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Here’s How LinkedIn Can Save Itself

Here’s How LinkedIn Can Save Itself

There are a few important changes LinkedIn needs to make in order to save itself from a disastrous fate.

If you happened to catch a glimpse of LinkedIn’s stock price over the last week or so, you might have noticed a straight line downwards on Friday February 5th. That wasn’t a glitch; LinkedIn’s stock price has fallen by over 40% (at the time of writing) since it announced lower-than-expected earnings and lowered projections for the coming year. Investors are losing their patience.

LinkedIn Stock Price Feb 7 16

Despite having a great core product (which LinkedIn very much still does) many of the efforts of the professional network to expand have not yielded strong results. In fact, in a lot of respects, those expansion efforts have rather resulted in an almost ‘worst case scenario’ outcome.

This is not to say that LinkedIn has missed the mark every time it has done something; the acquisition of SlideShare in 2012, for example, was a brilliant move and continues to be among its best. But some of the more universal oversights have cost the network dearly, and there are a few pain points that need to be addressed as soon as possible in order to end the slide into penny stock status (though that’s still a long way off – we hope).

Spamalot Central

Facebook is consistently working on its algorithm in order to ensure that the content you see is what is most relevant to you. The result has been quarter-over-quarter growth in average session time, engagement per post, engagement per user, and more metrics that have come into existence since the advent of social media in the world of marketing.

LinkedIn has taken a slightly different approach.

In order to encourage engagement among its users, InMail exists (which guarantees a user will see the message). Of course, users pay for that privilege, but is accommodating the users who pay for mass (spam) messages like that really worth the detriment that does on the user experience as a whole?

How often do you receive unsolicited messages on LinkedIn offering to sell you traffic, invest in a business opportunity, or, in some cases, enlarge or enhance something? In the last month alone, I’ve been included on over a dozen chain-style message threads (another issue) from users (and including users) with whom I’ve never connected. I pay close attention to who I allow into my professional circle, but all that seems to factor into is my feed content, and has no influence on what kind of trash I’m sent from peddling affiliates.

A better spam filtration system needs to be put in place by LinkedIn and it needs to be put in place fast. More and more users (as exhibited by time on site and people I’ve spoken to) are using LinkedIn for little more than a place to host a resume and highlight some skills, rather than a network where actual business can get done. These filters don’t need to be all that complicated either for them to work (and improve the experience).

First, these kinds of promotional messages (and chain messages) should be restricted to second or third points of contact. Introductions (with character limits or standard content set by LinkedIn) should be the ONLY content that non-connections are allowed to send at the outset. If someone send me something along the lines of, “Thanks for connecting, I look forward to talking to you a little bit more about how we might be able to work together!” I’ll be significantly more likely to look through his or her profile, see what it is they do and, if I see potential, engage with the user and open up a professional dialogue.

I wonder what kind of horrific return these affiliates and marketers see when they purchase InMail packages and generate nothing. That might be a nice short term gain for the network, but as we have seen with this year’s earnings reports, it’s not a solution.

Improved Ad Dashboards

Advertising is any social network’s (even a professional one’s) bread and butter. So, as we’ve seen with Facebook – the shining example of social advertising that marketers love – constant improvements should be made to a dashboard in order to make it simpler, more effective and more evolved. This is an area where LinkedIn has really struggled.

As someone who has been involved in social advertising for years now, it is not hard to tell which network (of Facebook, Twitter and LinkedIn) has seen the slowest evolution in its ads platform. As Facebook and Twitter have introduced new capabilities and made the management of campaigns and creative much more efficient, LinkedIn has done little to evolve its dashboard.

It has certain undergone some aesthetic changes, but ad campaigns function in an archaic fashion. It is almost as if marketers are publishing magazine ads and hoping that they work. Why do I say this? Well, ads can be created…but that’s about it. Editing is a nightmare (if not entirely non-existent) and as you create varieties of your creative, your campaign become overwhelmingly populated with different variations. For a network that is built on professionalism, the ads dashboard is far too disorganized.

