LinkedIn Makes New Connections

While Twitter got all the buzz last week after launching its long-awaited ad integration plan, LinkedIn has quietly rolled out a new ad platform: sponsored groups.

LinkedIn, considered the most buttoned-down of the social media trinity — Facebook is the third — has attracted sponsors including Qwest Communications, Hewlett-Packard and Intel to a model that combines social networking, editorial content and customer relationship management.

In February, Qwest, working in concert with McKinney, Durham, N.C., rolled out SMB IT Connection, a group on LinkedIn formed expressly to provide small- and medium-size business owners with a platform to discuss IT issues. In March, HP and Intel also jointly launched Small Biz Nation, which is pitched as a resource for small business owners. Other sponsored groups are in the works, according to Steve Patrizi, vp, marketing solutions for LinkedIn.

So far, Qwest’s is the most high-profile of the launches, since the program includes a deal with Bloomberg’s BusinessWeek that entails print advertising plus participation from the title’s editors in group discussions. Cindy Humphrey, vp, business marketing for Qwest’s Business Markets Group, said linking with LinkedIn and its network of 65 million professionals made more sense than trying to start a group on its own. “It’s hard to drive people to your site,” she said, “and we wanted to be upfront about our involvement.”

Qwest’s group has drawn around 500 people; Humphrey said her long-term goal is 2,000-3,000. (Small Biz Nation claims around 2,000.) Qwest’s sponsorship of the group is obvious — there are three Qwest logos on the landing page — but it is not designed primarily as a vehicle to pitch products and services. Instead, the idea is to insinuate the brand into conversations. “Most small business people find information on different topics via peers from word of mouth,” Humphrey said. “Those are difficult discussions to get into.” Doug Holroyd, evp and director of connection planning at McKinney, agreed: “We’re reaching out to a small business person, and they don’t necessarily want to talk to a salesman.”

Despite such concerns, HP has already taken advantage of an opportunity to interject. Patrizi said during a recent Small Biz Nation discussion that the topic turned to tablet PCs, which allowed an HP rep to promote that brand’s offerings. When asked if any group members might suspect an HP plant had initiated the conversation, Patrizi replied that it is possible, though LinkedIn allows users to check the backgrounds on anyone in the group. “We think the real change that social media is bringing to marketing is the rise of identity and the fall of anonymity [on the Web],” he said. “People will be more transparent about who they are.”

LinkedIn, which declared itself profitable in 2007 (as a private company, it declines to further outline its financial situation), introduced the idea of sponsored groups last year. Otherwise, the company draws income from highly targeted advertising (which is based on users’ biographical information rather than behavioral data) and paid subscriptions, mostly from headhunters availing themselves of LinkedIn’s database.

Patrizi said the sponsored group format is a good fit for businesses looking to build long-term relationships with customers, but not for a brief campaign built around a sales goal. “The trick is to establish a community that’s not all about [the sponsor],” he said.

See also:
“Social Media Use Becomes Pervasive”