Dive Brief:
- LinkedIn's Q1 report for 2015 showed a 38% year-over-year increase of ad revenue at $119 million, but the source of that revenue has changed.
- For the first time, "traditional onsite ads" comprised less than 50% of the ad business.
- Instead, "Sponsored Updates"—a content marketing product that allows brands to place ads on LinkedIn users' pages—comprised 40% of ad revenue for the quarter.
Dive Insight:
LinkedIn reported a Q1 net loss of $43 million—higher than its 2014 first quarter net loss of $13 million. Although the company beat Wall Street forecasts for the quarter, its "weak outlook" for Q2 of this year led to more than a 20% plummet of stock shares in pre-market trading, according to USA Today. LinkedIn's projected Q2 revenue is reported at between $670 and $675 million, which comes in way below initial Wall Street predictions of $717.5 million.
LinkedIn's shift away from "traditional" ads to content marketing products is reflective of the general digital ad trajectory. Nearly all big publishers running sponsored native ad content and in-stream ads are seeing success in social networks. LinkedIn's ad revenue is just now showing that shift in concrete results.
