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Why LinkedIn Ads Are Pretty Worthless
We all know what LinkedIn is, but why are their ads worthless? We all want to make more money online and most of the time it will boil down to running a PPC campaign. LinkedIn being one of the biggest social networks in the world would be one of the best bets to target clients, right? Well I'm going to go over what I've learned about their system and why it needs a huge improvement in order to be competitive with Adwords, Bing Ads, and Facebook.
Let's start with some numbers first...
Linkedin makes around $150 million per quarter when it comes to advertisers paying them for clicks. That sounds like a great deal of money when it comes to PPC but not when you compare it to facebooks $4 billion and Googles even more staggering $18.1 billion each quarter. If you think about it, Linkedin is making around 3% to 4% of what facebook is making each quarter and a measly 0.08% of what Google is making from their platform.
Now we know that LinkedIn isn't as large as both facebook and Google, but with their almost 100,000,000 active users each month and their 400,000,000 user base, they should be making a lot more, right?
So why isn't LinkedIn making more?
It's because their ads suck and so does their PPC dashboard! If you've ever logged into the dashboard to run a PPC campaign on LinkedIn you would instantly know that it's extremely basic and bare bones. You can do some basic text ads... and that's all lol.
Cost Per Click
The CPC setup on Linkedin is basic, and I mean very basic. It doesn't matter what you're targeting, your cost per click is pretty much the same and it's going to be around $2. It doesn't matter how well your ad is set up and how you target, you're going to pay a premium when it comes to advertising on Linkedin.
Let's say you get 1 sale in ever 100 clicks, which is normal, you better be selling something that targets any type of business owner and also profit over $200 per sale. This is the only way you'll profit when it comes to LinkedIn ads, unless you're doing something like an email list building method, but there are much cheaper ways to do this effectively.
Why does LinkedIn not care?
I honestly don't think that LinkedIn cares about updating their advertising platform because they make a ridiculous amount of money from all of their premium members. A premium member is paying between $29.95 to $99.95
Let's say that just 1% of the active people are paying an average of $64.95 a month that would mean that LinkedIn is making around $64,950,000 a month just from it's premium accounts. That's $779,400,000 a year but it's likely to be pretty low if you know how many people are upgrading to premium accounts. I would think that a more accurate number for how many people have premium accounts would be 5% to 7%. This would mean that LinkedIn would be making around $5.5 billion a year just from premium accounts.
For the simple variable of premium accounts, I think this is why LinkedIn doesn't care much about it's advertisers. It's extremely unfortunate for LinkedIn because they could easily compete with Bing Ads since a lot of users would come in specifically for advertising spots.
I've never been a huge fan of advertising on LinkedIn because it's a high risk with minimal reward. It's smarter to advertise through Adwords or Bing Ads since the conversions are much better and you can have a much better ROI. Until LinkedIn revamps it's advertising dashboard, they won't be making as much money as they could through their PPC campaigns. However they don't seem to mind much since they have loads of people paying monthly for premium accounts.
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