Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Get Used to LinkedIn Corp (LNKD)’s Sponsored Updates

Yesterday, LinkedIn Corp (NYSE:LNKD) launched its new sponsored updates feature for marketers. The service allows companies to communicate with LinkedIn members they aren’t connected to — and LinkedIn hopes it’s the next step in delivering more ad revenue.

Doesn’t anyone use the term “ad” anymore?
LinkedIn Corp (NYSE:LNKD)’s sponsored updates work in much the same way that Facebook Inc (NASDAQ:FB)‘s or Twitter’s promoted messages do. Customers — in this case, businesses that have a company page on LinkedIn — can now show featured content such as articles, videos, or pictures to specific sets of LinkedIn members that match the company’s desired marketing demographic. In return, they pay LinkedIn on a cost per click or cost per thousand impressions.

LinkedIn Inc.In the first quarter of this year, the LinkedIn Corp (NYSE:LNKD)’s Marketing Solutions division reported $74.8 million in revenue, which was up 56% from a year before. While there’s no guarantee on what the company could add to that number with the new sponsored posts, it should be noted that some heavy hitters such as General Electric Company (NYSE:GE), Mercedes-Benz, The Wall Street Journal, Xerox Corporation (NYSE:XRX) and others have already signed on board.

One particular detail that could help the service gain traction is that when a marketer buys a sponsored update, it can be shown across desktops, tablets, and smartphones — theoretically increasing the impact of the update. LinkedIn Corp (NYSE:LNKD) CEO Jeff Weiner talked about promoted updates — when it was just a pilot program — in an earnings call last quarter, saying that it was the company’s first marketing revenue stream to be offered to scale. He also added that sponsored updates are “a much more efficient and predictable model going forward and scalable model.”

Since Facebook Inc (NASDAQ:FB) launched its promoted posts feature, the company’s seen more than 7.5 million promoted posts, many of which were for small businesses. But incorporating sponsored updates may not be an automatic slam-dunk for LinkedIn Corp (NYSE:LNKD). Facebook was slow to make money with its promoted posts — which brought in the majority of $5 million in non-gaming revenue in Q4 2012. In the first quarter of 2013, Facebook’s quarterly payments revenue increased by 15% year over year but was a result of increased game revenue and less from promoted post revenue.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.