You can listen to the podcast here.
You can listen to the podcast here.
By Adam Fraser
Another year in the fast moving world of social media and digital marketing is coming to a close.
The pace of change is relentless. The social platforms are constantly changing and the media landscape continues to fragment and self disrupt at pace.
Blogging and podcasting weekly is challenging from a consistency and delivery point of view, but in this environment the topics to discuss are never in short supply.
A few blog posts and podcasts for you to review over the holiday season if you want to ponder the broader trends we have seen in 2016….
We saw Maccas in the USA dump their ad agency of decades and introduce a new incentive driven (and zero margin) business model for the incoming agency partner. Facebook continued to smash their results out the park, Twitter went sideways and LinkedIn got hoovered up by Microsoft. CMO spend on tech is now approaching that of the CIO, and podcasting continues to go from strength to strength. Vine is being sold off by Twitter and Blab and Google Hangouts shut down.
Podcast wise, I had so many great guests on it is hard to select a few highlights, but for variety if you missed any of these, you may want to check out global guests such as Robert Rose talking the state of advertising, Joe Pulizzi talking conferences and Scott Monty talking influencer marketing. Close to home, ex head of digital at Telstra Gerd Schenkel talked digital transformation, Clive Dickens talked the media landscape and Oliver Weidlich talking mobile user experience.
Finally I wanted to thank you for your interest in the EchoJunction blog and podcast. I hope you find it valuable and look forward to continue brining you both in 2017. Your attention and support is never taken for granted.
If you are like me you get overpowered by the amount of sales and marketing technology and tools available – and more being released every day.
So I asked our resident expert on marketing and social media technology, Adam Fraser, how to go about choosing the right marketing and sales tools for our business
For full article click here
By Adam Fraser
A big week for transactions in the MarTech world with SalesForce acquiring Demandware for US$2.8bn, Twitter investing in audio streaming service SoundCloud for US$70m and the big one – Microsoft swooping in on LinkedIn in a deal worth a cool US$26bn, a $US9bn premium on the value based on the stock price prior to the announcement.
LinkedIn has been under pressure from the stock market since its disappointing Q4 2015 results when its share price declined an incredible 44% in a single day. The deal came somewhat out of the blue and has puzzled a number of analysts.
At a price of 7.2 times revenue it is not cheap on any measure. LinkedIn remained loss making notwithstanding its preferred measure of profitability being to add back stock based employee compensation (at which point it became profitable).
Clearly therefore this deal is all about strategic synergy. As well as hoping LinkedIn (with its 400m plus members and exceptionally strong position in B2B) will mature into a profitable stand alone business, the key factor is the way it can help the remainder of the Microsoft product stable.
The most obvious product would seem to be Microsoft’s CRM product (Dynamics). A massive challenge for any CRM system is maintaining accurate contact information – most professionals keep LinkedIn up to date, so by integrating CRM with LinkedIn this becomes an important differentiator against CRM competitors (primarily Salesforce and SAP). Deep and accurate data on this scale is valuable. Other workflow related synergies should also emerge in managing appointments and sales opportunity status – with integration to Microsoft Office also in play here.
There are many other potential synergies, including LinkedIn’s online training business (it recently acquired Lynda.com) integrating with a number of Microsoft’s productivity apps. Jeff Weiner, LinkedIn CEO outlined many ways the companies could work together in his letter to all LinkedIn staff. In particular he noted:
“Think about things like LinkedIn’s graph interwoven throughout Outlook, Calendar, Active Directory, Office, Windows, Skype, Dynamics, Cortana, Bing and more”
For now LinkedIn remains a stand alone service, so don’t expect to see too many changes to user experience in the short term.
In the medium and longer term the potential synergies are certainly there; but the price tag is not cheap and as Microsoft discovered when it bought Nokia – $7.2bn price followed by a massive write down within 18 months – potential synergies don’t always come to financial fruition.
Based on this transaction I would expect to see increased takeover talk around Twitter and Pinterest from here. Interesting and dynamic times as always in the martech world.
By Adam Fraser
LinkedIn has learned a lot about the harsh realities of life as a listed company in the last quarter. Having lost more than 40% in value when it announced its last results, the market received its Q1 2016 results (released end of April) more favourably with the stock bouncing up 15%.
The Q1 results were generally very strong – with growth in revenue, profit and users from the equivalent quarter a year earlier. Importantly there was growth across all areas of the business – Talent Solutions, Marketing Solutions and Subscriptions and the guidance for future quarters was stronger than expected.
In summary a much improved set of results for LinkedIn compared to the prior quarter, with revenue, users and engagement metrics all moving in the right direction. LinkedIn should not get complacent as apps such as Glass Door circle, but it remains very well positioned in the B2B content, network and marketing space.
By Adam Fraser.
LinkedIn, like its distant cousin Twitter, is learning about the harsh realities of life as a listed company.
On the face of it, it’s Q4 results were very strong – with growth in revenue, profit and users. Yet Wall Street didn’t like the guidance it heard for FY2016 growth and smashed the stock down by 44%. Yep – almost half the value of the company lost in a single day. Listed company life may look glamorous but it’s a wild ride. And as Twitter is finding, negative sentiment around a stock price over a long enough period of time can seep into sentiment around the platform as a whole.
