Expanding its monetization efforts, LinkedIn is launching a new program allowing marketers to create sponsored groups with built-out Web pages that are promoted across the professional's social network.
LinkedIn unveiled the new Custom Groups along with other advertising initiatives the company is rolling out at a breakfast event Wednesday in New York. The moves reflect the company's wider strategy to capitalize on the company's affluent audience of more than 50 million members.
LinkedIn, for example, already boasts some 500,000 groups, with 1,000 being added each day. The rapid growth stems partly from individuals and organizations being able to set up and join groups for free.
With the new custom groups, companies would typically pay about $50,000 a month to turn group pages from discussion forums into something more like full-blown marketing sites, with added content including video, white papers, feeds and other promotional tools that users want to extend to LinkedIn.
As part of the package, LinkedIn would also provide targeted display advertising across its network to help drive traffic to the custom groups. Marketers could also opt to use that advertising space instead for their own existing campaigns and ad creative for other products and services.
"We're opening up the groups area to marketers to have a more established presence on LinkedIn," said Steve Patrizi, vice president of advertising and sales operations at the San Francisco-based company. "We see this as an important way for them to message to their audience."
LinkedIn executives maintain that a custom group can accomplish the same purpose of a custom microsite with the advantage of having a ready-made audience of corporate executives, business owners and other white-collar workers.
Already beta-testing the new groups program are IBM and Intel. IBM's group, co-sponsored by CIO.com and dubbed "infoBOOM," is aimed at technology executives at mid-sized companies. Intel's group is geared to senior IT managers, who may influence corporate technology purchase decisions.
LinkedIn expects other Fortune 500-caliber companies to be the initial custom group clients. Jeremiah Owyang, a partner at digital strategy firm Altimeter Group, however, suggested that brands might balk at the price tag. After all, they can already run a regular LinkedIn group or a Facebook page or group for free.
"A more effective way to do it might be to start with $50,000 as a set-up fee and if it's successful, pricing bands would increase as the group grows," he said. On the other hand, if a company finds the expense isn't worthwhile and pulls the plug on the group after a short time, then it could have a negative brand impact. LinkedIn says it would require at least a six-month commitment for custom groups, and ideally have marketers sign up for a minimum of a year.
But Patrizi is confident that LinkedIn's custom groups will prove an attractive alternative to stand-alone microsites. "Given that these will be deeply interwoven within the fabric of the LinkedIn community, come with natural viral distribution components, and cost less than most of those solutions, we think there will be some interest from a number of marketers," he said.
Owyang also emphasized that brands would have to continue to put discussion and direct interaction at the forefront of promotional efforts on LinkedIn. "The real trick in social media is conversational marketing, not just blasting out corporate creative content," he said.
In that vein, LinkedIn has separately introduced a new ad format that lets companies promote content including video, RSS feeds, blog posts and Tweets in standard 300 x 250 and 160 x 600 display units across LinkedIn.
The aContent Ads feature tabs at the top allowing users to select the type of material they want to see. The new ads can be targeted by the site's standard options including geography, industry, job title, and company size. Vanguard, Cisco Systems and Marriott are on board as pilot advertisers using Content Ads.
In the coming year, LinkedIn also plans to add another interactive format -- Connective Ads -- that will show non-personally identifiable updates from members' news feeds related to the ad content or advertiser. So if it's a Microsoft ad for Bing, someone might see an update from their feed on a friend joining the Microsoft group on LinkedIn or a post related to Bing.
On the analytics front, LinkedIn is also testing more in-depth "engagement reports" that would provide post-campaign information on interaction according to its targeting criteria. Marketers would then be able to see in more detail what types of audience their ads are clicking with.
LinkedIn's U.S. audience in October more than doubled to 20 million from 9 million the prior month, according to comScore. The big jump resulted from the measurement service improving how it tracks Web usage at work, where about half of LinkedIn's users are coming from. Previously, it was undercounting the site's reach.