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More advertisements and sponsored posts will be appearing on LinkedIn, the social network announced in their Q2 Earnings Call yesterday. They will be rolling out their ads API to help marketers promote stories on a larger scale, similar to Twitter and Facebook.
TechCrunch reported that LinkedIn already has an ad API, but it’s currently limited and private. Soon it will be introduced publicly where users can choose how much or how little they pay per day. They can choose PPC (pay-per-click) or CPM (cost-per-1,000 impressions) and develop ad content similar to Facebook.
According to InsiderMonkey, LinkedIn is already considerably more successful than Facebook at monetizing users. With 238 million users, it makes about $5.00 per user annually, while Facebook has 1.15 billion users and makes $0.20 annually. Naturally LinkedIn wants to increase its users without decreasing their annual per cap.
When done right, incorporating more ads won’t isolate users. Tumblr announced increased sponsored stories back in April and hasn’t seen much backlash from users. The posts are incorporated in the news feed, look organic except for a small dollar sign, and aren’t too plentiful to put off bloggers. Overall the interface hasn’t been changed and the user experience is widely unaffected.
Facebook meanwhile, has been testing users to see how far they can go when increasing ads. Most recently, they promised to bring video interruptions to the user experience that will block out the screen for 30 seconds at a time. The revenue will bring in more than $1 million per day per advertiser.
Smartphone owners check Facebook around 14 times a day, so these ads will have to be pretty annoying to make Facebook users cut the cord. That social network has more opportunities than other networks for user interaction with games, chat features and the newly adopted graph search. A year ago people were spending eight hours on month on Facebook, which gives the site a lower risk factor when changing the News Feed.
LinkedIn users, however, check the site less frequently. They go to their profiles to connect with other professionals, read about industry content and scope out potential jobs. LinkedIn would be wise to follow the Tumblr model and incorporate ads that are minimally invasive and relevant to business professionals.
So who would want to advertise on LinkedIn? Businesses that are already active on the network and are looking to continue the discussion on their page would be want to promote their page or group. Large B2B corporations – like the ones LinkedIn has been partnering with privately: Adobe, AdStage, etc. – could grow their reach with large-scale ads.
Do you think advertising on LinkedIn would help you reach your audience better than connecting with people on Facebook? Or is the reach about equal?