LinkedIn is restructuring its advertising network as part of a global effort following what appeared to be its biggest one-day loss on record.
The professional-centric social network announced that it will stop selling ads that appear outside of the users’ live feeds in what it calls its ‘Lead Accelerator’ business. Scrapping the tool will lead to a $50 million dip in revenue, it has been reported.
The platform will instead will instead channel more resources into its Sponsored Content business which grew 85 per cent.
Last week, nearly 45 per cent was wiped off LinkedIn’s Wall Street shares, after the platform announced its first-quarter revenues of 2016 would be about $820 million, lower than the $867 million initially forecasted.
LinkedIn CFO Steve Sordello said in statement on the network that required more resources than anticipated to scale.
LinkedIn first erected the ad network after buying business-to-business ad-tech firm Bizo for $175 million in 2014.
The company said it will use the technology behind the network to inform its sponsored content ad format that lets brands promote their content into LinkedIn users’ news feeds, similar to how ads on Facebook and Twitter work.
Jake Thomas, head of LinkedIn Marketing Solutions MENA, confirmed the changes and said no job losses had been announced within the 96-strong Dubai office and that the company was still committed to growing its workforce.
In a statement issued to Campaign, he said: “At LinkedIn, we want to focus on our core business while simplifying our portfolio and infrastructure. While our customers embraced LinkedIn Lead Accelerator’s (LLA) retargeting and sequential messaging capabilities, we found that this required customers to access and manage campaigns through a separate platform, which was not an ideal scenario. Further, it prevented them from getting the most that LLA had to offer. As such, the infrastructure changes we’re making will now bring the best of LLA into a single platform.”
“The change does not mean that we are shutting down the advertising and marketing arm of LinkedIn; in fact, globally our Sponsored Updates product has been the fastest growing in LinkedIn’s history and locally the LinkedIn Marketing Solutions team in MENA has grown five-fold from 2014 till 2016. This is precisely why we are evolving, consolidating and strengthening our products to make it a more compelling solution for our customers.”
