Special Bulletin February 2012
LinkedIn advertising is a superb way to target individuals based on their profile, job, location and interests. It allows the placing of a Pay Per Click advert within the profile of your targets. Unfortunately, unlike Google AdWords where the minimum spend can be as low as 30p, LinkedIn's minimum advertising spend is £2.
Now let's consider an example:
I might sell a software solution to small businesses or the SOHO environment where a trial or demonstration edition is downloadable from my website. If the user likes what they see then they can buy using their credit card. Let us for the sake of this exercise say that I am selling this software for £200. Not a bad business model you might think.
The goal of every web-based solution provider is to achieve the 10%/10% benchmark. That is, 10% of my visitors download a demo and 10% of them purchase. While this may sound achievable numbers it does mean it's only a 1% conversion rate. Hence I need 100 visitors to achieve each sale. Now if LinkedIn traffic costs me £2 that's a cost of sale of £200. If Google Adwords costs say 40p then my cost of sale is £40!
I can make a living out of Google but LinkedIn is cost prohibitive.
Taking that model if I have a sub £1,000 sale then LinkedIn is likely to be very cost prohibitive.
A suggestion to LinkedIn would be to reduce the minimum spend rate to 50p on a trial basis (which would still position it at a higher rate than Google AdWords, so as not to devalue their reputation). Publicise this online to their existing user accounts and see if there is a sales uplift. A great way to incentivise those businesses with smaller budgets to use LinkedIn Advertising to a greater extent.
