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Why LinkedIn's Advertising Business Is Booming

  |  July 27, 2010   |  Comments

An interview with LinkedIn's VP of marketing solutions reveals its advertising strategy and its secret to valuable campaigns.

This week, I had the pleasure of interviewing Steve Patrizi, LinkedIn's vice president of marketing solutions. LinkedIn could be thought of as something of a sleeper B2B ad buy, but once you build it into your media plan, you'll be surprised by how well its campaigns can perform. Based on my own agency's positive campaign experiences with LinkedIn, I wanted to learn more.

Hollis Thomases: Give us a quick background on LinkedIn's advertising model.

Steve Patrizi: LinkedIn was not founded on an advertising model. As our audience grew, about three years ago we began thinking about marketing solutions that best utilized the user profile data as a means to target advertising. We now have 70 million members with 3 million new ones joining each month, which is three times faster growth than even last year. We wanted our advertising to provide the same value as the content of the LinkedIn network, which dictated how we've developed our ad offerings.

HT: How did you go about developing these offerings?

SP: Our analysis of B2B marketing led to common recurring themes:

  1. Tools were not as powerful as they could be.
  2. Advertising was not as relevant or targeted as it could be.
  3. Most B2B marketers don't know how to measure all of this stuff.

So we set about to develop solutions that leveraged our assets to address these problems. We have both marketing solutions and advertising ones.

HT: So what kind of offerings do you have? What makes them different?

SP: LinkedIn has developed "something for everyone." On the advertising side, we offer a DIY platform (DirectAds) for smaller budgets (less than $25K) that leverages our unsold ad inventory with simple text-plus-image CPC or CPM-based ads which can be targeted by geography, job function and seniority, industry and company size, and/or gender and age. For larger budgets, we can deliver typical IAB-standard unit display ads with the same kind of targeting options as DirectAds. We also have unique offerings primarily based on changes to someone's profile. For example, we can target career changers by serving ads to anyone who has updated their profile in the past six months to show a new employer. We can also target by geographic change. Another unique ad offering we've developed is LinkedIn Polls.

Besides the advertising option, we can also provide a lot of insights to advertisers. Through our LinkedIn Research Network we can help businesses identify or solve specific marketing challenges. Think about it: we have an email database of over 70M addresses we can sort and send surveys to. We can also do post-campaign analysis using the same technology as "Who Viewed My Profile" to determine the kinds of users (aggregated and anonymized to protect privacy) who viewed an ad. In beta we're testing a "dynamic Group ad," by which an ad is targeted and dynamically-generated based on a discussion going on in a LinkedIn Group.

HT: What kinds of advertisers has LinkedIn attracted and how?

SP: When we launched our first ad offerings in 2007, we had a hunch we'd attract the same kind of advertiser as those in professional publications like the Wall Street Journal, Bloomberg, or Washington Post, and we were right. Our advertisers tend to be in industries like banking/finance, technology, travel but we're also seeing automotive and education advertisers coming on board.

We have sales reps in about half-dozen major regions of the companies who can call on agencies and advertisers plus we've begun to get active sponsoring or exhibiting at major industry conferences.

HT: How are ad sales going?

SP: Ad sales this year have been great! Better than we ever expected in this economy. We have no inventory that demand can't meet.

HT: So what else should the professional media planner know about LinkedIn advertising?

SP: LinkedIn tries to be "easy to buy, easy to sell." We've tried not to over-complicate the process. We use DART. We accept standard IAB units but are open to other ideas. For the DirectAds side, we will soon have agency controls and direct billing. We're working on allowing the use of ad tracking tags and API access. We'll even go into agencies to educate them on how to use LinkedIn like doing profile makeovers and how to use the SlideShare application to showcase presentations. But more than anything, we want media planners to know that we're very respectful of and want agency relationships with good two-way communications.

HT: Thanks, Steve! Keep us posted.

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Hollis Thomases

A ClickZ expert columnist since 2005, Hollis Thomases (@hollisthomases) is president and founder of Maryland-based WebAdvantage.net, an online marketing company that provides results-centric, strategic Internet marketing services, including online media planning, SEO, PPC campaign management, social media marketing, and Internet consulting. Author of Twitter Marketing: An Hour a Day and an award-winning entrepreneur, Hollis is the Maryland 2007 SBA Small Business Person of the Year. Hollis speaks extensively on online marketing, having presented for ClickZ, the American Marketing Association, SES, The Newsletter and Electronic Publishers Association, The Kelsey Group, and the Vocus Worldwide User Forum. WebAdvantage.net's client list has included Nokia USA, Nature Made Vitamins, Johns Hopkins University, ENDO Pharmaceuticals, K'NEX Construction Toys, and Visit Baltimore. The agency was recognized as a "Small Giant" by the Greater Baltimore Tech Council and was chosen as a "Best Place for Business Women to Work" by "Smart Woman Magazine."

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