A simpler, more tasteful segmentation, like that of Facebook’s setup (which modelled itself after Google) would make life much easier. Moreover, the ability to edit ads and feature proper creative to populate a link preview (as opposed to a tiny window with a fraction of what’s actually on the ad) would go a very long way in driving marketers to use LinkedIn ads more frequently.

Improved Ad Placements

And again with the ads.

Most marketers can agree that the age of the banner is dead. And yet, the right-hand side ad lives on. Granted it is a viable bit of real estate, and LinkedIn has done a better job than Facebook of optimizing the appearance of the RHS ad (instead of several ads scrolling, one appears in a noticeable box at a time) but for advertisers the value is in sharing content to a targeted user’s feed.

That can still be done on LinkedIn, but where both Facebook and Twitter have the network beat is in how to drive traffic from these ads. As noted above, the tiny image that populates a link is completely worthless. A large, eye-catching piece of creative with a clear call-to-action and a different visual structure than a regular post or update is what makes an ad worth the marketer’s budget. LinkedIn needs to make changes to how creative we can get with those ads.

There is no denying the viability of the audience on LinkedIn. Barring those users that are simply sharing spam (I’ll get to that again in a second) there is the most targeted group of people active on the network than any other social platform. So it would make sense that LinkedIn charges a little bit more than other networks for its ad space, but you’re paying five, ten even twenty times as much per click (trust me I’ve done the comparisons) for an ugly, boring ad that can’t be changed once you click ‘Start’.

Ads need to be more visually stimulating if marketers are to see results from them, and their placements need to be more apparent in the timeline than simply allowing users to create Sponsored Updates.

User Purge

LinkedIn has registered about 414 million users. Based on the content I mentioned above that floods my inbox, I wouldn’t flinch if you told me half of those were spam.

OK – maybe not half. But you get my point.

It’s time for LinkedIn to clean up its network. Hitting that critical mass is exciting, and it means charging more for advertising, but as more bots and tactless affiliates join the network, the value of that ad space goes down. Now, the cat is out of the bag as far as how people are using the network. Several are using the online space to store a resume. Others are using it to share content and find a new job. Recruiters are using it to find those users. And so, so, SO many are using it to tell me about an amazing business opportunity that I need to act on or sell me traffic.

To rebound from this devastating hit, LinkedIn may need to sacrifice a huge portion of its user base. That might seem counterintuitive, but one theme that has been apparent in a lot of what LinkedIn has done has been short-term thinking. This is looking at the value to marketers in the long-run.

Conclusion

Nothing here is vastly complex. I’m not suggesting a paradigm shift in how the network functions or what it offers. These are existing models that simply need a tweak.

Of course, this won’t happen overnight. It will take time and it will take just as much (if not more) time to see the effects of this working. But I really do believe that in order for LinkedIn to survive this downward spiral, it needs to look towards simplification, rather than expansion.

As Wall Street begins to shake and the memories of 2000 start to creep back up in their minds, they are taking good hard looks at what is working and what is not. Right now, there is a lot about LinkedIn that scares them. But the potential is certainly there and the product is fantastic. Taking heed of a few of these suggestions might just help it get back into the good graces of the powers that be (and drive up active advertiser numbers as well).

What do you think LinkedIn needs to do to come out of this mess?

Brand Trust is on the Rise

Brand Trust is on the Rise

Every year, Edelman releases the Edelman Trust Barometer, and for the first time in a long time, consumers are starting to trust in brands again.

The Edelman Trust Barometer (embedded below from SlideShare) was first released in 2001, and its purpose has consistently been to show the state of trust of the average consumer (globally) in different bodies. Those bodies range from governments to NGOs to, most recently added, ‘a person like me’. When this last one was added, we started to see some changes in the way marketing and, more universally, business works.

