• by Mark Walsh  @markfwal, January 26, 2011

LinkedIn Wednesday formally launched its pay-per-click, self-serve ad system after being in beta since 2008. Rebranded as LinkedIn Ads, the text-advertising service formerly known as DirectAds mainly expands audience targeting options to include job title, LinkedIn groups and companies. Previously, the platform offered several targeting choices such as age, gender, geography, job function and seniority.

With the new options, the company aims to capitalize on the wealth of professional and work-related data it has from its 90 million members. "We're really focused on helping advertisers reach exactly the audience they're looking for," said Jack Chou, senior product manager at LinkedIn. "No one else has the type of professional data we have and the ability to marry that with the type of targeting capability we offer."

Chou said the added targeting capabilities came as a result of advertiser demand for more specific categories to narrow audiences. Intelliworks, for instance, which sells a software-as-a-service platform for higher education clients, wanted to be able to run ads focused on LinkedIn users with job titles like "enrollment counselor" or "admission officer" to better reach those particular executives.

Marketers can now use LinkedIn Ads to target up to 100 titles (among more than 10,000 available) in a single campaign. The same goes for company names and LinkedIn Groups, which are based on industry groups or shared interests. Customers who have launched campaigns with the new targeting options have reported click-through rates three to four times higher than other campaigns, according to LinkedIn.

Advertisers may welcome deeper targeting, but what about users? If an ad hits too close to home, could that be jarring for members? Chou said the company's ad service uses only non-personally identifiable information for targeting purposes. He also said that if a targeted campaign has too narrowly tailored an audience, LinkedIn won't allow it to run. He did not say what that threshold was, however. "It's certainly a way for us to make sure that no single piece of targeted data is personally identifiable with the new targeting features," he said.

Beyond the new targeting capability, the rebranding of the self-serve ad system is intended to signal that the platform is the entry point for advertising on the site. "It's a recognition that this is the default way for any business to do advertising on LinkedIn today," said Chou. The small text ads, which typically appear on the right side and top of user home and profile pages, are sold on a CPC and CPM basis.

Advertisers can set a daily budget (with a minimum of $10 a day) and bid how much they are willing to pay for a given audience. Users can also select a target audience and the system will show a suggested bid range. LinkedIn Ads require a credit card for billing, and monthly invoicing is only provided to advertisers who spend $3,000 per month for two months in a row.

LinkedIn unveils its revamped ad system in advance of a reported initial public offering. The company plans to file for an IPO in the first quarter, according to a Wall Street Journal report earlier this month. LinkedIn had estimated revenue of $200 million in 2010 and online market SharesPost has reported that the company has an implied valuation of $2.2 billion.