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Microsoft’s LinkedIn acqusition represents huge opportunity for Bing Ads

Credit: Microsoft

Credit: Microsoft

Today Microsoft announced it will acquire the B2B social media platform LinkedIn for a whopping $26.2 billion in cash. Is LinkedIn really worth it? What’s Microsoft going to do with LinkedIn anyway?

I’ve been working with LinkedIn advertising for about four years now, and I have some suggestions I hope Microsoft will consider.

Why LinkedIn is worth it

LinkedIn has a unique value proposition: no other online advertising network has as much B2B-focused information.

Search marketing is great for determining intent — for understanding what a person wants. But social media platforms, like LinkedIn, tell us who the person is. Marrying the two pieces of data — who and what — brings us to the sweet spot of marketing and targeting an ideal audience. LinkedIn provides us with demographic targeting based on business and professional user information.

While Google AdWords has some level of demographic targeting through its display network today and has promised to add capabilities to its search ads later this year, it lacks business and professional information targeting. Most of the targeting categories are based on consumer-based purchase information or consumer demographic traits, such as parental status, gender, age, etc.

Several years back, my agency started pairing LinkedIn advertising with remarketing through Google AdWords and other remarketing platforms. The results were fantastic, to say the least. What we found for our B2B clients was that targeting the right person via LinkedIn was much more effective at driving down costs while improving lead quality and increasing the quantity of opportunities to bring in revenue.

Much of this was driven by the reality that keyword-based advertising doesn’t provide identity. Do large companies search for software solutions differently than small companies? Sometimes, but often not. With AdWords, customers were paying for many clicks that never had the chance to convert because they could not afford the product being advertised or it was not a correct fit for various reasons. LinkedIn allowed us to directly target individuals by title, company size, and more, helping us to find the right audience based on their ability to purchase.

What LinkedIn isn’t getting right

In all of the time that I’ve worked with LinkedIn, however, I’ve also seen some things they haven’t done exactly right.

The ad management interface

While the self-service ad management interface has relaunched recently and is much improved, it took LinkedIn a long time to get there. The interface still could use new features and usability work, but it’s definitely an improvement over where it was.

As Google has learned, the interface is important. As your platform grows over time, as Google’s has, all of the new features take up space in the dashboard. Reworking the interface over time will be necessary to adequately display data and improve usability for advertisers.

Every ad should be self-service

LinkedIn has continued to require display ads to be managed by a LinkedIn account manager or through programmatic buys. Why? Google and Facebook have both proven that display advertising can be fruitful even with smaller advertisers.

The display ads also only work on a CPM model, which isn’t always ideal, especially if the ads aren’t receiving enough impressions. That’s what happened to a campaign I ran several years ago targeted at marketing staff in nonprofit organizations. I was giving a webinar on Google for Nonprofits, so I went to LinkedIn to find that specific audience.

The only problem was that LinkedIn couldn’t guarantee the impressions in the two-week timeframe leading up to the webinar. The suggestion was that I expand my audience to reach all employees in nonprofit organizations. But that targeting was far too broad for my needs, and extending the webinar registration longer than two weeks didn’t seem optimal. The guaranteed impression issue continues to be a challenge today.

Mobile ads

According to its own data, LinkedIn reports that more than 50% of their US traffic is from mobile devices. That’s not entirely surprising when you consider how people network and connect via social platforms today.

What is surprising is that LinkedIn hasn’t had a great solution to address mobile advertising. While there are multiple display and text advertising formats available on LinkedIn, only one, Sponsored Content, is available on mobile devices. That means that advertisers using the display ads solution automatically miss out on potentially 50% or more of the possible impressions that happen on mobile devices.

Sales staff

I speak often at conferences about LinkedIn and many of the successful case studies we’ve seen using LinkedIn advertising. After every talk, several audience members approach me afterward telling me that they didn’t realize self-serve ads were an option on LinkedIn. They all tell me that they spoke with a salesperson at LinkedIn who guided them towards display ads (mentioned above) and that they thought the initial commitment had to be $25,000. Not so.