Edelman Trust Barometer Trends Each Year

In 2005-2006, as social media began to take shape and brands began to adopt these new media as a means of sharing a message, reviews, experiences and stories began to rise as the most trustworthy sources for accurate information. Not much has changed today; most of us still turn to websites like Yelp! and TripAdvisor when trying to decide where to go to dinner, or where to stay on a vacation. But this year, something was seen that we have not seen since the Great Recession back in 2008.

The 2016 report shows a significant rise in the trust consumers have in brands themselves. Everyone from NGOs, to businesses, to media to governments saw a rise in the trust factor, with businesses themselves receiving the highest jump of five points. Transparency mixed with an increase in the size of the informed public has led the charge upward. But for the general public (not part of the informed public, that has seen a rise in trust) trust has decreased. We’re now in the midst of a significant trust gap (shown below).

Edelman Trust Barometer 2016 Trust Gap

Now, I won’t dive too deep into the correlations found in terms of income inequality and trust disparity (those you can review in the complete report below) but suffice it to say that it is all pretty interesting. What’s more, the countries identified as having these gaps might surprise quite a few of you (I was certainly surprised by some).

The Exciting Stuff

All of these universal findings are noteworthy – that’s for certain. But when it comes to my interests – both professionally and personally – I have to say that the focus on influence and the value it holds in terms of trust is what I find most interesting.

When it comes to the sources most used (and trusted) for news and information, half – HALF – of the top sources are peer-influenced media. What is peer-influenced media, exactly? Media with low barriers to entry that are influenced by the population around them. So, while newspaper and television might not be peer-influenced (seeing as how there are significant barriers to entry and a small minority controlling what is deemed relevant content) blogs and social media are.

Edelman Trust Barometer Peer Influenced Media

Once again this year, peers and experts are seen to be more credible than executives or even government officials. In fact, ‘a person like yourself’ received an impressive four point bump this year (CEOs received an eight point bump, but are still trusted by less than 50% of the general public).

Edelman Trust Barometer Trust Levels

These rises, after years of low trust levels, present a great opportunity for business. While the informed public has been quicker to trust businesses, there is still an upward trend on which brands can capitalize. The key, however, is going to be living up to expectations.

With every move a brand makes being thoroughly scrutinized by the public, decisions need to be carefully considered. In today’s fast-paced, highly social marketplace, it is hard to understand how so many companies still stumble. Granted, for a lot of organizations, these new media meant adaptation, and many are still in the process of meeting the learning curve. But now that 80% of the general population believes that companies can make money and do good, it’s time to pay more attention to detail than ever before.

The startup culture has turned the CEO role from one shrouded in mystery, to one that the public wants to see more than anyone else. The positive side of this has been the rise in trust (from 41% to 49%) by the general public. The risk (to the executives themselves) is shifting focus away from traditional business metrics to social metrics. This is a hard culture to adopt, but one that the general population is deeming necessary.

See For Yourself

There is (unsurprisingly) a lot of great stuff in this year’s Trust Barometer findings. Scroll through the slides below and see if anything catches your eye!

Thinking About the Future of Social Networking as a Marketer

Thinking About the Future of Social Networking as a Marketer

We might not have a crystal ball, but one thing we can be certain of is that there will be a lot of changes in the future of social networking.

Marketers are always trying to predict the future. We always aim to be on top of whatever’s trending and find a way to (creatively) hijack the medium for our own (or our clients’) benefit. But more often than not, the reality is that by the time the majority of marketers hop on the bandwagon of a new medium, it is already something from which trendsetters have moved away.

The Future of Social Networking

But all is not lost!

Copious amounts of research provides us with insights into the future of social networking, and we can leverage these reports and information in order to keep up with what’s happening and ensure that our campaigns see the results we hope to achieve.

So where exactly are we, and what exactly can we expect to see when it comes to the future of social networking?

