By Adam Fraser
LinkedIn has come a long way from its origins. What began as a largely text based, pseudo job board has morphed into the prime B2B content distribution, marketing and networking platform in the world. Yes recruitment is still part of the story but there is so much more there if you look under the bonnet.
LinkedIn started out in the living room of co-founder Reid Hoffman in 2002, going live in May 2003. It’s the world’s largest professional network with more than 347 million members in over 200 countries and territories, and over 6m members in Australia (almost half the Australian labour force). Its website has a nice visual showing user growth since its inception. The pace of recent growth is impressive; having taken over 7 years to reach 100m users (in late 2010) it hit 200m in mid 2012 and 300m in late 2013.
With more than the 90% of white collar professionals signed up to LinkedIn in some mature markets, it is almost ubiquitous in many professional sectors. Across the board it is the 14th most popular website on the planet.
Less fashionable and talked about than its consumer focused peers in social media, LinkedIn is a financial powerhouse. Its full year 2014 results showed revenue of $2.2bn and EBITDA (fancy accounting term which is a good proxy for operating profitability) of $592m . Nice (as a comparison note Twitter’s equivalent numbers in 2014 were revenue $1.4bn and EBITDA $300m ). It is forecasting revenue of close to $3bn in 2015. That’s a healthy clip.
LinkedIn listed on the NY Stock Exchange in May 2011 and its stock price doubled on day one. People were concerned about over-valuation as it ended day one a $9bn company. Its market cap today is now over $33bn.
So how is LinkedIn now making money? It has 3 primary revenue generating divisions:
- Talent Solutions (recruitment related products and services) – 57% of revenue
- Marketing Solutions (sponsored posts and advertising) – 24% of revenue
- Premium Subscriptions (individual subscription packages) – 19% of revenue
Its full year results also highlighted some interesting trends:
- It now has 3m active jobs listed on the platform
- 70% of its members come from outside the USA – it is a truly global platform
- Over 1m long form posts per week are now generated on its publishing platform
After initially opening its native blogging/publishing platform in October 2012 only to influencers such as Richard Branson, Bill Gates and Barack Obama it opened this platform more broadly in February 2014 with great success. Whilst I have previously written about not building your media house on rented property, as a driver of awareness (and hence potential traffic back to your own mothership) LinkedIn’s publishing platform (and enormous audience) is of significant value.
In the past couple of years, LinkedIn has sensibly bolted on acquisitions which have both strengthened its core offering and diversified its range of services.
In July 2012 LinkedIn acquired Slideshare, a sharing platform for business documents, videos and presentations. In a honeymoon period for content marketing, this was a very important strategic bolt on. Slideshare is now the world’s largest community for sharing presentations and other professional content. Often over-looked, there are a number of ways businesses can use Slideshare as part of their B2B marketing. This is an important content discovery platform and should be a key consideration for any B2B content marketing strategy.
In April 2013 LinkedIn acquired Pulse, boosting its capability in publishing, content curation and content distribution. This has been seamlessly and effectively integrated into the LinkedIn platform and provides further compelling reasons for professionals to “check in” and spend more time on LinkedIn.
In February 2014 data-matching job search start up Bright.com was bolted on, removing a potential competitor and boosting capability in LinkedIn’s core recruitment value proposition
In July 2014 LinkedIn acquired Bizo, a company that helps advertisers reach businesses and professionals. Bizo offers targeting and analytics for display and direct response ads. Significantly this gave LinkedIn a chance to expand its reach (and associated marketing offerings) to platforms beyond LinkedIn itself. As alluded to it in its own blog announcement on the acquisition, it also enhanced LinkedIn’s analytics and targeting capabilities. Bizo has more than 2000 publishing partners and is now fully integrated into LinkedIn’s platform.
There was a key strategic game changer in the Bizo acquisition and integration. As stated in the LinkedIn blog (bold is my emphasis):
“Today we also extend our reach beyond the LinkedIn platform with LinkedIn Network Display, an audience network which gives brands the opportunity to engage professional audiences with display advertising both on LinkedIn and off-platform across thousands of publisher sites on the web.”
Pushing the ever-present privacy concerns to one side when looking at social media targeting and big data, this is an important and significant expansion of LinkedIn’s reach. Thoughts spring to mind re the Google framework – where ads appear on many properties beyond its own via the google display network. LinkedIn is expanding its tentacles beyond its own site, but utilising its proprietary data on its users. It doesn’t take too much imagination to start seeing your LinknedIn identity becoming your de facto digital id, driving content and ad targeting on many online properties outside of LinkedIn.
What next? LinkedIn is looking at the possible launch of an intranet service for businesses. A move into content recommendation, marketing automation or even CRM isn’t that big a leap. It is moving from a position of strength.
In terms of marketing the conclusion is inescapable. When you are thinking B2B marketing you simply have to think LinkedIn (and Slideshare). The fact that it was never “fashionable” actually works to LinkedIn’s benefit. People were never there because it was a cool place to hang out. They were there for business. And unless LinkedIn scores some major own goals they are unlikely to be leaving any time soon.