Marketing Analytics

Why LinkedIn Will Suck Up All Your Marketing Dollars—and Why You’ll Like It

By August 19, 2014 No Comments

For a time, marketers didn’t know how to spend their advertising budgets. Newspapers were graves, readers glazed over Internet sidebar ads, and business owners scratched their heads as they tried a smattering of new online marketing tactics—none of which seemed to work. That time has passed.

Ladies and gentlemen, the future advertising breadwinner is not The New York Times (duh). It’s LinkedIn and content marketing.

Of course, content marketers know that the days of advertising in newsprint are over, but it’s interesting to note the measurable shift in how marketing budgets are allocated.

Last month, LinkedIn’s 2014 Q2 revenue report of $534 million in quarterly earnings represented a 47% increase over last year’s second quarter earnings, dwarfing the Q2 revenue posted by The New York Times at $388.7 million, a 0.6% fall from last year due primarily to decrease ad spend.

Specifically notable, LinkedIn’s Marketing Solutions channel—which includes Sponsored Updates, Content Partners, and the professional publishing platform—represents the second biggest chunk of revenue to the online professional platform at $106 million, a 44% increase over last year.

Can you say “hello!” to the new home for marketing/advertising dollars?

Why LinkedIn Will Suck Up All Your Marketing Dollars—and Why You’ll Like It by @jeankspencer

Yep, LinkedIn has quite arguably figured out the solution to the conundrum that’s plagued businesses for years. It’s actually a major milestone at the convergence of journalism, advertising, and marketing, all of which have been grappling for ways to connect with today’s readers like full page newspaper ads did in the 1980s.

LinkedIn’s secret recipe is to target audiences with brand content that’s relevant and useful to them.

This is essentially the definition of content marketing.

And yes, this is the recipe that will capture your marketing budgets for the next two years.

Let’s dive deeper.

LinkedIn Gets in the Game of Marketing

LinkedIn didn’t spearhead the idea of promoted and distributed content, and they’re far from the first to do it. That’s an attribute saved for digital behavior pioneers like Google, DoubleClick (which was then acquired by Google), and even Facebook, who started playing with paid and promoted content in the early 2000s.

But LinkedIn has surpassed these early adopters, and emerged as the most important player in the professional content sharing game.

LinkedIn is home to the largest professional network in the world, making it a juicy opportunity for B2B marketers.

Each of the professional networks’ 300 million users self-organize into industry specific categories, populating the site with personalized data that marketers drool over—like their geographic location, size of company, seniority level, non-profit interests, years of experience, and current job function.

Marketers mine these data fields, slicing and dicing them into manageable segments to communicate with and target.

For example, a B2B marketer could seek audiences as specific as, “senior-level employees at companies with 1000+ employees, whose primary function is buyer.”

By posting relevant content to each of these smaller segments at strategic times, sellers can get in front of people they believe to be buyers—instead of wasting budget reaching people outside of their ideal customer profiles.

This is important to marketers because it drives leads that are arguably more way qualified than any other social media paid channel.

It benefits LinkedIn because content focused on buyer needs and concerns is more likely to drive business results for paying customers, propelling LinkedIn’s revenue with it.

Already, case studies show LinkedIn returns tower over other online paid channels.

For instance,

This is the kind of ROI CMOs can rally behind. And it’s the reason I believe LinkedIn will yank marketing budgets away from Google Adwords and native ads.

However, investing in LinkedIn’s marketing options is just that, an investment, and it comes at quite the cost.

According to Kapost’s Senior Online Marketing Manager and in-house SEO Expert, Chris Boulas:

  • For our keywords, the typical CPC (cost-per-click) for a LinkedIn promoted post runs at $4.80
  • The comparative CPC on Google AdWords is $2.70
  • Facebook undercuts both networks with an average CPC of $1.01

Chris adds that depending on your keywords, it’s not uncommon to see LinkedIn’s CPC as high as $10.00, or 10X the cost of a Google Adword campaign.

This is in part due to LinkedIn’s relatively small sample size of people compared to Google, Chris says. LinkedIn’s smaller user base means competition for their attention is higher, ratcheting up the price per click. But if the quality of these leads is better, it’s worth it.

However, this can cut smaller businesses out of bidding wars with bigger companies, or just be prohibitively expensive.

“Unfortunately, this high cost of entry is keeping small- to mid-sized businesses away,” Chris says. “And those who do wish to participate end up competing for impressions against advertisers with much larger budgets.”

However, for those who can afford to participate in the game, a “strong potential for higher quality exists based on the deeper granularity in targeting options provided.”

In my opinion, if it doesn’t break the bank, make the investment.

Why You’ll Like It

And here’s the kicker. LinkedIn’s quality of connecting sellers to buyers is like Sriracha. A fiery red chili sauce rivaling ketchup as the most popular condiment in peoples’ cabinets? No. Just powerful, and worth it.

Investing marketing dollars into LinkedIn’s content distribution channels in unlikely to disappoint, especially as the company continues to invest its own dollars to improve the quality of lead and revenue delivery. For instance, LinkedIn recently bought longtime partner Bizo, a data software company that’s been helping LinkedIn find the “right people” through digital data for years. The outright purchase of Bizo solidifies LinkedIn’s position in support of content.

Furthermore, Jeff Weiner, CEO of LinkedIn, underscores the company’s commitment to content marketing in a press release with the statement: “We made significant progress against several key strategic priorities including increasing the scale of job opportunities on LinkedIn; expanding our professional publishing platform; and continuing the strategic shift towards content marketing through Sponsored Updates.”

If you’re one of those marketers who’s waiting to see which channel or outlet will give you the best bang for your buck, let this article be a sign. LinkedIn has figured out something powerful: how to connect the dots between businesses, content, and buyers.

Are You Ready to Start Trying LinkedIn’s Paid Promotions?

If you’ve stuck with me to the bottom of this post, first, congrats to you. Second, thank you. And third, I’d bet you’re ready to look into how LinkedIn’s Marketing Solutions can augment your content marketing strategy and deliver quality leads and customers.

If so, I’ve already gathered some important first resources to get you started:

Now make like Sriracha and start burning through that budget!

Jean Spencer

About Jean Spencer

Jean is a Content Marketing Strategist, Cloud & Enterprise at Microsoft, focused on pushing and redefining the limits of what content marketing can be. She also likes to do crossword puzzles and rock climb.