Sponsored Updates drive LinkedIn’s Marketing Solutions business

Market Realist

Why LinkedIn earnings beat expectations but show a tepid outlook (Part 3 of 4)

(Continued from Part 2)

LinkedIn’s Marketing solutions business shows strong growth

In the previous article of this series, we discussed LinkedIn’s (LNKD) flagship product, its Talent Solutions business. In this article, we’ll discuss LinkedIn’s other important business, Marketing Solutions. In the Marketing Solutions business, advertisers pay LinkedIn for targeted ads on a pay-per-click basis, so this segment competes with Google (GOOG), Facebook (FB), Twitter (TWTR), and Yahoo (YHOO) for advertising dollars. In Q1, LinkedIn’s Marketing Solutions revenue grew 36% to $102 million, representing 22% of LinkedIn’s overall revenue.

As the below chart shows, LinkedIn’s desktop page views have more or less remained stable over the last year. However, the main thing to note here is that this metric doesn’t include page views on mobile devices, which has seen much faster growth than desktop devices. Here are some of the metrics LinkedIn revealed during its earnings conference call.

  • Cumulative members grew 36% year-over-year to 296 million. In April this year, LinkedIn crossed the 300 million member threshold, including 100 million members in the U.S.
  • As measured by comScore, which excludes mobile devices, LinkedIn and SlideShare combined for an average of 186 million monthly unique visitors in Q1
  • Excluding SlideShare, LinkedIn averaged 142 million monthly unique visitors and totaled 11.5 billion page views during Q1
  • When LinkedIn measured these metrics internally, including mobile devices, unique visiting members grew approximately 26% year-over-year and total member page views grew 43% in Q1
  • Since Q1 2012, LinkedIn has seen engagement per visiting member increase more than 40%

Programs like Sponsored Updates are seeing higher uptake

Sponsored Updates  are content-rich promoted updates that enable advertisers to share and amplify content marketing messages to a targeted audience. According to LinkedIn, Sponsored Updates now represent 19% of revenue for Marketing Solutions, an increase from 13% last quarter. LinkedIn’s management mentioned that Sponsored Updates customers are seeing materially improved engagement on their content, particularly on mobile devices, compared to traditional online advertising. Plus, just last week, LinkedIn launched its Sponsored Updates API program with five strategic partners. During the pilot period, the beta customers in the partner program experienced an overall lift of 30% in click-through rates versus prior self-managed efforts.

Continue to Part 4

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