Social media winning the paid advertising channel stakes

In the past year, LinkedIn has been encouraging brands to promote themselves through white papers and thought leaders such as Mike Smith and Richard Branson. LinkedIn CEO Jeff Weiner said the business is transitioning away from traditional ad formats to custom sponsorships.

Following a trial with Adobe, Microsoft, Cisco and HP, LinkedIn has now added “showcase” pages to its suite of custom sponsorships. These pages allow companies to significantly brand and promote content, which also appears in follower’s news feeds.

“Showcase Pages are dedicated pages that allow companies to highlight different aspects of their business and build relationships with the right community. Whether it’s a brand, a business unit, or an initiative, following a Showcase Page will provide you the updates you are most interested in.

Interacting with Showcase Pages is easy. These pages are all about content, so by visiting a Showcase Page you can quickly get up to speed on the latest updates. Like any Company Page on LinkedIn, if you want to make sure you see future updates in your feed, just click the “Follow” button” said LinkedIn on its blog announcement.

The idea is that if more marketers produce more content and develop a following they will be more likely to part with their money to invest in paid promotion.

With this new model now widely available to all, LinkedIn hasn’t seen an immediate uplift in revenue. Promotional revenue accounts for some 25% of LinkedIn’s total revenues. I would be betting that this new model would see that percentage significantly increase.

In the rest of social media land, with Twitter’s IPO, paid ads are back on the agenda. The struggle is that it is not a matter of buying reach. The participation on social media is huge and it is unprecedented: 89% of 18-29 year olds are posting, 78% of their parents are all over social media and so is granny, with 60% of 50-64 years and 43% over 65 years!  (USA figures: Pew Research)

Scale is not the issue, the social media ad model is. LinkedIn has taken a great approach to using content to drive revenue. It seems to have a fair value exchange for both the brand and consumer. Facebook has struggled to drive revenues that match the sheer audience numbers. Interestingly and perhaps in a scary way, they have taken to selling access to an exclusive network of agencies. Facebook is driving billions of impressions that will ultimately drive billions in revenue.

In conclusion, one can safely assume data models and content models look to be the new ad model of the future. The smart marketer will be studying exactly how to take advantage from the new ad model of the future.

Fi Bendall is the managing director of Bendalls Group, a team of highly trained digital specialists, i-media subject matter experts and developers.