LinkedIn's strategy pays off

LinkedIn’s CEO Jeff Weiner described 2012 as a “transformative year” for the professional social network. The careful steps it has taken to improve value for users as well as its stock holders are showing signs of long-term pay off.

Lara O'Reilly

LinkedIn’s shares soared by almost 10 per cent following news of the better than expected uplifts in its fourth quarter earnings report. Revenue increased 81 per cent year on year to $304m, while net income grew 67 per cent to $12m.

In the past 12 months LinkedIn has made several noticeable changes to user experience on the site.

Firstly, the company revamped its profiles, making it easier for members to build their professional brands and also providing them with notifications when others had viewed their content to encourage new connections and higher usage.

In addition, it offered users the opportunity to “endorse” their peers by clicking on pre-determined skillets such as “social media” or “CRM”. Nearly 1 billion endorsements have already been generated to date.

In the fourth quarter, the number of members updating their profiles doubled year on year, seemingly as a direct result of the profile changes.

LinkedIn also introduced its Influencers programme, moving the company into the professional publishing space. The site has signed up 200 well known figures, from Sir Richard Branson to Barack Obama, to contribute exclusive blog-like content to the site.

In a call with investors and analysts Weiner hinted LinkedIn will increasingly focus on supporting content marketing beyond the Influencers programme, providing businesses with more opportunities than simply their profiles and job ads to connect with a professional audience.

LinkedIn is upping its game in this area by launching a new “sponsored content” ad unit, where companies can pay to promote their research papers or thought pieces to a select group of their followers. Companies such as GE, The Economist, Xerox and BlackBerry are already on board.

When LinkedIn first went public in 2011 I argued it needed to prove its value to users as well as investors if it was to continue its strong trajectory of growth. Back then, the site offered little reason for users to return very often - except when they were looking for a job.

Now, by gamifying the networking experience with the addition of extra notifications and endorsements and entering the content marketing arena, users have an incentive to log in regularly.

For brands, the changes represent a new valuable and engaged audience of 200 million professionals to target with B2B high-end content and thought leadership.

And for LinkedIn, the innovations mean it has more reasons not to rely on membership subscriptions alone as it makes its classifieds and display advertising propositions look increasingly attractive to brands looking to target a premium audience.

Readers' comments (1)

  • Strange, I see it the opposite - that they are undermining the site, creating a wash of noise that will only damage the brand in the long run.

    Endorsements: find me one person who finds these very valuable. What they are is in fact a way of tagging users so that LinkedIn can leverage data and sell advertising. Everyone is helping LinkedIn create a categorised database of users, nothing more.

    Content. For three months LinkedIn say they are trying to fix the issue that I cannot turn off LInkedIn Today. This intrusive section contains junk. "5 tips to get the job you want... smile... wash... wear good clothes" nonsense, which just has lots of Indian users at the bottom saying "Great tips that we can all learn from". With such vapid content, it's hard to tell good content that may be of use.

    And let's not forget "say congrats". I find it cringeworthy that they recommend I "say congrats" to a high profile business connection. They seem to want me to "congrat" everyone for everything - again more noise.

    LinkedIn will undermine its value if it continues down this Facebook path.

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