The financial markets, media industry and many Just Media clients, have been reacting to news that LinkedIn stock dropped 40% on Friday based on its weak Q1 2016 guidance. Most importantly for B2B marketers, LinkedIn announced the closing of its controversial Lead Accelerator and Display Network products. The biggest reaction of course is a huge hit on valuation. But is this actually a great time to buy LinkedIn??
Historically, LinkedIn has been a very poor sales company. As an agency that runs a plethora of LinkedIn programs, we are constantly frustrated by their lack of clarity on how we should engage with them on a client by client basis. It’s gotten better, especially with some recent agency contact additions, but it’s still a relative train wreck compared to other media and publishing partners with whom we work. It’s absolutely throttled our ability to scale spend towards LinkedIn and effectively help support LinkedIn as they relentlessly pursue direct sales into our clients often leaving us to pick up the pieces.
LinkedIn CEO Jeff Weiner stated, despite positive initial adoption, they needed “more resources than anticipated to scale” the Lead Accelerator solution. This, again, goes back to their sales model and go-to-market approach. LinkedIn failed to evolve its model from an old school media solution to a media technology platform solution.
When you look at successful media technology platforms in the market, these companies focus on strong channel and “reseller” models, often through agencies. In short, they deeply partner with organizations who have the skill sets and expertise to manage complex media tech. This was a huge miss by LinkedIn, because most client marketing teams don’t have the bandwidth or frankly patience to manage complex, clunky and time consuming platforms whatever the performance promises. As a result, after signing up with LinkedIn products, clients quickly abandoned the platform in frustration.
We have multiple clients on Lead Accelerator. It’s a brilliant concept. It works in terms of performance and it’s a perfect example of the future of “digital nurture” which can be targeted to individual web visitors based on some solid segmentation capabilities (“digital nurture” is what we refer to as the tactic of intelligently retargeting high value site traffic through multiple media vehicles – display ads, Facebook social posts, LinkedIn sponsored updates and even email).
But it’s a bit of a beast. It takes hours to set up, needs intelligence applied to it in constructing a mix of offers to engage the target and it needs monitoring to ensure it is optimized. But this is what agencies do. We built the expertise to setup, run, manage and optimize the platform. We were pushing LinkedIn to adopt a LLA certification model for agencies. They moved too slow. It would have helped LinkedIn make the product viable and increased adoption with this process-flawed yet brilliant product.
So why buy LinkedIn now? Because they still have the undisputed gold mine of business data. It’s self-reported and constantly updated as people move around to different companies, new industries or change job functions. Its current filtering capabilities are meaningful for decent B2B targeting and there’s even more data they can leverage if they chose to do so. When LinkedIn finally creates robust data-driven products that integrate seamlessly into the technology stacks of other more evolved ad platforms then the revenues will quickly scale. They might not have it dialed in just yet, but it’s only a question of time. Let’s just hope they move more quickly next time.
NOTE: Thankfully existing LinkedIn Lead Accelerator customers will receive support through the end of 2016. If you want to read LinkedIn’s future product positioning, you can check out the blog posted by Russell Glass, Head of Product, here.
Just Media, Inc.