LinkedIn Ads: Pros and Cons

LinkedIn Ads

LinkedIn ads and Social Media advertising as a whole have been picking up steam. With the recent IPO of Facebook and all eyes on its business model and financials, its ads division is getting extra attention as it is the main revenue driver of the Social Network. There have been arguments made on both sides whether advertising on Facebook is effective or not. GM clearly believes it is not, yet other major brands are continuing to invest significant amount of money in it.

LinkedIn Ads have not been getting much attention, yet LinkedIn has quietly been increasing its own ads efforts. LinkedIn Ads aredivided into 2 categories: Marketplace and Premium.  Marketplace Ads are the ”smaller” one that are seen on the right column with a small graphic (50 x 50 px) and a short copy. The Premium Ads are the “larger” Ads that have a picture of you suggesting to follow a particular company. It has also very recently added animated ads to its portfolio. The Premium Ads are reserved for companies with monthly budget of $10,000 – $30,000 per month, and as such are really only accessible to the larger brands. This article will focus on the Marketplace Ads which are accessible to the vast majority. So why would anyone want to consider running LinkedIn Ads? Below is a Pros vs. Cons analysis:

Pros:

• B2B market. LinkedIn is a fantastic tool for B2B companies. Because its demographics is working professionals there is really no other network like it that gives such a great advantage in the B2B arena.
• Exposure to Decision Makers (DM). LinkedIn has over 150 Million users and 45% of them are Decision Makers. That’s 67.5 Million Decision Makers!!! How many of those do you need to make a difference in your business?
• Access to both International and U.S. markets. LinkedIn’s demographic is also highly international. This gives great opportunities whether you are looking to target the U.S. market alone, or the International market.
• LinkedIn Ads can be highly targeted. Even without any targeting your chances of an ad being displayed to a decision maker is almost 1/2; however, LinkedIn does a fantastic job at providing filters to target your desired audience. You can filter by geographical area, by gender, by hierarchy/position within the organization,  by age, by preferences, and even by specific companies. If you know your target market, LinkedIn Ads can define it.
• High Conversion Rates. This one needs to be explained carefully. Here we discuss conversion rates and not Click Through Rate (which actually turns out to be present on the Cons column). Individuals that land on the desired page after clicking your ad are more likely to take the action that you want them to. Whether it is to sign up to receive a white paper, an ebook, a free consultation, or even a purchase, individuals have been shown to be more eager to take action.

Alright, so all this sounds just fine and dandy, so what’s the catch? Well there are a few points that made it to the Cons column, one of which we have already alluded to.

Cons:

• Low Engagement. LinkedIn Ads as compared to other Social Media Advertising platforms have the lowest Click Through Rate. The average CTR on LinkedIn is 0.025% which compares poorly to Facebook’s 0.05% and Twitter’s 1%! Yet this can be compensated by the high conversion rate that we discussed above the in the Pros column, but that really depends on your landing page’s design which is a topic for a completely separate post.
• Cyclical. This one may be a pro or a con depending how you look at it. Activity on LinkedIn is highest Monday through Friday and peaks around mid-week. If you are going to start a brand new campaign we would recommend that you do so early in the week.
• Expensive. Compared to Facebook and Twitter, LinkedIn Ads are expensive. Of course it depends on how you target your ads but you can expect bids somewhere North of $2 per click. But again, if these ads are for B2B companies, those tend to be big ticket items which should yield a high return on the investment. At the end of the day it is the return that matters.

A company cannot be all things to all people. A target market has to be defined. If that target market resides in LinkedIn then advertising makes sense. Our next post later this week will discuss the best practices to create an effective LinkedIn Ad. Until then, please share your experience with LinkedIn Ads, and please feel free to add any items to either the Pros and Cons columns.

b2b, Conversion, Lead Generation, linkedin, linkedin ads, social media, social media advertising, social media marketing, social media strategy