Display is just one of multiple advertising methods on LinkedIn. There is a self-serve platform for text ads and sponsored content, and the minimum commitment on those is only $2/click. Not sharing this option with potential advertisers who could not afford a high minimum commitment for display ads essentially turned away smaller advertisers who could have still spent money on the platform.

Failing to capture those ad budgets from smaller advertisers meant that those advertisers turned to other platforms to spend that budget. That’s a mistake.

Why this could be great for Bing Ads

Bing — how we wish you could do more. While there are those in search advertising who dismiss Bing Ads as a platform, I’ve often found it to be highly effective for a low cost per conversion. When my Bing Ad representatives call me to ask me how they can convince my agency to spend more with Bing Ads, I tell them that volume is the problem for Bing. Many of my clients, too, automatically want to dismiss Bing because of its lack of traffic volume.

But what if Bing had what Google (and even Facebook) did not have? Frost & Sullivan estimates that by 2020, the global B2B e-commerce market will be more than double that of the B2C market at a whopping $6.7 trillion. As it stands today, Google doesn’t seem well-poised to gain much B2B demographic information unless they, too, acquire a B2B social or sharing network. But LinkedIn is the gorilla in that market, so even acquiring another platform wouldn’t likely be as helpful as this buy could be to Microsoft.

The greatest potential for this merger is the ability for advertisers to manage campaigns on Bing Ads (both search and display) with the Bing Ads Manager and LinkedIn targeting options, similar to the Demographics for Search that Google recently announced is coming soon. This would essentially marry both intent and identity for search — what search is sorely lacking today for B2B targeting.

What’s still lacking: A real display network

To make this work, however, Bing also needs a real display network. The good news? I know one for sale, and it’s one that Microsoft knows pretty well: Yahoo. And, the great part is, it costs far less than what Microsoft just paid in cash for LinkedIn. Verizon is rumored to be offering only $3 billion for Yahoo, while it is valued at $35 billion.

But Microsoft would have to act fast (and it may even be too late), as Yahoo’s board is considering the second round of offers now. That said, money talks. And Yahoo’s board wants to get the most money it can from this sale.

Microsoft: Go buy Yahoo. Do it now. Get a display platform and nurture it.

Microsoft’s vision for LinkedIn appears terribly flawed

All of these elements of my personal vision for LinkedIn are great, but unfortunately, it may not be the direction that Microsoft is planning for LinkedIn. 

TechCrunch reported that Microsoft purchased LinkedIn to compete more in the enterprise sales arena with the likes of Salesforce. As shared in this deck from Microsoft, Microsoft focuses on linking the social side of selling to its current sales and software products, like Microsoft’s Dynamics CRM. Jeff Weiner, CEO of LinkedIn, added thoughts about integrating LinkedIn into other Microsoft products, including Outlook, Calendar, Office, Windows, and other Microsoft apps.

One of the more disconcerting comments I’ve seen on the acquisition was from Satya Nadella, CEO of Microsoft, to Microsoft employees:

This combination will make it possible for new experiences such as a LinkedIn newsfeed that serves up articles based on the project you are working on and Office suggesting an expert to connect with via LinkedIn to help with a task you’re trying to complete.

Think about that for a second. Microsoft wants to acquire LinkedIn and integrate it with your desktop and the projects you’re working on. Microsoft wants to read your data and make suggestions from your desktop. As a business owner, I find that to be an invasion of privacy and a risk to my proprietary business data.

One could argue that businesses use tools like Google Drive and Gmail, with Gmail reading your emails and showing relevant ads in its platform. However, these products are free in most cases. So why should businesses pay for software like Microsoft that may show ads or some level of sponsored content?

Microsoft: You either love Bing, or you don’t. I urge you to love it.

This acquisition has the potential to truly be a big deal for Bing and the ad platform. But personally I don’t feel that Microsoft has truly ever given Bing the opportunity, resources or funding it deserves to truly compete with Google.

This. Is. Different.

Microsoft: You have a huge opportunity before you. You now will possess rich B2B information that Google doesn’t have, which can position Bing in a new way in a market that will surpass what Google can do with B2C. So don’t screw this up.

via Marketing Land