LinkedIn Ramps Up Content In Pursuit of Ad Dollars

'Sponsored Updates' in User News Feeds Are First Content-Marketing Ad That Will Be Offered at Scale

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LinkedIn is in the midst of a transformation from a place to deposit resumes into a media property chock-full of inspiration and advice from tycoons like Richard Branson and Bill Gates. But have marketers taken notice?

LinkedIn's ad revenue was $74.8 million last quarter, comprising just 23% of its total and leaning on traditional display and custom sponsorships. (The bedrock of its business is its tools for recruiters, which accounted for 57% of revenue.) Now the company is out pitching brands and agencies on its transformation into a content-marketing platform, including its pilot test of "sponsored updates," its rendition of native ads that appear in users' news feeds.

Posts by Sir Richard Branson. Premium content is the tide that LinkedIn hopes can lift its ad business to new heights.
Posts by Sir Richard Branson. Premium content is the tide that LinkedIn hopes can lift its ad business to new heights.

While these ads -- the first the company has delivered to smartphones -- are still nascent, LinkedIn has lofty ambitions for the revenue they can generate. It's hoping that a content-rich news feed, fed by its stable of "influencer" columnists, will increase user engagement and create demand among marketers to have their messages there -- targeted, of course, at the data inherent in LinkedIn profiles.

"Now because people are reading articles and sharing updates, the [news] feed's become very liquid," said LinkedIn's senior VP-global solutions Mike Gamson. "Into that liquidity, an advertiser has an opportunity to suggest a story that might be interesting."

LinkedIn has made various moves over the last year to bolster its standing as a content-marketing platform. There's its introduction last October of the influencer program, where the likes of Mssrs. Branson and Gates and other business leaders post on topics like advice for the class of 2013, as well as its $90 million acquisition of the mobile news-reader app Pulse in April. And going back to 2011, there's LinkedIn Today, which combines algorithms and editorial curation to serve up a set of news stories tailored for individual users when they visit the site.

While site visits are up significantly from last year, there's still not any conclusive evidence to show that users are reading more. Per ComScore, there were 52.1 million unique visitors to the site in May, up from 37.6 million a year earlier, but average time spent was 20.6 minutes in May, essentially flat from 20.9 minutes a year earlier.

"The question is: how long is it going to take before this can really impact their [ad] revenue?" said OMD's social-media director Colin Sutton. "And I think it's going to take some time."

LinkedIn has a sell to make based on the notion of slotting ads in users' news feeds alongside self-improvement tips by billionaires and white papers posted by professional contacts. Even if that proposition doesn't immediately deliver more ad revenue, its content play is still a boon to its other business. For example, more people signing in daily to check their feeds makes the site more valuable to recruiters.

But as the company pitches marketers on its engagement and reach metrics, it's still contending with its own reputation, as well as high monthly minimums to enter a campaign, according to Peter Fasano, senior VP at Social@Ogilvy.

"When we go and present a concept to a client, the typical perception still is that it's a careers network," he said.

LinkedIn now appears to be following a monetization path tread by Facebook. Similar to how Facebook introduced "sponsored story" ads generated from organic content, LinkedIn is urging brands to develop unique content for their company pages. The newest phase is unveiling an ad unit to let them promote that content to a wider audience in the news feed, according to Jon Lombardo, General Electric's leader for its social-media center for excellence.

GE is among the brands to have tested LinkedIn's sponsored updates, and Mr. Lombardo noted that the marketer is gradually cranking up as its ad spend as it posts more content on LinkedIn -- everything from Thomas Edison quotes to webinars across its various company pages.

"When we produce great content, we want to use sponsored posts to make sure people see it," he said. "It's the model everyone's after at this point."

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