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LinkedIn’s sponsored content pivot helps ad revenue hit $154.1 million
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Like seemingly every other digital media company, LinkedIn’s ad business has been making a hard pivot toward sponsored content and away from boring banners. And it seems to be working.
LinkedIn’s ad business — which the business-centric social networks calls Marketing Solutions because jargon — hit $154.1 million in revenue for the first quarter of 2016. That’s a 29% increase year-over-year.
Sponsored content — which includes posts that companies can pay to place in people’s feeds and pin on their own pages — now accounts for 56% of LinkedIn’s ad revenue. That translates to around $86.3 million, having grown by almost 80% over the past year.
On the flip side the “Premium Display” side of LinkedIn’s ad business — banner ads it slots on the right-hand side of its desktop site — continues to dwindle. Revenue from that display ad business dropped by 30% year-over-year to account for around 10% of the division’s revenue, or something like $15.4 million (LinkedIn didn’t give out the actual figures for each ad category).
That’s an intentional paring down of LinkedIn’s display ad business. The company would prefer marketers put their money towards its sponsored content, which can run on desktop and mobile whereas display ads are limited to desktop. After all 58% of the 106 million people that check out LinkedIn each month are doing so on mobile. To that end LinkedIn has started selling those display ads programmatically, which would likely free up its sales teams to pitch sponsored content.
The sponsored-over-standard ad strategy played into LinkedIn’s decision in February to shut down its off-LinkedIn display ad network. At the time the company’s CFO Steve Sordello said that the ad network “required more resources than anticipated to scale.” So instead it’s putting those programmatic resources towards its sponsored content business and has started selling some of that sponsored content to run outside of LinkedIn.
But advertising still remains a secondary revenue stream for LinkedIn. More than half of its revenue — 67% — comes from LinkedIn’s recruiting-and-hiring business, compared to 18% from its ad business.
Overall LinkedIn’s business got off to a good start in 2016 after a tough end to 2015. The company’s total first-quarter revenue topped $861.7 million, 35% more money than it made in the first quarter of 2015. That’s a lot better than the $828.5 million that Wall Street analysts, on average, expected it to make.
From our sponsors: LinkedIn’s sponsored content pivot helps ad revenue hit $154.1 million
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