B2B Payments

B2B Means Dollar Signs For LinkedIn

Last summer LinkedIn announced its plans to build a B2B marketing business worth $1 billion. A decade after proving that its concept — a business-focused social network — could work and with its member count now topping 300 million, LinkedIn is making a play for a piece of the $50 billion B2B marketing sector.

Today, LinkedIn’s B2B push is paying off. Total revenue is up, seeing a 35 percent growth spike in the first quarter of 2015, reaching a $638 million valuation. Analysts are confident growth will continue. New guidance from SunTrust Humphrey Robinson’s Bob Peck estimates the business-focused social network will see top-line growth of nearly 33 percent over the next three to five years, beyond LinkedIn’s expectation to cross the $1 billion mark by 2017.

The first step in reaching the $1 billion goal was the purchase of digital marketing company Bizo in July 2014. At the time, the reported $175 million deal was overshadowed by the headline-making acquisition of Beats by Dre by Apple. In retrospect, analysts now realize how the LinkedIn-Bizo combination put the professional network one step closer to becoming “the most effective platform for marketers to engage with professionals,” according to an internal LinkedIn document obtained by reporters last year. By folding Bizo’s Media Solutions and Multi-Channel Nurturing products into LinkedIn’s marketing solutions platform, the company gained the ability to help marketers target audiences outside of the its own platform, as well as increase targeting and segmentation.

Earlier this year LinkedIn completed the full integration of Bizo’s tools under the LinkedIn umbrella. According to the official announcement, the core product of the improved LinkedIn Marketing Solutions Platform, Lead Accelerator, offers B2B marketing professionals a way to “reach, nurture and acquire professional customers on and off the LinkedIn platform.” To reach audiences outside of its own website, LinkedIn has partnered with AppNexus to serve ads on a network of more than 2,000 other business-focused websites.

LinkedIn is confident business users will benefit from the changes, but analysts also believe the changes have helped LinkedIn grow. Bob Peck sees the now more robust, comprehensive B2B marketing platform as addressing “critical challenges faced by marketers across the sales funnel.” Peck also sees growth potential in Sales Accelerator, part of the revamped LinkedIn Marketing Solutions Platform. The tool, which matches sellers with leads, is expected to help LinkedIn reach its $1 billion goal by generating some $500 million in revenue by 2017. Potential upselling opportunities and extended lead generation options are just two ways Peck sees the Sales Accelerator and other aspects of the Marketing Solutions Platform contributing to the bottom line.

It’s still early days for the new B2B marketing-focused LinkedIn. As of the close of the first quarter, marketing solutions represented 19 percent of total revenue. The figure matches the contribution of premium subscriptions, yet both (even together) pale in comparison to the revenue generated by the company’s job-hunting arm talent solutions, which makes up the lion’s share of revenue — representing 62 percent or $396 million. Many will be watching to see if the marketing solutions can grow to challenge LinkedIn’s bread and butter employment-based revenue.

Some marketing experts believe this is just the beginning. LinkedIn is a dominant force in digital advertising, and in strengthening its position in B2B, there is a chance for industry-wide change. The acquisition of Bizo extended LinkedIn’s reach beyond its own borders. Following the example set by giants like Facebook and Twitter, LinkedIn could use information gathered on its business audience — from current job title to education — to make its digital real estate that much more valuable.


You Might Also Like:

Click to comment


To Top