LinkedIn to shut down B2B ad platform 'Lead Accelerator'
- During its fourth quarter earnings call on Thursday, LinkedIn announced it would be killing off the lead-nurturing ad product it gained with the $175 million acquisition of B2B marketing platform Bizo in 2014.
- Launched less than a year ago, LinkedIn expects that shutting down the 'Lead Accelerator' will result in a $50 million revenue loss, according to Ad Exchanger.
- LinkedIn CFO Steven Sordello told investors on the earnings call that initial demand for the product was "solid," but while a unified B2B ad platform made sense in theory, in reality it required "more resources than anticipated to scale."
The professional social network posted a Q4 beat on Thursday, but shares plunged 27% in extended trading after LinkedIn issued weak guidance. The shutdown of the Lead Accelerator was the most notable news to come out of the earnings for marketers and advertisers.
Sordello told investors they would phase out Lead Accelerator in the first half of the year and integrate its technology into Sponsored Content, which now accounts for 52% of all of LinkedIn's ad business.
"We also remain committed to support our current Lead Accelerator customers through the migration. Sponsored Content is our fastest growing and most profitable ad product, so we will increasingly focus our efforts here to scale our B2B capability in the fastest, most sustainable way," Sordello said.
Chris Golec, CEO and found of B2B marketing company Demandbase, told Marketing Dive in an email that he's "not surprised by this move," adding that Bizo seemed "an odd fit from the start."
"Companies today want to tie their advertising more directly to revenue," he said. "However, B2B marketing continues to be an almost $40 billion market, and companies will continue to spend heavily, especially when you can help them bridge ad tech with marketing tech and tie advertising investment to actual pipeline and revenue."
LinkedIn's Marketing Solutions division grew 20% to $183 million, accounting for 21% of revenue compared to 24% a year ago. For comparison, Sponsored Content grew about 85% for the quarter, which Sordello said allowed it to surpass Marketing Solutions revenue for the first time. He attributed this growth to largely to "a combination of engagement and customer adoption."
Ad Exchanger notes that the native ad product could benefit from Lead Accelerator's conversion tracking functionality, and that native advertising is only expected to continue growing as consumers increasingly shift to mobile.
LinkedIn Kills Off Bizo Product ‘Lead Accelerator,’ Takes $50M Write-Down
Seeking Alpha : LinkedIn (LNKD) Jeffrey Weiner on Q4 2015 Results - Earnings Call Transcript
Seeking Alpha: LinkedIn -27.5% due to guidance; field sales growth expected to slow, acquisition announced