Despite the stock price plunge following its revised earnings before interest, taxes, depreciation and amortization (EBITDA) and earnings-per-share (EPS) forecasts for the balance of 2015, LinkedIn (NYSE:LNKD.DL) is on a bit of a roll lately. Option traders are betting big the sell-off following Q1 results was overdone, and several analysts have recently upped LinkedIn's share price target -- great news for shareholders.
Of course, in the world of social media, Facebook (NASDAQ:FB) stands head and shoulders above the rest in both monthly average users (MAUs) and, just as importantly, revenues. With its two million advertisers, the advent of video spots and nearly half the world's connected users counted as MAUs, Facebook blows the doors off the competition, right? As it turns out, though LinkedIn may not have the size and scope of Facebook, it's a favorite among a key advertising demographic.
Just the facts
When it comes to marketing via social media, a new report confirms what most everyone already knows: Facebook is a favorite among both business-to-business (B2B) and business-to-consumer (B2C) marketers. A whopping 96% of consumer-focused marketers that utilize social media advertising use Facebook, and a nearly as impressive 88% of B2B advertisers.
With 1.44 billion MAUs and data analysis tools that provide its marketing partners the ability to target their ads with a laser-like focus, it's no wonder Facebook is on so many companies' short-list of advertising venues. But for spots targeting businesses, Facebook -- despite its popularity -- isn't considered the most important social media alternative. LinkedIn takes that title.
Of the 1,000 plus social media advertisers that responded to the survey, over 40% of B2B marketers said that LinkedIn was their most important social media outlet, while just 30% opted for Facebook. As for targeting consumers, Facebook was the hands-down leader, with nearly two-thirds of the respondents saying it was the social media option of choice, while just 9% said LinkedIn.
The notion that advertisers prefer LinkedIn over Facebook when targeting business customers makes sense: after all, LinkedIn's emphasis on professionals is exactly what sets it apart from the Facebooks of the world. And with 364 million members as of last quarter, LinkedIn offers B2B marketers a growing number of prospective customers to target, whereas Facebook is widely viewed as a consumer-driven site.
LinkedIn's focus on professionals sets it apart from the rest of the social media players. Deals like the $175 million acquisition of B2B digital advertising provider Bizo is also evidence of LinkedIn's targeted user market, as was its $1.5 billion for online professional training specialist Lynda.com. Based on the recent survey, LinkedIn is successfully building its brand among business marketers.
That said, both LinkedIn and Facebook are taking steps to appeal to their respective under-served marketing partners. LinkedIn CEO Jeff Weiner has gone to great lengths the last couple of quarterly earnings calls to emphasize LinkedIn's efforts to boost its original content -- in other words, focusing on the networking aspect of LinkedIn as a professional portal, and not simply a job-hunting tool.
On the flip side of LinkedIn's efforts to become more consumer-oriented, Facebook introduced its "at Work" app several months ago as a means of dipping its toe in the business communication waters. As it stands, Work isn't a direct competitor to LinkedIn; it's more of an internal data sharing and communication tool. However, Facebook at Work does make it clear -- just as LinkedIn's focus on sharing original content does -- that both management teams recognize that the B2B and B2C markets, respectively, represent golden opportunities for growth.
Weiner and Facebook CEO Mark Zuckerberg have both driven results in their respective target markets, and that's not likely to change going forward. And you can bet both LinkedIn and Facebook will seize the opportunity that the B2B and B2C markets represent, which bodes well for long-term growth investors in both social media giants.
Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Facebook and LinkedIn. The Motley Fool owns shares of Facebook and LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.