LinkedIn wants to become a content publishing platform. Will this transformation destroy its value to advertisers and turn it into a Facebook clone?
In the last six months, LinkedIn has made a spate of product enhancements and delivered new ad formats, notably video ads, introduced in October 2012, and SlideShare Content Ads that let advertisers deliver SlideShare presentations into banner space on the site. Another advertiser-friendly move was opening up LinkedIn's APIs, so brands can manage their ads without having to log in to LinkedIn's platform.
"Some of that same capability to share rich types of content, whether SlideShares or videos, we have extended to administrators of company pages," says Meera Bhatia, head of product management for LinkedIn Marketing Solutions. "We're working pretty aggressively to make them available to companies on LinkedIn…and using more traditional ad placement to distribute that rich content."
LinkedIn also allows brands to send status updates from company pages to targeted users across the site.
But LinkedIn doesn't want to be a social networking site for professionals any more. It wants to be a content publishing platform. On April 11, it acquired Pulse, a mobile news app. In a blog post on the acquisition, Deep Nishar, SVP of products and user experience at LinkedIn, wrote, "We believe LinkedIn can be the definitive professional publishing platform - where all professionals come to consume content and where publishers come to share their content."
Josh Krafchin, founder of Clever Zebo, a group of online marketing strategy experts specializing in SEM, SEO, and conversion funnel optimization, says, "What works well with LinkedIn is using it to create content, especially webinars, whitepapers, and other free content, and getting them in the hands of the right kinds of people. You get decent click-through rates and decent sign-ups."
In fact, Krafchin says, LinkedIn's content strategy addresses a problem for B2B marketers eager to catch the buzz of content marketing. "There's such a big push these days to create content. But each individual element is not so trackable, and it can be overwhelming for B2B shops to get stuff out there. LinkedIn is allowing…a merger of my CRM with my content marketing efforts with my direct outreach, delivering a message that's hyper-targeted to an audience I want to be with."
Says Victoria Ipri, a consultant who teaches small businesses how to use LinkedIn and author of "LinkedIn For The Clueless," says one thing that was missing in LinkedIn was the ability to make notes in profiles and track interactions with others. Contacts, introduced in April, solves that problem. "LinkedIn Today, the acquiring of Pulse, and Contacts are all designed to help us better share the kinds of information we want to share with our networks, which is content-related," Ipri says.
Per LinkedIn's Q1 2013 financials, first-quarter revenue of $324.7 million was an increase of 72 percent year-over-year. While each of its three money generators - Talent Solutions, Marketing Solutions, and Premium Subscriptions - grew at around the same rate. The proportional contribution of each was largely unchanged: Talent Solutions represented 57 percent of total revenue in Q1 2013 compared to 54 percent in Q1 2012; Premium Subscriptions' proportion remained the same; and Marketing Solutions' contribution to the bottom line actually decreased slightly year-over-year, accounting for 23 percent this year vs. 25 percent for the first quarter in 2012.
So, recruiting remains by far the most valuable part of LinkedIn's business.
Public companies are like sharks. They need to keep moving and growing. But where is LinkedIn's user growth coming from? And will its need to please new users detract from what made it valuable in the first place?
When it launched in 2003, LinkedIn was positioned as the anti-Facebook, a clean, well-lighted place where professionals could go to be businesslike. A look through the evolution of the interface provided by LinkedIn shows its transformation from a simple, resume-like layout to a multimedia display with a status bar on top that looks…a lot like Facebook.
Ipri says, "When LinkedIn came out with endorsements, I thought it trivialized the entire experience. But some people love it. I think they're trying to develop a banquet of features that work well for everyone. Some people like the quick way of endorsing others, they don't want to write recommendations; other people want to be more in-depth with the way they engage."
Kassidi Warnock, digital content strategist at digital marketing company GrowthWeaver, sees LinkedIn on a similar trajectory as Facebook, for better or worse. While Facebook started out with a young demographic excited about digital media and over time added older and more mainstream users, she sees LinkedIn moving from an exclusive, professional audience to a mass, mainstream group of users.
"The value of LinkedIn originally was in the exclusivity of the network and a tight-knit, professional audience, and it's been diluted to some extent," Warnock says. LinkedIn must attract more and more users to keep investors happy, and then keep these new users interested by adding more and more of the Facebook-y features they're used to while trying to maintain its differentiation. "The sheer number of users on LinkedIn has changed it dramatically and has affected what it's doing."
"We are the only destination with over 200 million professionals," Bhatia counters. But anyone who has watched their old high school buddies track them down on LinkedIn knows that professional networking is increasingly being supplanted by the buddy system.
Says Warnock, "LinkedIn needs to find a way to convince its user base that it still is that professional, valuable network. The reason you go is to be in a professional space."
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Susan Kuchinskas has covered interactive advertising since its invention. The former staff writer for Adweek, Business 2.0, and M-Business covers technology, business and culture from Berkeley, CA.
March 19, 2014