LinkedIn CEO Jeff Weiner wants a piece of the media action. The professional network , generally regarded as a venue for job-seeking and recruiting, has morphed into a daily destination to read, share and comment on news. If it sounds a little like Facebook and Twitter, it is. And so is the advertising approach.
"There is a lot of content. Our job is to package up the most relevant content we can find for members," Weiner said on stage earlier this month at a tech conference in San Francisco.
And people are checking it out. Pageviews have shot up 69% from a year ago. But LinkedIn executives won't call the company a media business. That's because only about a quarter of its revenue comes from ads. Recruiting is still the major revenue source.
But like many other media and tech companies, it is trying to make its mark with native advertising, the hottest trend of the moment for marketers -- and publishers. LinkedIn joins an advertising craze embraced by Facebook, Twitter, Google, BuzzFeed and even The New York Times.
What's at stake is social network ad-spending dollars, expected to rocket from $7.3 billion in 2012 to $14.5 billion by 2015, according to eMarketer.
"People are really going to talk about this with Twitter going public, because Twitter's main ad product is native advertising -- sponsored tweets," says Altimeter Group analyst Rebecca Lieb. That will be especially so during Ad Week in New York City this week as thousands gather to discuss all things digital advertising.
Native advertising generally runs right in the midst of the content stream and resembles it, generally with a reminder that it is sponsored content -- advertising -- to differentiate it. Sometimes the demarcation is clearer than others. Advertisers see this as a much better way to showcase their digital messages than traditional banner ads.
"It's the new darling of online advertising," says Rich LeFurgy, a consultant to online advertising start-ups and former chairman of the Interactive Advertising Bureau.
But native ads have their critics. Some worry that readers will be duped into believing they are reading actual content, not sponsored material. The FTC last week announced plans to hold public discussions in December over the issue.
"The industry is going to step up its efforts on disclosure," Lieb says.
It's easy to understand why. Native ads on Facebook's mobile app say, "Suggested App" in light gray on advertisements to download apps. The smallest, lightest gray text says, "sponsored." It's difficult to read the text. (continued...)
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