"It has become the fastest growing business in LinkedIn's
history," LinkedIn CEO Jeff Weiner told Ad Age. "And I don't mean
the fastest growing marketing-solutions business. I mean the
fastest growing business, period."
Billion dollar business
LinkedIn's core business is still selling access to its recruiter
database, which costs about $9,000 annually for a single user.
But there are now more than 3.5 million company pages on
LinkedIn, many of which are pushing out a steady stream of content.
The invite-only Influencer program, where Mr. Bergh posted his
screed, now counts about 500 contributors, including President
Barack Obama, Bill Gates and Martha Stewart. The average post from
an Influencer generates 31,000 views, 250 likes and 80 comments,
according to LinkedIn.
In February, LinkedIn began rolling out its publishing platform
to all of its 313 million members. Currently, 100 million people
can publish to LinkedIn, and they're kicking out more than 7,000
posts a day. Since February, traffic to publisher and Influencer
posts has more than doubled. In many ways, LinkedIn is the ultimate
b-to-b publisher without the heavy costs of producing what it
With content reigning supreme in the marketing industry, it
might come as a surprise that there wasn't always enthusiasm for
LinkedIn's content-marketing strategy, especially on Wall Street.
In July 2013, LinkedIn officially introduced sponsored updates,
signaling a broader move away from display ads to a focus on
selling content-marketing products. The company said it wanted to
carve out an ad business that could scale. In September 2013,
LinkedIn's stock price peaked at $253 a share -- and then started a
prolonged slide, hitting $136 in May.
"There was some uncertainty in the market as to whether this
transition would succeed," said Mark Mahaney, managing
director-internet at RBC Capital Markets. "It was one of the
reasons the stock underperformed for six to nine months."
Since bottoming out, LinkedIn's stock has regained nearly 50%,
with plenty of help from sponsored updates. Its advertising
business -- the aforementioned "marketing-solutions" business --
generated $106 million in revenue during the second quarter, up 44%
from a year earlier. After just one year, sponsored updates account
for 28% of the company's ad revenue.
Mr. Mahaney expects LinkedIn's ad revenue -- which was $362
million in 2013 -- to roughly triple in the near future.
"In the next three to five years, this will be a company that
will be generating $1 billion a year in ad revenue."
In the thick of last year's transition, LinkedIn hired Penry Price,
a former top ad exec at Google, as VP-global sales,
marketing solutions, to steer the content-marketing effort. He now
oversees a staff of roughly 600 globally working on the company's
Since starting sponsored updates, LinkedIn has aggressively
rolled out new products, including Direct Sponsored Content, which
allows for greater targeting and personalization, and enlisted
agencies and publishers to pitch LinkedIn to their clients.
LinkedIn also introduced a score to measure engagement of paid and
organic content, as well as Trending Content, which shows brands
the topics certain groups of users are reading. It can tell
IBM, for instance, that IT decision-makers in
a certain geography are reading more articles about cloud computing
this month than usual, according to Mr. Price. "You should be
publishing about cloud computing if you want to engage with this
audience," he said.
And in July, LinkedIn paid $175 million for Bizo, a tech company
that will allow marketers to target professional audiences with
content-based marketing messages on a network of more than 3,000
Business-to-business companies have long relied on LinkedIn's
ability to target and serve clients and prospects with relevant
ads. It stands as the top social-media platform b-to-b marketers
use to distribute content, according to a recent Content Marketing
Institute report. They also rated it the most effective
social-media platform. But the company's transition to a
content-first strategy has caught the attention of consumer-facing
brands. The Content Marketing Institute found that 71% of consumer
marketers in North America used LinkedIn to distribute content, up
from 51% in 2013 -- the biggest increase among social networks.
(Facebook, Twitter and YouTube still rank ahead of LinkedIn.)
Marketers are "talking and asking: What about next year -- what
can we do better on LinkedIn?" said Asli Hamamci, managing
director-senior partner at media-buying agency MindShare. Legal services and
identity-theft protection company LegalShield, which sells directly
to consumers and businesses, considers LinkedIn "foundational" to
its marketing efforts, said CEO Jeff Bell, the former marketing
chief at Microsoft's Xbox and one-time VP at Chrysler and Jeep. "If
initially people were thinking of it as a place for me to post my
résumé, as a place to find a new position, it has
evolved into a much stronger and broader platform," he said.
For brands like Levi's, LinkedIn is more of a reputational play.
Others like Mercedes and Procter &
Gamble use it to market cars and deodorant to LinkedIn's
members, which the social network calls "prosumers." P&G, for
instance, maintains a page for Secret deodorant that shares
articles and videos aimed at inspiring its audience to stay "100%
fearless at work."
Mercedes-Benz launched a campaign over the summer to promote its
2015 C-Class line. "LinkedIn is becoming more and more important
for the digital-marketing mix of Mercedes-Benz as it has highly
attractive target groups and shows a rising, international
performance," a Mercedes-Benz spokeswoman said.
"It's a great platform for marketing, given the relationship
they have with their users," said Adam Shlachter, chief investment
officer at DigitasLBi. "Everyone is a consumer of something."
'Actually pretty boring'
Since the company's founding in 2003, LinkedIn has become the
social network for professionals. Its talent solutions business
generated 60% of its $534 million in revenue during the second
quarter, growing 49% from a year earlier. Advertising contributes
20% of overall sales, but several years ago the company started
noticing trends that would reshape its ad business.
The first was a shift in what people were doing on LinkedIn.
"When we first started as a platform, it was very utilitarian,"
said Jon Williams, head of global agency relations at LinkedIn.
People updated their résumés, looked for jobs and
built a professional network. "Once you have that network, it's
actually pretty boring if it's just updates about my job or I got
promoted or you got promoted," Mr. Price said.