LinkedIn Usage & Engagement Up, Ads Down

With substantial portions of the global white-collar workforce under lockdown, it should hardly come as a surprise that LinkedIn usage has mushroomed.

As per Microsoft’s latest quarterly results, LinkedIn is up to 690 million users, up from 675 million at the end of 2019. Although Microsoft does not break out how many active users the platform has on either a monthly or daily basis.

For comparison, across the Facebook family (i.e. including Instagram etc.) there are around 2.5 billion monthly active users, of which approximately 1.7 billion are active daily.

Therefore, how LinkedIn’s 690 translates to monthly and then daily active users is anyone’s guess. In a white paper released last year, which has since been edited, removing any references to the previously stated data, LinkedIn claimed that 40% of users accessed daily.

If that were indeed the case, then daily active usage would now sit around 276 million users, give or take.

LinkedIn Video Booming

Much like in every other channel, live video on LinkedIn is growing gangbusters.

Satya Nadella, Microsoft Chief Executive

“With LinkedIn Live, people and organisations can broadcast video content to their networks in real-time. Streams are up 158% since February.”

To be fair, the feature is still relatively new on LinkedIn, only getting rolled out to Pages globally in January. Therefore, even without COVID-19, one would expect accelerated feature growth.

LinkedIn Live, which initially rolled out in beta last February, drives truckloads of interactions, which naturally should translate into very high algorithmic cut-through.

Rishi Jobanputra, LinkedIn Product Manager

“LinkedIn Live has helped members and organisations have real-time interactions with their communities. That’s why brands have seen 7X more reactions and 24X more comments vs standard video posts on LinkedIn.”

Like elsewhere, LinkedIn Live usage is quite diverse, with use cases ranging from the predictable corporate stuff to Louis Vitton fashion shows.

It’s also “drawn inspiration from” one of Facebook’s latest live-streaming features, which is a rehearsal mode. Essentially, enabling users to practice their broadcast on LinkedIn before pushing the plunger on going live. Placating anxious CFOs globally no doubt.

However, in a typically lame LinkedIn style move, to use LinkedIn Live users need to submit an online application form…

In 2020.

On social.

You can’t make this stuff up.

LinkedIn Ads & Jobs Are Down

While the quarter ended well enough for LinkedIn, in terms of ad spend, due to a strong start to Jan and Feb, March tailed off.

Fortunately for Microsoft, advertising revenue is a small part of its revenue mix. Therefore, while LinkedIn and Bing Search spend were down, that has a limited impact on the broader business.

Satya Nadella, Microsoft Chief Executive

“We saw increased demand from work, play and learn-from-home scenarios, benefiting Windows OEM, Surface, Office Consumer and Gaming. This was partially offset by a significant reduction in advertising spend, which impacted our Search and LinkedIn businesses.

We expect the sales dynamics from March to continue, including a significant impact in LinkedIn from the weak job market and increased volatility in new longer lead time deal closures.”

Something which in itself holds the seeds of a potential opportunity for LinkedIn, to double down with both marketing and product development, courtesy of Microsoft's balance sheet, while rivals protect cash reserves.

LinkedIn’s major ad competitors are all largely depended on ad revenue, meaning many will be cutting back on investment due to COVID-19.

For example, CNN reported last week that Google was cutting its marketing spend by 50%, and claimed a hiring freeze.

LinkedIn’s Pain Is Marketer’s Gain

While the slowdown in LinkedIn ad revenue isn’t great news for Microsoft, it is for communicators.

LinkedIn is renowned for being a pricey ad platform relative to other social channels.

According to Adstage’s Q4 2019 Paid Search and Paid Social Benchmark Report, the breakdown of LinkedIn ads was as follows:

• Median Cost per Click (CPC) = US$4.08

  • CPC increased by 16.6% from Q3 2019

  • CPC increased by 10.6% year over year from Q4 2018

• Median Cost per Impression (CPM) = US$9.05

  • CPM increased by 10.3% from Q3 2019

  • CPM increased by 16% year over year from Q4 2018

• Median Click-through-rate (CTR) = 0.22%

  • CTR decreased by 12% year over year from Q4 2018

  • CTR was equal to Q3 2019

Those ad costs are significantly higher than Facebook, while the CTR is significantly worse.

However, with LinkedIn usage surging, and ad investment falling off that should have the effect of reducing costs across the board. As the supply of ad inventory massively outstrips demand for ad space.

Also, with users spending more time job hunting, bored or “working” on the LinkedIn platform engagement is blossoming, and should likely continue to some extent, come the end of lockdown.

All in all, LinkedIn could well emerge a more engaged, feature-rich marketing and comms channel come the end of 2020. Even if revenue gets a gnarly writedown for a quarter or two.