It is important to distinguish between weakness in true operating activity versus delivering a lower outcome than the stock market had forecasted. A 44% stock price correction in one day seems perhaps overdone, but there were enough worrying items in a mixed bag of results to justify a sell decision if that’s what you wanted to see. The market in its current mood is selling first and asking questions later.
LinkedIn announced a strong financial performance in its Q3 results, with revenue of $780m for the quarter, up a healthy 37% on the prior year. Unlike Twiiter, LinkedIn is profitable with EBITDA of $208m for the quarter.
If you simply want the key take-outs, here are 10 summary insights:
All in all a very solid set of results for the worlds largest professional network. The stock market applauded the return to strong revenue growth with shares up 9% on the release of results.
The one possible weak spot was the “stable” marketing revenue division – the attempt to decrease reliance on LinkedIn as a pure recruiter platform probably still has further to run.
By Gavin Heaton
Podcasts are one of my newly discovered joys. A well curated list of subscriptions basically means that you can remain up-to-date with your fields of interest independently of the mainstream media. This is particularly useful for topics that are too niche for the media or too controversial – which is why my personal subscription list includes podcasts on the topics of digital and social media, Australian history, and the history of writing and language (often including large amounts of swearing). Full article click here
LinkedIn has hit the acquisition trail again, but this time at serious scale, paying $1.5bn for online education business Lynda.com, its largest acquisition to date and the fourth largest deal in social media history.
Big bickies. And a big statement of intent. LinkedIn is moving directly into the online learning space to extend and deepen its relationship with business executives via an expanded spectrum of services.
I wrote recently about LinkedIn’s evolution from a recruitment related business to the world’s leading B2B content distribution, marketing and networking platform. Its previous acquisitions had made strategic sense and the Lynda.com acquisition is no exception.
Lynda.com is a leading online learning company teaching business, technology and creative skills to help people achieve their professional goals. It has an extensive library of premium video content, spanning hundreds of thousands of videos on a diverse set of professional topics across multiple languages.
The synergies seem obvious and significant. LinkedIn already knows more about your professional life than anyone else. It also has big data showing the types of training and education people have done and how that has impacted their careers. There is no better organisation to target specific online education offerings to a targeted professional audience.
Expect to see ads telling you not only “people in your sector studied [x] diploma” but also “62% of CxOs have completed [presentation skills] training. Here’s a course that may help you progress”. Or “You last did Photoshop training in  – try this diploma to brush up on your skills”. Plus of course raw facts and insights about the training and diplomas required to secure certain career paths.
The sheer scale of LinkedIn on its own brings a key benefit to the Lynda.com distribution capability. Even absent the smart, big-data driven targeting that will come, simply embedding the offering into a platform with almost 350m members will drive growth.
Of course the acquisition of Lynda.com and the expanded data pool LinkedIn will now capture about its users in itself increases its big data capability and further deepens its understanding of its user base. This is valuable across LinkedIn’s entire product range and also enhances its own Economic Graph project which is attempting to “Digitally map the global economy to connect talent with opportunity at massive scale”.
From a macro market perspective, online education is a massive growth opportunity and LinkedIn has secured one of the market leaders. Quite an entrance to a new market sector. In an era of rapid change and disruption to the business world, the need to “always be learning” has never been greater. Forecast to be worth $107bn in 2015, LinkedIn will now be tapping into this growing demand for quality, online education. Even the Whitehouse is jumping on this bandwagon with its recent TechHire initiative, designed to empower Americans with the skills they need.
Strategically, with this acquisition LinkedIn has sensibly stayed very much within its core specialty by broadening its professional development capability and overall value proposition for the world’s executives. Online education provides a synergistic service to offer to its members and relevant additional content to share and distribute. LinkedIn has a good track record for quickly absorbing acquisitions into its core platform, and if done right here, there will be synergistic benefits with other aspects of LinkedIn (recruitment targeting, content, recommendations, skills, endorsements, Slideshare etc).
The price paid – stated to be 10 times revenue – is somewhat eye-popping. Yes it’s a big valuation, no question. But Facebook’s $1bn price for Instagram seemed a lot at the time too (it was recently valued at around $35bn by an analyst). Finance theory dictates that the acquirer that can reap the most benefits should logically be able to pay the most. LinkedIn certainly fits that bill in this case.
This deal makes sense for both parties. As Jeff Weiner, LinkedIn CEO said “Both companies seek to help professionals be better at what they do”.
Time will tell whether the value was bubble-like or ‘bargain of the century’, but from a strategic perceptive it’s another great deal for LinkedIn. Staying focused on its specialised area and bolting on another sensible tangential offering, LinkedIn has further cemented itself as the clear market leader in the B2B social network space.
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:
Its full year results also highlighted some interesting trends:
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.
We work at the intersection of social media and enterprise IT. The worlds of the CMO and CIO are converging and we can help your with your marketing and social business technology requirements.