It's opening its social network of 30 million professionals globally, half of them information-technology decision makers and 4 million of them VP or C-level executives, as a potential sample for business-to-business research. In doing so, it's testing a potential social-network revenue model -- research -- that to some appears more promising than advertising.
The news comes days after the Advertising Research Foundation announced Facebook had joined the group. Facebook is among dozens of networks that Peanut Labs in the past two years has tapped to create a system that uses virtual currency to pay members to participate in surveys and thus profit by selling research subjects to survey firms and marketers.
Facebook is not marketing the custom research and is still focused on advertising as its primary revenue stream. (Advertising is a much larger pool of money than research or e-commerce, so it represents a bigger revenue opportunity, Facebook has told Ad Age.) Its research tools are generally used to measure ad effectiveness: Facebook data can show how many people commented on an ad or passed it along to friends. Another Facebook research tool, called Lexicon, lets people see the most popular topics of conversation on Facebook "walls," one of the ways people communicate on the site.
"We continue to want to help the industry define the next set of metrics for measuring advertising in social media," said a spokesman, when asked about Facebook's joining the ARF.
For LinkedIn, the survey route looks particularly promising, in part because of the network's ability to sort the sample according to specialized areas of expertise, experience, seniority and geography, said Dan Shapero, director of business services.
Delivering the golden egg without killing the goose, however, is crucial. LinkedIn will limit survey solicitations to one per member per month, soliciting via e-mail or network messages rather than pop-ups or other intrusive means, Mr. Shapero said. It also limits participation to B-to-B surveys in part to avoid overtaxing the system or members, he said.
"We're also being completely transparent about the survey length and reward you get," he said. "We will only conduct surveys where we can effectively target the respondents. If we believe a very large percentage of people we reach out to wouldn't qualify, we'll pass on the survey."
Rewards are relatively steep, averaging from 50¢ to more than $2.50 per minute when monetary rewards are used, Mr. Shapero said. But since trials of the system began about six months ago, participation rates have been 15% to 20%, he said, well above the low-single-digit rates common for many survey efforts. LinkedIn is using a combination of gift cards, charitable donations and opportunities to view survey results as rewards.
Mr. Shapero said he believes the B-to-B survey market is "capacity constrained," which means much research never gets done because of sample shortages. That's why he thinks LinkedIn may be able to quickly establish a dominant market share as well as grow the market.
He declined to say where research is likely to rank among the five revenue streams for the network, which also include advertising, subscription fees for services, job listings and "enterprise solutions." But he said, "We think this will be a substantial revenue line."
Chris Cavanaugh, marketing director-online communities for OTX Research, one of the first firms to use LinkedIn's sample, said one big advantage is a high degree of confidence that the people you're talking to really are who they claim to be. "It's very identifiable, very targetable."
The same is true of Facebook, Mr. Cavanaugh said, "because it started with links to the universities or schools people were from. Having those links to who somebody really is is much more trustworthy."