Social Media Landscape: LinkedIn Could Rival Facebook’s Dominance

Written on
May 6, 2013 
Roger Katz  |

ADOTAS – The recent earnings results from the two most important social networks, Facebook and LinkedIn, present a fascinating comparison on multiple levels.  While Facebook currently has more members, I believe LinkedIn will become just as valuable, but without competing with Facebook for membership.  And that points to huge opportunities ahead for brand marketers.

LinkedIn as the dominant professional network

As little as a year or so ago, you only went to LinkedIn when you were looking for a new job.  That’s changed; it’s now just as much about doing your current job better. Savvy business people always look up a person’s profile on LinkedIn before a meeting happens, and connect after that meeting concludes. They regularly scan their network to see if they “know a person who knows a person” in an area they are researching. LinkedIn’s interesting new product, Contacts, provides a forum for keeping in touch with your professional network right in your professional workflow.

These are all things that can be done only when a company reliably owns a vast majority of the business world on their network — which I have little doubt LinkedIn will. Indeed, this quarter’s report saw significant membership growth globally — now at 218M members, a growth of 36% YoY.  (Interestingly, LinkedIn stated that students are one of the fasting growing member groups, speaking to the urgent need for newcomers to the professional world to kick off their careers right on LinkedIn.) All trends point to the site consolidating its position as the dominant global business network, just as Facebook has become the dominant global social network.

One reason for optimism about LinkedIn’s prospects: People stay on the network even as they move from job to job. In fact, one’s contacts on LinkedIn arguably become more valuable the more we change positions. This points to a challenge for Facebook. On FB there’s a risk of audience fragmentation with the recent spate of emerging niche social networks such as Pinterest, SnapChat, Tumblr, and Path among others. Facebook members can “take a break.” Or, they can decide to de-camp and move, within their intimate group of friends, to Tumblr or Path or whatever comes up next. They may keep Facebook, but their social life won’t necessarily degrade by spending more time elsewhere, in a more private space. However, if someone leaves the de-facto business network, LinkedIn, their professional connections will degrade. And there will be an impact — an economic one.

The marketing value of Facebook and LinkedIn

Facebook has proven since the very start that it offers overwhelming value to its member base — value which has led to consistently phenomenal, and unprecedented, member growth and stickiness. It has has over a billion people worldwide on its network. So inventory and scale isn’t a problem.  Instead, the strategic focus is on increasing the sophistication of its advertising tools, targeting systems, and monetization of its mobile stream. All of which is resulting in increasingly excellent, and deep, solutions for brand marketers. It was not surprising that in Facebook’s earnings report the focus was on positive revenue streams — a sore point among early investors.

Conversely, LinkedIn’s Q1 report had a strong “member first” focus, with the company’s content strategy one of the primary themes. Facebook doesn’t create content — its audience does. But while LinkedIn members do share their own content in their update stream, LinkedIn is looking to its business partners and business thought leaders to help create interesting and valuable content that helps professionals advance their career. This content strategy is aimed squarely at increasing traffic, engagement and stickiness. And it will lead the company, in time, to rich new advertising revenue opportunities, including revenue on mobile platforms. But community-building comes first. When talking about new advertising revenue sources, such as sponsored posts in the update stream, LinkedIn was careful to say it would follow a “member first” direction, rolling out solutions very gradually, while keeping the focus on increasing member value.

So what can B2C and B2B brand marketers take away from these announcements from these dominant consumer and business social networks?

Well, consumer campaigns on Facebook are, no doubt, getting more sophisticated every day. Readers of trade pubs see numerous stories about delightful consumer campaigns involving basketball heroes, the most”‘interesting” men in the world, and shipping pants from here to there. Facebook is simply further down the path of integrating advertising into its network than LinkedIn.  But that will change.  We can, and should, expect to see an increasing sophistication in marketing to business audiences on LinkedIn in 2013.

LinkedIn has an opportunity to have just as much success with its B2B audience as its B2C peers.  B2B marketers should expect it to become just as highly valuable to brands marketing to professionals as Facebook is in marketing to consumer. Furthermore, as users are spending more and more of their time on both networks, brands should consider their marketing investment as not limited to a “social spend” line item, but to be integrated throughout the marketing budget.

Roger Katz founded Friend2Friend in 2006, with a powerful conviction that the social graph of Facebook was an incredible opportunity for brands and products to ignite true “word of mouth” marketing online. Since then, he has led the company to increased profitability year over year while establishing the company in San Francisco, New York, Los Angeles and Barcelona, Spain. He has focused his company’s efforts on finding solutions that meet the social media marketing challenges facing brands and agencies today — building scalable technology solutions that can still be customized — and has since built solutions that go beyond Facebook to include YouTube, Twitter and mobile platforms.

A tireless evangelist for social media, Roger brings 20 years of marketing, strategy and social media expertise to Friend2Friend. His career includes management and consulting roles at companies such as Photobucket, Agilent, Brocade, Quantum, Bell Labs and Pacific Community Ventures, as well as a number of startups. Behind his marketing mind lies deep engineering expertise. He has engineering degrees from Michigan State and UC Berkeley and an MBA from Wharton. He’s a cycling fanatic, aspiring guitarist and (slow) swimmer.

Reader Comments.

This is a variety of opinions. It would be useful, especially for B2B, users to see actual independent data on the productivity and usage of Linked In.

Predictably, we have little beyond press releases targeting institutional investors in the stocks of the companies — not the B2B marketer.

As the “seniority” of the LI users drops, it sounds less professionally useful and likely to get more “social” for young people.

Posted by Brain Molecule Marketing | 4:56 pm on May 6, 2013.

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