to the market, they’re ambitious and have their sights set on ruling the roost.
Facebook Ads has been running since 2006 and is responsible for the majority of Facebook’s vast fortune. They run a CPC system and match AdWords in offering a low minimum bid of $0.01. Although decent click through rates (CTR) have taken a long time to establish themselves, Facebook have recently announced that $2.68 billion was generated in advertising for Quarter 2, 2014.
B2B industries probably will have to spend more than $0.01 on a click and Linkedin, which is B2B oriented, could claim that this is a good enough reason for charging a minimum of $2. However, this still leaves the other issues mentioned here, including the lack of optimization tools.
Is There A Future?
LinkedIn Ads certainly has its downsides, mostly driven by the high CPC rates. However, the targeting capabilities are very efficient – users fill in their demographic details when they launch a profile, so there’s no need for guesswork. This careful tailoring means that the clicks generated are of a high quality and does go some way in validating the high CPC rates. LinkedIn also shows signs that there are product improvements planned down the line. For instance, earlier this year they announced their ‘Sponsored Updates’ advertising which aims to target mobile users and help grow their ad business
However, for there to be any real future for the platform, LinkedIn need to reassess their pricing strategy to provide better ROI for advertisers. Other minor tweaks such as making the interface more user friendly and investing in enhanced analysis, will also help to make the LinkedIn’s Ads experience that little bit easier. Otherwise, I feel that LinkedIn are going to struggle to compete for traffic (and revenue) as advertisers will always keep a close eye on their budgets. For now, I feel confident that AdWords, Bing Ads and Facebook Ads are superior services. However, I am going to keep an eye on LinkedIn as it holds great targeting potential.