Tagged: eMarketing

LinkedIn Ads: Are They Worth Paying For?

SUM was recently offered a $50 advertising credit for LinkedIn and, eager to increase our presence on the most popular business networking site on the planet, we decided to give it a shot. We have managed multiple ad campaigns using both Google Adwords and Facebook, but we had yet to try LinkedIn and were very interested in how their performance would stack up. 

The Good

Seemingly, LinkedIn has a lot going for it in the way of advertising; especially if you are selling less traditional, business-to-business products or services. The advertising platform gives you complete control over which users and companies see your ads. You can show different ads to different demographics by adjusting the filters, shown below.

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Each category can be broken down by multiple factors, giving you a huge number of target combinations.

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Also, the pricing is customizable and fairly reasonable. LinkedIn offers both CPC (Cost Per Click) and CPM (Cost Per Impression) ads, meaning you can choose to pay for only the ads that are clicked on or pay for every ad that appears on someone’s profile, in batches of 1,000. While there is always disagreement about which model is best, we have had good experiences with CPC using Google and Facebook, so we opted for that strategy. We are currently paying $2.13/click, definitely within the industry standard.

The Bad

The results of our campaign, I’m afraid, are quite grim. When using the CPC model, the metric of success discussed most often is the CTR or “Click Through Rate.” This rate is calculated by dividing the number of clicks your ad receives by the number of impressions your ad generated. For example, if your ad was viewed 1,000 times and was clicked on 10 times out of that 1000 views, your CTR would be 10/1000, or 1%. This seems low, but for some Google campaigns where ads are viewed thousands or millions of times per day, a 1% CTR can really add up. 

There is some variation when it comes to the average CTRs of Google, Facebook, and LinkedIn, but generally Google comes in first with a CTR of around 0.4%, Facebook is second with a CTR of 0.051%, and LinkedIn is last with a CTR of 0.025%. The internet average CTR is 0.1%, so Google is really the only player performing consistently better than the average internet ad. Now, there is a lot of variation based on the type of ad, the target market, and many other factors, so these are just high-level averages. 

Here’s the bad news: Currently, our LinkedIn campaign has a CTR of 0.00%. Yep, you read that right – ZERO percent. And of course, the argument could be made that we don’t have a compelling offer or our images aren’t interesting enough, but we did A/B testing with various images and copy to counter this. We also researched LinkedIn advertising best practices before launching our campaign. As the weeks went by and the clicks remained absent, we adjusted our copy and our images in hopes of grabbing someone’s attention, but to no avail. The evolution of our ads is included below. As you can see, towards the end, desperate times called for desperate measures.

We started with simple and informative ads to establish a baseline measurement.

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After a few weeks, we didn’t have any clicks so we went to plan B. A few LinkedIn gurus suggested posing a question in the headline. So we tried that…didn’t work.

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After about a month, it got downright silly.

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So after one month, our ads had generated more than 5,600 ad impressions and not a single person had clicked on one. After letting those numbers sink in and giving it some thought, I have 3 possible conclusions:

  1. We are actually terrible at marketing.
  2. There is something wrong with the functionality of the campaign (i.e. links are broken, measurement isn’t working, etc.)
  3. LinkedIn is horribly underperforming and, fundamentally, not a good advertising platform.

For the sake of our business and our egos, I’m going to dismiss number 1 immediately. Not because we are God’s gift to marketing or anything, but because we have had very positive marketing results with both Google and Facebook ad campaigns in the past. Number 2 is definitely a possibility, but impressions seem to be reported accurately and reliably and we have checked the links again and again and they never fail to open. If it were a technical issue, it would be a bizarre fluke and I would hope their tech or advertisement departments would have caught the mistake by now. Which brings me to number 3 and my estimation of why LinkedIn is failing so miserably. 

The Diagnosis

One of the fundamentals in marketing is evaluating a target’s buying mood. If I sold health insurance policies, I wouldn’t stand outside a grocery store to promote my business. Do the people shopping need health insurance? Sure. But there’s no way that I’m going to convince someone to purchase a policy from me if they’re just dashing into the store for a gallon of milk. They are not in the right buying mood, even if they are my exact target customer.

This is what I think is happening with LinkedIn. People turn to Google for answers and information. If they are actively seeking a solution that your business provides, they type their keywords into the search box, which triggers your ad and…presto! They click on your ad and you’re in business. People are in the mood to be sold to, so they are more likely to click on ads that appear. And while Facebook cannot replicate this model, they are able to rely heavily on testimonial marketing, so their ads are relatively successful. 

Unfortunately for LinkedIn, their website does not fundamentally work with either of these marketing methodologies and I believe this is why they’re falling behind when it comes to CTR. When users are on LinkedIn, they are interested in checking up on colleagues or updating their professional information. Often times they have a purpose or directive when on the site and it rarely involves buying anything. If they are looking for solutions, chances are they’re scoping out potential people to hire, rather than paying attention to the ads that pop up on their page, even if they are relevant to their company’s needs. They are not in the right buying mood.

Prognosis

Luckily for us, we didn’t have to pay for any of this. If we had been paying, I would be getting in touch with an account manager at LinkedIn instead of blogging about it. But because we’re conducting this experiment for free, it has actually yielded a lot of value…just not the kind of value we were looking for when we set out. What this month of testing has done is help confirm our suspicions about online advertising:

  1. Online advertising is a total numbers game. In order to reach any significant number of people, you have to be making hundreds of thousands of impressions a month.
  2. If you are going to pursue an online campaign (which we are not in any way advising against), there are definitely some rules you should follow, but a lot of success involves trial and error. 
  3. The best in the game is still Google, but there’s definitely room for Facebook, depending on the product.
  4. LinkedIn is not a site that gets the buying juices flowing, so we think your time on the site will be better spent posting relevant articles and cultivating long-term relationships with colleagues and industry leaders.

So is LinkedIn worth paying for? Well, it depends. If you use the CPC method, you only pay when you actually receive clicks, so you don’t lose anything if your campaign fails, other than your time.

If you are still keen on trying LinkedIn advertising, start with a few ads and monitor how it goes. We would recommend never paying by impressions because LinkedIn just doesn’t seem to get users in the buying mood, so you’ll probably end up wasting money on impressions that don’t actually leave much of an impression at all. LinkedIn is a great tool for many things but this experience has shown us that directly advertising to customers may not be one of them.

We’ll keep trying different combinations of images and copy and if things turn around, I’ll be sure to let you know. If anyone has had more luck with LinkedIn advertising, we’d love to hear about it! Write about your story in the comments section below and let’s get the dialogue going!