Teens Control the Future

In a Piper Jaffray Spring 2015 report, Taking Stock with Teens, research found that teens (aged 14-18) directly control $75 billion in discretionary spending in the United States. That’s roughly 4% of total discretionary spending in the country. Considering the fact that the definition of discretionary spending includes everything from new clothing to candy (basically, if you have clothes, are eating minimum calorie intakes and sleep with a roof over your head, any spending is discretionary) that’s a pretty big chunk of change.

Essentially, the long and short of this tells us that teens have a good deal of control over how their parents spend the money they earn. But it’s more than just the money.

The report also found that while brands are still important, the 2008 recession caused a foundational shift in how teens perceive value. Now, it is much more about the experience than the possession itself. So, if a teen feels a connection to a brand, that is the one they will choose. Brands need to be cultivating relationships, but as noted above, so many start too late.

Businesses are Behind

Not only are brands starting late, but they often find themselves in the wrong place. Facebook recently celebrated a milestone: it now has over two million registered advertisers. That’s not a major ratio of registered businesses (only about 5%) but from a volume standpoint, the network is making positive strides. That’s great! But tastemakers have already started looking elsewhere for their next thrill.

Barely two years ago, Facebook dominated the market in terms of importance to trendsetting demographics (teens and young adults). Now that level of importance has plummeted.

Important Network and the Future of Social Networking

In terms of where these key demographics rank Facebook in terms of importance, it is less than fifty percent as important as they thought it two years ago. Snapchat is about to surpass it and it has more or less swapped places with Instagram.

And yet, the majority of investment is going into Facebook.

Now, this is by no means claiming that every business should be active on Instagram and Snapchat. After all, those networks simply don’t work for a lot of verticals considering the rich nature of the media shared. But ask yourself if you are investing in a network where popularity is declining among your key demographics. If the answer is yes, you need to look elsewhere for success.

Mobile More Important than Ever

This is nothing particularly new. On the heels of Google’s ‘Mobilegeddon’, as the update has been dubbed, it has never been clearer that optimizing everything for mobile is a key (if not the key) to success. But having a responsive or mobile-friendly website is the highest point at the tip of the iceberg.

If you’re running a campaign, think mobile-first. If you’re sharing content, share something that people will be able to digest on a mobile device. The question you need to ask yourself until it becomes second nature is, “Will this work on a smartphone or tablet?” If there is even a moment of hesitation in your response, you need to rework the idea until it works on a mobile device.

Hypertargeting

Your audiences are out there. I say audiences because for every bit of content, every campaign, every new product, there is going to be a niche much more responsive what you have to say than anyone else.

The ability to hypertarget consumers has never been easier. On social media, people share more information about themselves than even the most detailed of censuses or surveys could ever collect. We, as marketers, need to start thinking about these data as segmenting criteria, and cut our audience down to the very small groups that fir a selection of characteristics. Then, we need to craft our communications strategies to appeal to the idiosyncrasies exhibited in each group.

Yes – there is more work involved. But imagine having the ability to skyrocket your conversions across hundreds of audience segments as opposed to hoping for a slightly above average conversion with your larger, semi-segmented audiences.

Conclusion

There is plenty more to come on the social networking front, but these trends are rapidly approaching (and, for the most part, already here). With these few tidbits in mind, we can begin to think somewhat differently about our next campaign and our overall marketing initiatives in order to keep with the upward swing of things, and avoid jumping on a bandwagon that has already been abandoned by the demographics that matter most.

Why Businesses Are Wasting Their Time Fighting the Share Economy

Why Businesses Are Wasting Their Time Fighting the Share Economy

The share economy is here to stay.

The share economy is here to stay, and businesses should stop wasting their time trying to fight it.

