The lessons from LinkedIn’s failed ad network

The social media service for professionals is reaching a critical turning point

If anyone’s ad network should have been a blockbuster, it was LinkedIn’s Lead Accelerator.

It’s one thing to cram ads into something like Facebook or even a traditional media site, which may offer some brand awareness, but not much else. LinkedIn, on the other hand, is almost alone in bringing together a community of professionals that represent the best list any B2B marketers could ever hope to find. And yet, on Friday LinkedIn announced it is shutting down the ad network it had built through the 2014 acquisition of Bizo. It was part of a Q4 earnings report that was so bad the firm lost about 40% of its value the same day.

To some extent, there have been signs all along that LinkedIn would face different monetization challenges than similar social media networks. Have you ever received a sponsored Inmail message? It’s not quite the same as getting spam in your Hotmail account, is it? A lot of people I know have upgraded to LinkedIn premium while job-hunting, but tend to end it as soon as they’ve landed their next gig. There’s income from recruiters, of course, but all those eyeballs updating their own profiles and checking out others — you’d think there has to be a way to advertise successfully in that.

This may be a good reminder that in many cases, ad networks tend to work particularly well when what matters is scale and what’s available is a lot of excess inventory. When you’re cultivating a particular niche kind of audience (i.e., business people), the notion of a “walled garden” that has to vet each ad decision might not seem like a bad idea. At this point, LinkedIn can’t afford to make any mistakes with its user experience, and the death of Lead Accelerator is proof. (For the company’s own take on the issue, read here).

LinkedIn has said it would use the technology behind the ad network to power sponsored posts, making them more targeted and relevant. It may need to do something similar with the way it curates and manages users’ feeds of non-sponsored posts as well. Though I really admire LinkedIn’s push in recent years to move beyond a collection of semi-static resumes to more of a business publisher, its growth has been such that it’s starting to look like Apple’s App Store — filled with so much that I hate it’s hard to find what I like.

If LinkedIn is to thrive (I firmly believe surviving is not an issue), it will have to become a better version of Business2Community, which has become a similar dumping ground for other companies’ syndicated content. After all, all marketers are becoming more focused on storytelling, and LinkedIn still represents a critical mass of audience for a lot of those stories. It may not be as tolerant an audience for ads and other distractions as the rest of the internet, however. That’s a unique dilemma for a social media company: LinkedIn’s future depends on how well it can make marketers successful as clients while not also alienating them as users.


Photography by Associated Press
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Please see a post from LinkedIn Marketing Solutions product lead Russel Glass on the changes discussed in this article –

Monday, February 08 @ 4:17 pm |

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