LinkedIn: We're Selling Ads For $75 CPM

John C. Smith said:

To translate, this means that they've sold at least one campaign at $75 CPM. Which I don't actually have a hard time believing if they can target by title, industry, etc.

My guess is that their avg sold CPM is more like $35-40.

And their sell-through is order of 10-20%.

Still think they have a good media opportunity though. I'm only surprised they took so long to start capitalizing on it.

Peter Teel said:

Apr. 30, 3:41 PM

Do I sense some jealousy? You guys could probably get $30, but you would have to ditch that ad ready crap you are running and light a fire under Battelle.

maybe even ditch Federated...

I will have to lay out a short in your site as soon as the Yahoo! drama ends. Henry will struggle to find a new schtick.

The rest of you guys should be able to carry him, however.

good post

Anonymous said:

Apr. 30, 5:03 PM

Nice headline but somewhat meaningless without knowing the volume of impressions sold at the quoted CPM, the duration of the campaign and whether the advertiser re-upped after the campaign.

At the end of the day overall revenue is a more important top line metric to watch than price.

And if LinkedIn can get these types of prices, why haven't they built an ad network around their audience across the web?

Ted said:

Apr. 30, 5:05 PM

Yes, good post. It's important to be reminded that not all networks are created equal. ;-)

Niche is where it's at!

College co-eds and high schoolers, while they join sites in droves, are almost worthless (from an advertiser's point of view) unless you're a youth-oriented brand.

c007km (URL) said:

Apr. 30, 7:02 PM

Actually Ted,

Co-eds and high schoolers are some of the MOST sought after - sure, their income is low, but it is 100% disposable.
-----

Re: average user being 41 and making $110k ... yeah; totally and the average dude in my Jr. high locker room was boning like ten chicks, all at the same time.

Max Gladwell (URL) said:

Apr. 30, 7:13 PM

It's all about having a purpose and the right audience. Other networks can do this or some form of it. I've always been very bullish on LinkedIn. Lots of good rev streams. First-mover. When's the IPO?

Rajeev Goel (URL) said:

Apr. 30, 8:38 PM

The PubMatic AdPrice Index recently showed that the publisher cut for remnant inventory on social networking sites averaged 37 cents in March 2008 (http://www.adpriceindex.com).

To equate that to the $75 LinkedIn number, you would have to make a few estimations:
- publisher's typically keep 60% of the revenue, so if publishers are seeing 37 cents then advertisers are paying 62 cents eCPM.
- convert from remnant inventory to direct sold inventory, which probably means a 3-7X multiple. 5 times 62 cents would get you to approximately $3.

As Michael pointed out, LinkedIn's CPMs are due in part to the highly targeted audience that LinkedIn has. I also suspect that the page views per user session on LinkedIn are far smaller than what they are on Facebook. As a result, the inventory on LinkedIn is much more valuable.

Rajeev Goel
PubMatic

Chris Kilkes (URL) said:

Apr. 30, 8:41 PM

They may be getting $75 CPMs because of their high quality composition audience of affluent consumers, decision-makers, etc. However, these same folks are also extremely cynical and tend to "tune out" ads as most affluent cynical consumers do. So while LinkedIn might get high CPMs at the beginning of a campaign, by the end their CPCs are so inflated by very low response rates they tend not to make it on the next campaign plan. A bit of context always helps when dealing with such PR releases...

Gubatron said:

Apr. 30, 10:09 PM

Wow, somebody's post got crushed by a lot of marketing experts.

Josh said:

May. 01, 10:15 AM

As a longtime LinkedIn user, the avg user demographic stats (41, $110k) seem reasonable to me given the 100+ folks I have in my network and the others I find when doing searches.

In terms of tuning out ads, everyone does that to a large degree. Especially since most ads are crap. Obviously, the more targeted an ad, the better the response. LinkedIn does a pretty good job with this.

Agree $75 is not the real #

Ted said:

May. 01, 10:19 AM

@ c00tkm --

Like I said, if you've got a youth-oriented (read also as youth-relevant) brand like Coke, etc. then yes, the low-(yet highly disposable)income set is highly sought after. And we obviously agree on that, as you basically rephrased my original post on that.

But, again, if you're not relevant to that demographic, they're largely worthless, except perhaps as a means of generating FUTURE demand. But by no means should they be your primary target.

They aren't buying, nor CAN they buy what the LinkedIn set is seeking.

So, put simply, you're better off spending your ad dollars in a network that's a good match for your products/services. Pretty much advertising/marketing 101...

Ted said:

May. 01, 10:24 AM

"However, these same folks are also extremely cynical and tend to "tune out" ads as most affluent cynical consumers do. So while LinkedIn might get high CPMs at the beginning of a campaign, by the end their CPCs are so inflated by very low response rates they tend not to make it on the next campaign plan products/services."

That's very true (and certainly a chapter covered in Ad 101 as well). :-)

This is part of what has driven down the CPMs at MySpace/Facebook. A CPM is only as good as it's CTR/CPA.

Facebook simply HAD to begin CPC. Their original Flyers were selling for $10 CPM, and after the early adopters/experimenters were exhausted (and frustrated), CPC was their only alternative.

Tom Blue (URL) said:

May. 01, 3:05 PM

It seems odd that the UK is lower than the US CPM. Considering how low the dollar is right now in comparison to the pound I find that strange. I agree with John C Smith on the avg cpm too. $75 seems pricey.

Vincent Granville (URL) said:

Aug. 01, 12:01 AM

I did not know linkedIn had ads, other than job ads which cost a flat $150. I visit LinkedIn every day, and have never noticed these ads. CPM might be high, but CPC very low, unless I am an exception.

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