LinkedIn Shows a New Direction for Online Advertising Targeting

Today LinkedIn is launching an advertising network of its own that will be sure to add some nice revenue stream to the already quite healthy company. Right now LinkedIn sells ads that various visitors of the network see when browsing the website with CPM rates surprisingly high for the social networking industry - starting at $30 CPM.

The newly launched LinkedIn Audience Network will include some publishing partners that will be able to sell ads on their sites via the network while the advertisers working with this ad network will be able to enjoy a new and very promising approach to advertising targeting. I can imagine that the selection criteria for publishers will be very strict but those that manage to get in will be quite happy about the rates earned on those ads sold via the network.

The main idea is that cookies that your browser receives when you visit LinkedIn will be used to target you better on the publishers’ sites. There will be no personal information attached to those cookies but you will be categorized as belonging to a certain industry and working for a company of a certain size at a certain influence level. Thus advertisers will receive a unique opportunity to target the professionals from exactly the groups they consider to be their target market.

If you are scared of the entire idea of letting some advertiser target you on some website based on the information in your LinkedIn profile, you can opt out of this as well, even though I personally don’t see any problem in letting publishers earn more money when I visit their sites by using some of the information about me that may help them show me the right ad from the right advertiser.

The only problem I see with this ad network is that the size of LinkedIn itself is not quite enough to provide such targeting information for significant part of web population. But if they only include sites that are known to be already used by LinkedIn users heavily (like their current content partners BusinessWeek, CNBC, NYT that are targeted at careerists same as LinkedIn itself is), it will sound like a very appealing idea to advertisers that are constantly looking for new ways to target their prospective customers better.

It is obviously a very wise move for the social network since LinkedIn has a more valuable audience that is ready to spend more money - simply because of demographics of their business-oriented users. And even if LinkedIn does not attract the number of users comparable to that of more friendship and entertainment-oriented networks like Facebook or MySpace, advertisers are sure to be happier about one user ready to buy some goods and services that he needs than 10 users that rarely buy anything at all because they are too young and don’t have the income level to be able to afford certain goods. This audience is exactly what the value of LinkedIn is all about - so using it to its fullest advantage sounds absolutely reasonable to me.