The secret sauce behind LinkedIn’s $5bn advertising business
As LinkedIn approaches its 20th birthday in May, we hear how the platform plans to reach 1 billion users and make itself indispensable to B2B advertisers.
As it approaches its 20th anniversary, where is LinkedIn looking for growth? / Gerd Altmann
LinkedIn’s digital advertising business is worth $5bn annually – an especially impressive figure given how recently many of its ad formats launched. But as the peer network approaches its 20th anniversary, it believes there is still significant headroom to find new users and create new advertising formats.
Tom Pepper is LinkedIn’s senior director, EMEA & LATAM. He explains that much of the opportunity lies in the burgeoning recognition of the value of B2B influencers and creators: “There’s a big growth of independent B2B agencies spinning up think tanks and thought leadership and doubling down on B2B creators.
“In 2021, nine out of 10 most successful IPOs were B2B companies, and largely underserved in the world of marketing. They have market caps greater than Coca-Cola, Pepsi and Ford and others. But from the creative talent coming into that world, the ambition and excitement to build these brands in the future, is something we're starting to see taking off.”
To that end LinkedIn launched a number of advertising formats in 2022, including document ads and click-to-message ads. Those formats, which would not work as well outside of the B2B context, are designed to allow creators and companies to share expertise at length and scale. They build upon the launch of LinkedIn's video ads and carousel ads in 2018 – and dedicated ‘Thought Leadership ads’ are currently in beta across the platform.
Pepper cites the example of Juniper, a cybersecurity firm that used LinkedIn’s formats to share information in an authoritative but creative way. He says that when B2B companies present themselves in that way, it marries the best parts of B2C relationship-building with the traditional B2B priorities of lead generation and driving results.
He states that one of LinkedIn’s priorities over the next two years is the development and rollout of metrics that are more suited for B2B businesses. He argues that B2B metrics are still yoked to those of B2C, which too often are just ‘vanity metrics’.
“We think one of the themes this year, and going into next year, will be that there'll be an emergence of measurement tools specific to B2B. [So] how do we solve for longer buying cycles, buying committees, purchasing to humans in their business environment… and it is a different process, which requires different types of tools to help them in that focus on pain point and opportunity.”
He also believes that as employee branding becomes more of a priority for businesses, they will seek to use their employees as advocates and examples on the platform.
For the company itself, LinkedIn is seeing significant headroom for growth in India. It currently has 100 million active users in the country, but believes there are huge opportunities to onboard tens of millions more. Currently on 900 million users globally, LinkedIn believes it will hit 1 billion users within the next few years as a result of outreach and the launch of new products for professionals.
It is also deeply invested in AI tools, the development and deployment of which has been supercharged by parent company Microsoft’s investment in OpenAI. Pepper notes that LinkedIn has had AI embedded within its platform for years, but also stresses that it is a core focus for the company in the near future: “We're looking at the possibilities of how it plugs into the jobs to be done on LinkedIn. So as a platform, we will be experimenting with things like how you enhance your profile, or how you get smart about writing a job description using something like generative AI.”
Pepper says that LinkedIn’s north star has always been around solving the pain points of its users. To that end, its new products like collaborative articles – which allow people to add to and work in tandem on a shared document – are in service of making LinkedIn a destination for expertise.
LinkedIn’s transition from a network of business professionals to a space for creativity is far from over. As the rise of the B2B influencer continues, and as recognition grows about the need for B2B transformation, the platform is poised to cater to its users’ demands.