What Microsoft’s acquisition of LinkedIn means for Bing and LinkedIn Ads

Contributor Sahil Jain offers his unique perspective on what the combination of Bing and LinkedIn could mean for companies, advertisers and the industry as a whole.

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Microsoft's Acquisition of LinkedIn

On Monday, June 13, software giant Microsoft announced its largest acquisition deal in history, acquiring LinkedIn for $26.2 billion in cash.

Because we at AdStage (where I’m CEO) are the only direct API partner for both Microsoft’s Bing and LinkedIn Ads, we have a special view into these companies’ operations. Therefore, we can offer a unique perspective on how this major acquisition will impact not just the Bing and LinkedIn ad networks but also the advertising industry at large.

Let’s first look at the numbers:

Bing

LinkedIn

It’s clear the two public companies provide incredible audience reach, and they’re expected to experience impressive growth trajectories in 2016.

So, what does the combination of these two entities potentially mean for the digital advertising space?

1. Increased inventory

Display

Bing Advertising allows advertisers to showcase text and shopping ads through Microsoft’s app properties and search. However, unlike Google’s Display Network, Bing does not offer support for display ads.

Meanwhile, LinkedIn offers display ad inventory across its main property, with additional potential outlets on the horizon, such as SlideShare and Lynda.com.

Bing and LinkedIn Ads AdStage via martech.org

Native ads & rich media

LinkedIn’s Sponsored Content, an ad unit which shows up natively within a user’s update feed, has been enthusiastically adopted by B2B marketers. It drives 56 percent of LinkedIn’s advertising revenue in Q1, and the company has called it the fastest-growing business unit in its history.

Sponsored Content supports rich media — including embedded docs, presentations and larger image sizes. This ad unit offering alone positions Microsoft to make a seamless introduction into social advertising, while also building momentum against Google’s AdWords suite.

Retargeting

LinkedIn sunsetted its retargeting solution, Lead Accelerator, leaving marketers unable to get a clear view of their advertising efforts throughout the conversion funnel. Today, marketers lean on third-party solutions such as AdWords remarketing, AdRoll and Criteo to capture lost visitors from LinkedIn.

Bing Ads recently unveiled an out-of-the-box search retargeting option that could complement LinkedIn Ads campaigns to recapture unconverted traffic.

Mobile

Mobile digital advertising has surpassed desktop spend for the first time ever, according to eMarketer, and the gap is projected to widen. Following the trend of greater mobile adoption, LinkedIn usage continues to increase on mobile — the company says it has experienced a 49-percent increase year over year, and now 60 percent of its usage is on mobile devices.

This presents a great opportunity for Microsoft to increase its penetration on mobile, as LinkedIn has become the de facto social network for trending B2B news consumption.

2. Enhanced targeting

Bing search results use intent-based targeting from a user’s specific search query. To serve users only the most relevant ads based on their search query, advertisers can refine targeting parameters using light demographic information such as age range and sex.

On the other hand, LinkedIn Ads targeting offers a more holistic picture of an audience using a combination of demographics, employment history, groups and skill sets.

Imagine if the two offerings joined forces and created one of the most robust B2B ad solutions to date. It’s not that far-fetched. Just recently, Bing has been experimenting with showcasing live tweets alongside its search results; meanwhile, Facebook once partnered with Bing to uncover insights from Facebook Search queries.

The ability to refine search audience targeting capabilities to include job title, industry and skill sets — or perhaps, use Bing to power deeper LinkedIn results — allows advertisers to maximize spend and only serve ads to the most relevant audience.

Everything from semantic search to custom audience targeting is on the table.

3. More favorable auction dynamics

Among social advertisers, LinkedIn’s inventory is both premium and expensive. Unfortunately, LinkedIn’s ad inventory often commands higher CPCs and CPMs than its fierce rivals, Twitter and Facebook.

Tapping into Microsoft’s extensive network will most certainly drive LinkedIn membership growth. Increasing membership means additional opportunities to purchase inventory, and it directly affects auction pricing, driving average cost-per-click costs lower.

4. High barriers to entry

As an advertising network grows, there must be a significant investment in resources to facilitate infrastructure and stability. This is why most mature ad networks rely on API partners to help drive innovation and increase the speed to market for new products.

While Bing Ads remains an open API program, LinkedIn only offers a closed program. The process to even be considered a LinkedIn global partner is highly selective, and it accepts only a handful of global partners.

If beta programs open through the API exclusively, only a very small pool of partners will be able to extract value from their PPC offerings.

Is it possible that Microsoft will get rid of LinkedIn Ads?

Not likely. Why? Because it’s just not a smart business decision. Ads give Microsoft the ability to monetize audiences at a much higher value per person. LinkedIn’s subscription service accounts for only a small percentage of its total user base, though its recruiting and hiring business brings it the most revenue of all.

Increasing reach is an opportunity for Microsoft to engage an audience of professionals more likely to subscribe to Office 360. LinkedIn’s ad business is on the right path to becoming a multibillion-dollar business and a significant driver of growth in the near future.

In closing

On the business side, all ships rise with the tide on this deal. The LinkedIn acquisition allows Microsoft to build a thoughtful product suite designed for the B2B advertiser across search, social, display, mobile and retargeting.

What’s your personal take on the acquisition? Leave a comment in Marketing Land’s social media channels. We’d love to hear what you think this means for the future of advertising.


Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.


About the author

Sahil Jain
Contributor
Sahil Jain is the CEO of AdStage, the leading cross-network online advertising platform. Previously he dropped out of High School to be an Engineer at Yahoo!, left UC Berkeley to join Corp Dev at AOL and co-founded YC backed Trigger.io.

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