Microsoft's LinkedIn has made significant strides in the digital advertising market, with its annual advertising revenues expanding to nearly $4 billion in 2023.
This increase marks a substantial jump of 10.1% versus the previous year, according to estimates from Insider Intelligence, with an anticipated growth of 14.1% in 2024.
The shift in advertising dynamics is partly attributed to the migration of brands from Elon Musk's X (formerly Twitter).
Marketing agency executives and advertising insiders told the Financial Times that the prices for LinkedIn ads, which operate on an auction-based system, have surged in response to heightened market demand.
The increase has been as much as 30% over the past year.
The exodus from X, exacerbated by controversies such as an antisemitism row and Musk's public retort to departing companies, has led LinkedIn to position itself as a respectful partner for brands.
In a recent pitch deck for marketers, LinkedIn emphasized working with a partner that respects the world in which these brands operate.
LinkedIn's evolution from a job-hunting and networking site to a more dynamic social media platform has also played a role in attracting users who share various types of content, from career advice to executive essays.
Despite these gains, LinkedIn still accounts for a small fraction of the advertising market in the U.S., holding a mere 1.5 % compared to Google's 27% and Meta's 21%.
However, its unique targeting capabilities, leveraging data on job history and intentions, have been a significant draw for brands looking to target B2B sales more accurately.
The platform's high return on investment (ROI), as noted by the paper (gated), stands at about 20%.
Yet, the costs remain steep, with some premium LinkedIn campaigns costing as much as $300 per 1,000 impressions, significantly higher than rates on other social media platforms.
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