LinkedIn Custom Groups = COMPLETE Waste Of Money
By Kipp Bodnar
Fri, Nov 20, 2009
LinkedIn, the extremely popular B2B social network, announced that is was going to allow marketers to create custom groups. The problem: is they want $50,000 a month. Yes, you read that number correctly. LinkedIn wants you to pay them $600,000 a year for a custom group and platform advertising.
From MediaPost article:
“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.”
Why Should LinkedIn Own Your Interactions?
The core issue I have with LinkedIn’s new custom groups feature is not the cost, but instead, it is the exclusivity of content and interactions on one platform. If you are a major enterprise level company, then maybe this service has value for you. However, their major selling point is that they have the built-in community for the group with their 50 million members.
It is great that they have a large user base and it could be a good strategy if a high percentage of your customers are highly active on LinkedIn. However, while LinkedIn has a core of highly active users, it also has a lot of inactive users and single purpose users. Single purpose users include those who only come to the community when they are looking for a job and don’t serve as regular users. Most B2B companies are still going to have a large percentage of their customer base outside of the LinkedIn network. While this is a major issue, the bigger issue for any brand should be: Why do I want LinkedIn to hold my community hostage.
Communities can happen anywhere on the web, but what happens if you decide you want to stop paying LinkedIn $50,000 monthly fee? One of your community hubs, goes away. I would advise to build community in ways that are sustainable for the longer term and not dependent on line items in the budget for their survival.
Community At What Cost?
Given today’s economy and the competitive online environment, I would much rather have $600,000 per year to drive social media and word-of-mouth marketing programs that are platform agnostic. Even spending that much for online advertising and direct marketing would likely yield much higher ROI. It seems to me that LinkedIn has completely priced themselves out of what could have been a good monetization strategy. Don’t forget that once you have spent this money for the customer group that you still have to resource the content and community management of the group, which will boost the overall price tag even higher.
This issue here is that free groups still exist on LinkedIn and when done right, they can serve as a good tool for community building and lead generation. The gap between free groups and custom group in terms of price is huge, but much smaller in value.
What do you think of LinkedIn’s new plan for custom groups?
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Tags: B2B, linkedin, Linkedin Groups, Social Media Marketing
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Great post! This is ludicrous. Can’t you do all the things LinkedIn is hoping to charge you for at Ning… for free?
Thanks for the great post!
- Drew
Good post Kipp. I’ve got to believe that LinkedIn is targetting extremely large companies that a) Don’t know much about social media other then they need to say they’re using it, b) See this as a cheaper and quicker method of starting a community then trying to get a project approved and implemented inside their company using their own IT (I’ve seen this a few times.) or c) Both.
From a business aspect, LinkedIn is great for networking people and finding/filling job positions. That’s about it. They have made consistent decisions that continue to minimize the value of the platform to companies in any other method. While they continue to say that they’ll open their platform up to outside developers and apps, that has yet to be seen and they are still a very closed community.
I agree that no company should ever pay that kind of money to build their community on a site that’s not theirs or that can’t be easily migrated or distributed on other social media platforms. The ROI isn’t anywhere close to justified and companies will be giving way too much leverage to LinkedIn as a middleman between them and their community.
Yes, LinkedIn has the numbers when it comes to business users but they haven’t done nearly as much as they could if they would open up their platform. The recent tie-in to Twitter is a perfect example of LinkedIn realizing that open is better. Status updates on LinkedIn have gone up dramatically since they added the feature. If they want to find ways to continue to monitize the platform, charging a lot of money for little benefit on a closed community is not going to be a viable option.