Microsoft’s LinkedIn deal is a smart move – but advertising is a ‘side-show’ | M&M Global

Microsoft’s LinkedIn deal is a smart move – but advertising is a ‘side-show’

Agency experts from IPG Mediabrands, Havas Media International and DigitasLBi explain why Microsoft splashed out $26.2bn on the acquisition of LinkedIn.

‘Why the LinkedIn acquisition makes sense for Microsoft’

Sebastian RedenzSebastian Redenz, head of paid social EMEA, IPG Mediabrands

“Microsoft is late to the party when it comes to managing a social network takeover. The price for LinkedIn is a hefty one. However, it makes sense for both sides for three reasons.

“One – LinkedIn’s product has stagnated in the past 24 months. It still has no video product, its mobile app feels dated, and the Talent Nurturing product is a failure. Microsoft has the resource to help LinkedIn get back on track and develop new products that appeal to advertisers. This can only be good for the competition.

“Two – the LinkedIn acquisition fits the general strategy of transitioning Microsoft from a software to a business services provider. Without any doubt, LinkedIn’s audience is the largest directory of business professionals and SMBs, so Microsoft now has the opportunity to leverage the data and integrate it in Outlook or its CRM suite Dynamics. Google and Salesforce will be watching this.

“Three – LinkedIn comes with a revenue generating business model that has matured over the years and now breaks even. This is important when comparing this deal with the Facebook acquisition of WhatsApp, which came in at a similar price but is nowhere near as monetised.”

‘Advertising is the side-show on the Microsoft/LinkedIn deal’

yannis zachosYannis Zachos, head of strategy, Havas Media International

“The acquisition of LinkedIn would’ve sent shockwaves across the big players of the online advertising a few years ago. For the first time one player would have it all; a successful social network, strong display and content business, a solid search engine as well as a sizeable video and calls service.

“However, the landscape has shifted. Gone are the days when Steven Ballmer was chanting ‘advertisers, advertisers, advertisers’. His big bet to turn Microsoft into an advertising giant has been abandoned with display outsourced to AOL and the sales teams dismantled. The focus is back again into what made Microsoft great, software services for the enterprise.

“Advertising has also been a side business for LinkedIn, which has relied on subscriptions and services to drive revenue. This deal has a lot of potential to transform the professional services landscape but the way things stand is bound to have little impact in the advertising world.”

‘LinkedIn and Microsoft now have the potential to underpin your professional life’

Paul DaltonPaul Dalton, chief media officer, International at DigitasLBi

“Increasingly, companies of all shapes and sizes are leaning in to data as a source of competitive advantage, and with the acquisition of LinkedIn, Microsoft is buying the world’s most valuable B2B data set. LinkedIn is unique in the scale, type and depth of data it provides, offering advertisers precision targeting, engagement and conversion at scale.

“The acquisition also cements LinkedIn’s role as the owner of the B2B space in social. Just as Facebook and its component parts (Instagram, WhatsApp etc) underpin your personal life, the combined forces of LinkedIn and Microsoft now have the potential to underpin your professional life.

“LinkedIn has evolved from a community of professionals to become the primary B2B content publishing platform, and I would expect this aspect of its business to develop rapidly following this acquisition, with a focus on video and the proliferation of new types of content.

“However, the real opportunity for brands lies in harnessing LinkedIn’s rich data set outside of the platform. There is unexplored territory for brands in the large-scale matching of LinkedIn data with their own advertising intelligence, so it will be interesting to see how Microsoft capitalises on this.”


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