MIAMI — It only launched in summer 2013 but, already, LinkedIn’s native ad format Sponsored Updates, is making up half of all the firm’s advertising revenue, a company exec says – and they look set to make up the majority soon.
“It’s already 50% of our revenue and it’s going to become an even bigger part, because it just performs extremely well,” LinkedIn global director of agency holding companies Jann Schwarz tells Beet.TV in this video interview.
“We’re going to be working to make it even more efficient. We’re doubling down very heavily on the format. It’s the fastest-growing product in the LinkedIn product line-up across all business lines.”
So what is Sponsored Updates, and how is it used?
Simply, companies on the platform pay LinkedIn to put editorial articles in front of the right users – and LinkedIn can target those users due to carrying a large amount of professional data.
Two years ago, LinkedIn opened it up to API access, meaning third-party platform could begin buying its native ads. The format was the main driver behind a 20% year-on-year bump in LinkedIn’s quarterly advertising revenue last Q4. Our calculations suggest LinkedIn made about $91.5 million from Sponsored Updates in that quarter alone, representing more than 10% of total company revenue.
“People on LinkedIn are willing to hear from companies,” Schwarz adds. “It requires middle-weight content to really be successful. A lot of other platforms have more lightweight content.”
“What does really well on LinkedIn is, if IBM talks about cloud computing… they would create sponsored updates that would feature content that is quit substantial and interesting in terms of the depth and seriousness of the content and would then lead you to take an action such as download a white paper. It’s more about telling a story.”
Schwarz also talks about partnerships in which LinkedIn is working with both the 4As and individual advertising agency groups to help them understand recruitment behavior and movements in the industry.