While much of the talk about Microsoft’s plans to buy LinkedIn for $26.2 billion in cash, announced Monday, has focused on beefing up its cloud business, there’s much to be considered for advertisers, particularly B2B advertisers.
In past years, Bing Ads executives have talked about the breadth of user data that Microsoft has spanning work and personal accounts and hinted at a newfound willingness to open access to that data vault for ad targeting under Satya Nadella. In 2014, David Pann, Bing’s General Manager, told me in an interview that they were looking at ways to integrate with Azure, Microsoft’s cloud platform, and to leverage the business intelligence that platform offers. However, this messaging has never been widely articulated, and translating the value of that trove of data to advertisers has been muddled, if discussed at all.
Fast-forward two years, and the LinkedIn acquisition would seem to pave a clearer pathway for clearer messaging and data integrations.
The acquisition positions Microsoft as the leader in data on the professional world — both at the organizational and individual levels — and potentially offers advertisers: 1. More refined targeting, particularly for B2B advertisers; 2. More reach with the addition of the LinkedIn universe of 433 million users; and 3. More commercial opportunities via Cortana, Micorosoft’s digital assistant, as it is positioned as “the professional’s” digital assistant.
The side-by-side professional cloud (Microsoft) and professional network (LinkedIn) graphs shown in the acquisition presentation (below) illustrate the impact this web of data can have in offering both a holistic picture of the professional audiences and the promise of precision in targeting for advertisers.
As a hint of what’s to come, Microsoft outlined a vision for an Intelligent Newsfeed as a “new daily habit” in the acquisition deck — a newsfeed that will unify data “for every professional to stay connected with the happenings in their network, industry and profession” as one avenue for advertising.
The LinkedIn acquisition gets Microsoft into social in a strategic way that complements the company’s existing, largely untapped user data. In Q1 2016, LinkedIn reported $154.1 million in ad revenue, a 29 percent year-over-year increase driven primarily by sponsored content. Bing Ads revenue rose 18 percent in the first quarter, which Microsoft attributed in large part to the adoption of Windows 10. And that brings us to the other pivotal piece of this acquisition — the foothold it gives Microsoft and Bing Ads in mobile, where it has been exceptionally weak compared to Google. LinkedIn’s mobile activity opens up doors for Microsoft that efforts like the Windows Phone and its search advertising partnership with Yahoo failed to provide.
Related ACI’s event: http://www.wplgroup.com/aci/event/real-time-advertising-summit/