How Does LinkedIn Make Money?

When I’m speaking about LinkedIn, someone in the audience will invariably ask “If we can use free accounts, how does LinkedIn make any money?”

And I mention a couple things: pay-per-use features, the good / better / best strategy of account levels, and advertising.

TechCrunch has just put out a great article explaining why LinkedIn does well in advertising.

Stats, stats, and more stats…

When you want to bring in advertising dollars, you need to show the advertisers that they are reaching the right audience – and there’s no better way to do that than having the details.

This is perhaps the most interesting aspect of the article to me – specific figures on LinkedIn users – and why advertisers want to reach them.

You can check the TechCrunch article on LinkedIn out here.

Would you like a BMW with that?

Ok – the tag above is only partially in jest, but check the figures out for yourself.

And LinkedIn ads are fairly reasonable – your email stays clear, and ads appear in strategic locations around the LinkedIn screen.

An Ad network of their own

So – what do you do when your network influence dwarfs the competition – that’s right, you leave the others behind and start your own ad network.

The TechCrunch article doesn’t mention it, but up till now you have been able to get onto LinkedIn through AdWords (google’s ad network).  I’m expecting that they won’t turn this off on day one, but will give preference to their own ad network clients and continue to fill the unused slots with Google’s and other network ads.

Do you need to reach a specific type of person?

If you’re in advertising and want to reach individuals that meet specific criteria, LinkedIn may be the way to go.  They’ve got the details on the members and you can put your tightly focused ad in front of individuals that you describe.

Sounds good to me…

Too rich for The LinkedIn Personal Trainer…

And here’s my admission – I’ve looked into it, but the numbers don’t work out for the book.  I think you’ll notice a lot of expensive products advertising on the site for a reason;-)

To your continued success – and using LinkedIn to help you achieve it,

steve