LinkedIn acquired Bizo in July 2014 with grand visions of making a B2B ad platform. Those visions haven’t panned out.
During its Q4 earnings call Thursday, the company said it would kill off Lead Accelerator, the B2B lead-nurturing product that came out of the $175 million acquisition of Bizo. It was a fast death: LinkedIn launched Lead Accelerator just less than a year ago.
In killing off Lead Accelerator, LinkedIn expects to take a $50 million revenue hit.
The problem with Lead Accelerator? While the idea of a unified ad platform for B2B sounded great, it took “more resources than anticipated to scale,” CEO Jeff Weiner said. LinkedIn saw strong initial interest, he said, but to scale up the product would require more capital and resources than LinkedIn was willing to allocate.
LinkedIn’s Marketing Solutions division has healthy revenue to absorb the hit: Q4 revenue from that division increased 20% year over year to $183 million.
Sponsored Updates
In the meantime, LinkedIn saw huge growth in sponsored updates, its native advertising product. The high-margin product now accounts for 52% of all its advertising business.
LinkedIn is pushing Lead Accelerator’s functionalities into sponsored updates. The potential benefit isn’t immediately obvious since Lead Accelerator was designed to help businesses reach people around the web. But Weiner said its conversion tracking functionality would benefit sponsored updates.
Sponsored updates is a potent ad product as long as people continue to monitor their LinkedIn feed for updates. Consequently, LinkedIn made that feed a central part of the its recently relaunched app. Users may have noticed the improved relevance of content in a feed and that it’s easier to follow publishers and consume content – important given the shift to mobile.
Notably, 57% of LinkedIn traffic is mobile, as are 80% of sponsored updates.
Weiner said that publishers are seeing “material increases in traffic coming through.” In some cases, traffic has increased 300%.
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Daily Roundup
One publisher, Forbes, told AdExchanger recently in an aside that it’s seen an uptick in LinkedIn referral traffic. If this trend continues, LinkedIn might get on the radar for business-obsessed publishers that now often use Facebook more than LinkedIn as a platform to distribute their content.
Programmatic
LinkedIn’s display business is in swift decline. Premium display “continued to face secular headwinds,” CFO Steve Sordello said, declining 30% year over year and accounting for just 15% of the marketing mix.
The upside is that people buying on open exchanges now have more to choose from: LinkedIn has started to offer inventory in programmatic exchanges, which it will pursue further in 2016.
