Why Advertising On LinkedIn Isn't Always Effective

Social Media Networks like Facebook and LinkedIn offer businesses new channels through which to conduct marketing and advertising. But how effective are these, really? Ask any SEO or online marketing expert and they will tell you that it's an organic process and it takes time to develop real results. The key is to have good content that turns people into repeat visitors to your website - eventually they will buy.

Really? "If you build it they will come?"

We recently conducted a poll in regards to advertising on one channel (LinkedIn) and the results, while not statistically significant, were interesting nonetheless.

When asked if anyone has placed an ad on LinkedIn, to advertise a product or service, 29% responded that they never even knew that LinkedIn had ads (ouch)! Of those who actually bought LinkedIn DirectAds, 14% spent $1,000 and 21% spent in the range of $30 - $120 for a range of impressions (roughly 2,000 – 15,000 total impressions per company or campaign).

In fact, one respondent's results were very telling. For two identical ads placed on two different channels (LinkedIn and Google Adwords) and for the same length and period of time, their results were as follows:

1) LinkedIn DirectAds:  
- Impressions: 1,923
 - Cost: $13.00
 - Click Through: 0  
- Conversion: 0

  2) Google Adwords (same period and ad content):
 - Impressions: 14,000
 - Cost: $14.00
 - Click Through: 6
 - Conversion: 0

  Their conclusion was that LinkedIn DirectAds is a waste of time and money. Google Adwords placements on LinkedIn were more effective, as they only had to pay for actual clicks (Note: this respondent placed a technical, IT targeted ad).

However, when the ads were for job placement services, or for candidates for specific job postings, most respondents felt that LinkedIn did a better job of delivering. In fact, one respondent had very good results. After spending about $150, they received 15 qualified responses to their job placement ad, and converted 20% of them into a revenue-generating placement.

Almost all of the respondents felt that LinkedIn was not effective for general advertising. For those involved in job placement and related services, however, it was seen as a cost-effective channel generating quality results.

Bottom line:

As with any Marketing, the more effectively you can match your company's message to your marketing channel, the better return you are likely to get on your investment. If you are a recruiter or provide products / services to job seekers, LinkedIn appears to be a viable alternative for your money. If your company doesn't fall into one of these verticals, however, your money would be better spent elsewhere.

This article was written by contributing editor Chris Kauza.

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Comments

Great article.

I've always thought LinkedIn's advertising would be ineffective, and as a result must be overpriced, but it was great to see an example written so clearly.

Thanks.

Posted by: Patrick OMalley at December 24, 2008 11:08 AM

It is a surprise for me to hear that LinkedIn has ads!!! I didn't know that, however, as it has been pointed out, they seemed to be ineffective.

Posted by: Jack at December 25, 2008 12:22 PM

Interesting article and great to see some numbers. I would not suggest LinkedIn advertising is a waste based on these numbers alone. It's about identifying your market and then advertising where those people are... LinkedIn could be a GREAT place to advertise for the right product or service...

Posted by: Alan Underkofler at December 26, 2008 4:00 PM

I'd be curious to see how Facebook adds compared to google adds and LinkedIN adds, any input?

Greig

Posted by: Greig at January 5, 2009 11:41 PM

Great article and good to see some numbers/stats however I dont agree completely.

It really boils down to who your target audience are. I have been running a very successful facebook campaign recently even tho I read that a successful campaign is unheard of. Yes CTRs are low and most FB users dont have credit cards or a high spending power, but there are real conversions and all said and done it all becomes profitable, how profitable? It depends!

In the same way, the linked in ads that I have tapped into a few weeks ago, seems to be working great for me. More than 50% of people I talk to now have credit cards and have a spending power that I am looking for. For some of them, the timing is not right and for others they have different reasons for not buying, however all said and done, my cost per lead on Linked in is $12 and cost per sale is $120 and the product I offer is $499, you do the math.

As I mentioned, any PPC program making sense or not making sense from an ROI perspective is directly dependent on what your service/product is, what is the demand for it and most important of all how well does the PPC website (linkedin, FB etc) help you reach your targeted audience.

Once again, this is a great article with great insight and I would like to leave everybody with one thought, a lesson I have learn over the years. Do not make assumptions based on what you read online, different people have different experiences with different things. Always go ahead and give it a shot, in more than 75% of the instances where I decided to do something even tho there was a lot of discouraging online...... the results were surprising in a good way:)

Posted by: Adil Javed at November 4, 2009 12:53 AM

Thanks, Google Ad is more effective.
Most facebook users are amateurs. If we advertise Games, Beauty products, and like, it might help to increases our sales. The same goes to Linkedin.

Posted by: jack at December 6, 2010 3:00 AM

Thank you for this. Just received a voucher, the minimum CPC is $2.00, which might be worth it? But the $5 activation fee is a real put off.

Posted by: Lucidica at January 8, 2011 6:12 AM

Beware! Don't get caught out by the LinkedIn Ads promotions. - I recommend avoiding LinkedIn DirectAds.

Just before Christmas 2010 I got a $100 promotional coupon emailed to me by LinkedIn to try DirectAds. I had to register my credit card with them for a $5 initial charge to open the account. A few weeks later I checked to see how the ad trial was going and found that over $250 had been taken from my credit card account (in four separate transactions) as the $100 coupon amount had been used in just a few days! I had received no notification from LinkedIn of any of these charges to my credit card.

I have disputed this with LinkedIn and they say that the user agreement says they can charge the registered credit card for any amount at any time !

LinkedIn refuse to accept that the promotion was unclear about charging and they point blank refuse to refund any of the charges. In fact they took a final $48 more after I asked for my credit card to be removed from their system. I never had any trouble like this with Google Adwords or Yahoo Search Marketing.

Don't fall for the marketing hype - save your money and avoid LinkedIn Ads.

Posted by: Scottie928 at January 31, 2011 8:42 AM

I have a question for Dave Taylor...do you know anything about online advertising?

In your anecdotal example above, you compared a pay per impression to a pay per click campaign. If this person had chosen pay per click on Linkedin, they would have spent $0 for the same number of conversions that they spent $14 for on Adwords.

Posted by: Brian at May 22, 2011 2:31 PM

Great post as I was thinking of starting with LinkedIn.

Anyone with success stories?

Posted by: Jason Mills at June 24, 2011 11:38 AM

To be honest you should probably just remove the "always" from your title. LinkedIn advertising is ludicrously, almost embarrasingly overpriced and it really doesn't work all that well for most people I have spoken to.

Posted by: Tim Janice at September 27, 2011 3:36 AM

I have something to say, now that you mention it, but ...

I do have a lot to say, and questions of my own for that matter, but first I'd like to say thank you for all your efforts on this Web site by buying you a cup of coffee!

I do have a comment, now that you mention it!