In the 1920s, H. Armstrong Roberts founded one of the first stock photography agencies. This started a trend whereby companies of the sort would build stockpiles of images and sell their rights to individuals looking to use them. By the late 1980s and early 1990s, Getty and Corbis ruled the marketplace, and essentially had the luxury of setting their own prices – one that comes with any (dare I say it) monopolistic or oligopolistic market structures.

But in 2000, something happened.

With the advent and excitement of the fast-moving information superhighway we fondly refer to as the Internet, online services started popping up offering photos at a fraction of the cost of these major brands. Slowly but surely, as competition opened and there was no overcoming it, prices shifted downward with the seemingly endless supply made available online, and the marketplace became incredibly saturated. Now we’re at a point where Getty offers completely free images and asks only that they be placed on a website with a backlink to the site.

Oh, how times have changed.

Communications platforms are much more than selling tools – they are an integral part of economic shifts. So why do some major brands feel as though they should be fighting the share economy when history (and economic theory) dictates that sooner or later, they will have to adopt it?

The Rational Consumer’s Decision Process

Let’s say I, the rational consumer, am going a vacation to (name sunny destination here). I’m excited, but budget constraints have left me searching for a great deal. I’m not particularly picky when it comes to the lavish lifestyle; I simply need a place to eat, sleep and apply copious layers of sunscreen. A cost analysis by Pricenomics comparing hotels in major US cities to renting an entire apartment or a room on AirBnB found that when renting an apartment, travellers could save an average of 21.2%, and when renting a room (roughly the same amenities you might expect to find in a hotel room) travellers saved a whopping 49.5%.

Now I, the rational consumer, know a good deal when I see one. So I will take it. And if I can’t take it on AirBnB – say, for example, the site is banned in my place of residence – I’ll find another site.

When I was in Chicago recently, I used UberX for the first time. We have Uber in Canada, but UberX has yet to make its way to the Great White North and I had heard plenty about it, so I thought I would give it a try. When I took a regular taxi from O’Hare International to my hotel in Downtown Chicago, the fare came to roughly $57. From what I heard, that’s pretty standard. When I took UberX at the height of rush hour back to the airport, my fare came to $30. Now unless you don’t discriminate at all when it comes to prices, why would you not consistently take the option that is 47% less expensive?

Considering the hour-long drive, I also had a chance to chat with the driver of the car. He told me that he was a real estate broker who decided to download the UberX app because it was an easy way to make some extra money on the way home from work. Now, behavioural economics dictates that I would be uncomfortable asking a stranger for a ride to the airport, or even accepting a free ride from a stranger making the offer. But the beauty of a product like UberX is that the process is mutually beneficial, and everyone walks away having benefitted from the transaction.

Demand Trumps Tradition

How many New Yorkers do you know that absolutely love going to Times Square for New Year’s Eve? Yeah – I don’t know too many either. But the revenue potential for an apartment-dweller at that time of year in (or near) that location is phenomenal. Imagine making your month’s rent (or close to it) in exchange for a four day vacation?

Increasing demand in the share economy.

Now, put yourself in the renters position. The average cost (any day of the year) for a hotel in New York City is $245. (Source) The average cost for an entire apartment in New York City with AirBnB? $180. (Source) With savings over 26.5% (on average) you would be hard pressed not to go with the latter option. (Of course, this is assuming a price discriminating consumer.)

Conclusion

As demand remains consistently high, there will always be a market for the share economy. Where there is a market, there are entrepreneurs trying to capitalize on the potential. As long as information is free flowing, people will find a way to exploit these opportunities. And rest assured, for as many businesses as there are looking to stop the share economy, there are just as many looking to retire off of it.

The one thing that stands in the way of the share economy really taking flight as a mainstream commercial marketplace is taxation. So long as the government can find a way to regulate and effectively tax the earnings coming from activities within the share economy, it will thrive. There may be some barriers to getting that done quickly, particularly with the processes and red tape involved. But that has never stopped these kinds of markets from flourishing and eventually being regulated in the past. Maybe the best example of that in recent memory is Colorado.