Once upon a time, analysts wondered how Facebook (FB +2.08%) would monetize its news feed on mobile. A year later, Facebook has it mastered -- and over the last few months LinkedIn (LNKD +0.00%) has been quietly joining in on the fun.
Facebook's ads-in-the-feed strategy is working
To monetize mobile, Facebook brought ads to its news feed. As it turns out, they weren't as obtrusive as people thought they would be.
Members seemed to be accepting of ads in the news feed -- even engaged. As a result, advertisers have poured money into Facebook's mobile ad products. Mobile advertising revenue has soared from virtually zero one year ago to 41% of total revenue today. Even more, on the strength of mobile ad products, Facebook's total revenue growth has actually accelerated over the past year.
LinkedIn follows suit
Watching Facebook's mobile ad products succeed, LinkedIn has introduced several of its own ways to monetize its members' feeds.
In July, LinkedIn introduced Sponsored Updates, or company updates that businesses pay to get greater reach in the LinkedIn news feed, both on desktop and mobile.
Now LinkedIn is taking the strategy even further. On Monday, the company gave its Sponsored Jobs greater visibility by introducing them to members' feeds. Before, Sponsored Jobs were only displayed in a side section on a user's home page.
Sponsored Jobs in the LinkedIn feed. Source: LinkedIn Talent Blog.
This product will likely add meaningful value to LinkedIn's business. The group that would be most interested in this product is already LinkedIn's largest contributor to the company's top and bottom line. In its most recent quarter, its talent solutions segment accounted for 56% of revenue and grew by 69% from the year-ago quarter -- making it the company's largest and fastest-growing source of revenue. This stakeholder uses LinkedIn to more "efficiently identify and acquire the right talent for their needs," according to its most recent 10-K. In other words, LinkedIn already has a huge market for a marketing product like Sponsored Jobs, especially with new opportunities in the news feed.
Bringing Sponsored Jobs to the news feed is, by itself, a big change. But the key difference here is that they will get mobile publication for the first time. This should help recruiters immensely. LinkedIn says that 30% of job views come from mobile. Even more, "Early results show that Sponsored Jobs on mobile are about 4 times more engaging than Sponsored Jobs on the desktop," the company said.
LinkedIn's ability to tack on incremental value to the social network simply by adding a marketing product to its news feed highlights one of the company's major opportunities. While its talent solutions business is thriving at 56% of revenue, its marketing solutions accounts for just 24% of revenue. As LinkedIn beefs up its marketing solutions in its news feed, it is bound to see incremental gains in the smaller segment.
