What LinkedIn’s marketing prospects look like after its Bizo buy

Photo courtesy of Sheila Scarborough/Flickr

Last weekend, Bloomberg News got ahold of what it claimed was an internal LinkedIn memo where the company envisioned a $1 billion business by 2017 as an “integrated marketing and sales platform” for business-to-business (B2B) marketers, fueled with its $175 million acquisition of Bizo. Business Insider posted the purported document a few days later. Is this vision realistic? And what does it mean for digital marketing and advertising?

What Bizo does is what marketing automation phrase-makers call “multichannel nurturing.” Most of that nurturing drives either email marketing or advertising re-targeting. In B2B marketing, it’s usually about lead generation and email lists — the path from white paper or webinar through Marketo to sale and back again.

Can LinkedIn pull it off?

LinkedIn’s marketing solutions revenue was $360 million in 2013, and was weighted towards ads and content marketing that complement LinkedIn’s main business of recruiting and career management. Ads for conferences, recruiting, and continuing education mix with consumer electronics and luxury goods. It has been developing its media business nicely, as we covered in a Gigaom Research report last year.

LinkedIn’s marketing revenue grew 36 percent year over year in Q1, and another 44 percent in Q2. If it manages a 40 percent growth rate for three straight years, it will get to $1 billion. However, according to the published document, it won’t be selling or integrating with Bizo in 2014. That rate is three times faster than those projected for most digital marketing categories outside of mobile and, as noted, LinkedIn’s ads aren’t all B2B yet.

So let’s call it a stretch goal that depends on LinkedIn pulling off the following:

  • Successfully integrating Bizo technologies and services, initially across display advertising, content marketing, email, and mobile. If Bizo – which was already one of the few companies with access to LinkedIn’s advertising API – had been doing this already, it would have cost more than $175 million. But with acquisition will come focus.
  • Using Bizo’s publisher network to target and re-target desirable customers when they’re not on LinkedIn property. LinkedIn was doing this on a small scale on its own, but should do better with a network.
  • Increasing the value of LinkedIn’s own inventory through similar re-targeting and “nurturing.” Facebook is successfully doing that with its exchange and third-party data integration; there’s no reason to think LinkedIn can’t do so.
  • Adding to its portfolio of marketing offerings.

As for that last one, I always imagined LinkedIn would eventually try to create a marketplace for its users to sell things – other than jobs – to each other. LinkedIn has the right members, authenticated identity critical for business transactions, and a budding platform for reputation and authority ranking. B2B professional services would be a great place to start.

Digital marketing implications

A few weeks ago Spiceworks marketing VP Sanjay Castelino described to me a similar B2B marketing vision, but with the first hints of a marketplace. Spiceworks offers free management tools as a hook to build its community of small-business IT professionals, then sells ads, email, and content marketing to tech vendors who want to reach them. It gives tools to members so they can write RFQs, and has a pilot program with IBM to sell premium mobile device management. Spiceworks wants to automate its own customer “nurturing” process with analytics from its behavior and product ownership data.

Social and professional networks are uniquely positioned to build out this kind of marketing platform, but marketers need more variety. LinkedIn is killing Bizo’s business that sold data to other marketers looking to connect dots across channels, and with third- and first-party customer data. Do marketers really want their tools and analytics to come exclusively from the company selling them the ad inventory? Sounds like an inherent conflict of interest.

There’s a critical need for the independent marketing tech platforms I’ll be covering in Gigaom Research’s forthcoming Sector Roadmap. LinkedIn will have to support them with more than what we’ve seen from its lukewarm ad API efforts to-date.

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