State of Social Media 2Q 2015: LinkedIn Resumes Its Dominance

LinkedIn, the dark horse of social networks, has consistently been a slow-but-steady growth play in the past, from revenue to marketing options. Let’s see how the dark horse raced in Q2.

Growth

LinkedIn continues its steady growth to 380 million users; since its divergence from Twitter in Q2 of 2014, LinkedIn has continued to outgrow Twitter and is near parity with Instagram’s audience size.

Revenue

After last quarter’s revenue stumble, which can be seen in both the overall Marketing Solutions revenue percentage change (below in green):

As well as the revenue per user percentage change (below in green):

LinkedIn appears to be back on solid ground. In the above two charts, revenue is not only back on track, but is once again above the trendline (the dotted blue line in the first chart).

Whenever a company runs into revenue troubles, the first option always taken is to grow more revenue as quickly as possible, which tends to change the focus of products, messaging, and service towards revenue driving. This focus can come at the expense of other initiatives or improved experiences. In the Q2 earnings call, LinkedIn CEO Jeff Weiner made mention that they are investing more heavily in the overall user experience now, with solid financials behind them.

Looking Ahead: What Does This Mean For You?

For marketers, one of the interesting remarks was that standard display advertising was declining in effectiveness on LinkedIn properties. CFO Steve Sordello made mention that while Sponsored Updates remained strong, CPM-based display declined 30% year over year. LinkedIn is thus shifting more of its portfolio of marketing solutions away from straight display to native content marketing and its lead generation solution, Lead Accelerator.

What does this mean for us? If you’ve had display ads – either in LinkedIn’s built-in ad platform, or via an ad network/exchange – expect them to continue to decline in effectiveness and increase in cost. Of the many social media ad platforms, LinkedIn’s has traditionally been one of the most expensive on a CPM basis. Look for potentially newer options in native ad platforms and exchanges, if LinkedIn continues to make its inventory available to third parties.

Finally, in terms of overall revenue, LinkedIn’s advertising now only makes up 20% of the company’s overall revenue, which means that they don’t need to cater to the needs of marketers nearly as much as the ad-centric platforms like YouTube, Twitter, Facebook, etc.

What should you be doing on LinkedIn? Unlike other platforms that put advertising above everything else, LinkedIn still gives brands a chance to reach audiences organically, especially with the Pulse Publishing platform. If you haven’t already had some of your employees and influencers publishing content on your behalf in the platform, we recommend you give it a try.

LinkedIn’s newest product, Elevate (an employee-centric content sharing system), is showing early promise to the select few big companies who can use it; if it continues to perform well, marketers at companies of all sizes may get access to it. Having a bank of content already in place will position you ahead of competitors who will have to scramble for things to share when it becomes broadly available.

This concludes our Q2 State of Social Media report; if there are other publicly traded social media companies you’d like us to review in upcoming earnings cycles, let us know in the comments!

Christopher S. Penn
Vice President, Marketing Technology

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