Amid the increasingly crowded social network landscape, few platforms enjoy as clearly defined a role -- or as robust a user base -- as professional networking site LinkedIn. And with an estimated $80 million in funding still in the bank, the already-profitable company is in a unique position to maintain its leadership position well into the future, says CEO, co-founder, and chairman Reid Hoffman.
There's good reason to put some stock in Hoffman's assertions. After all, LinkedIn isn't his first online rodeo. Far from it, in fact. Prior to LinkedIn, he was executive vice president of PayPal, where he was actively involved in orchestrating the company's acquisition by eBay. Over the years, Hoffman has helped finance more than 60 companies, many from initial conception. His list of angel investments includes a host of well-recognized online properties, including Facebook, Digg, Technorati, Funny or Die, and Flickr.
Reid Hoffman is the founder of LinkedIn.
In this exclusive interview with iMedia Connection, Hoffman details the marketing and professional development opportunities available via LinkedIn's expanding platform. He also provides insights on the competitive social media landscape, as well as what he sees as being the next hot online technology sector.
iMedia: LinkedIn entered the ad network fray last September with the debut of the LinkedIn Audience Network. What kind of results have advertisers on the network seen thus far? And how are you distinguishing this service in the crowded ad network space?
Reid Hoffman: We're really looking to improve the overall ad network landscape -- particularly for B2B marketers who have been largely underserved in this space -- by allowing marketers to target campaigns to specific audiences. I can't share any specific results, but I can tell you that a lot of advertisers find our unique approach compelling.
The LinkedIn Audience Network allows marketers to target specific audience segments based on the highly accurate data that our more than 39 million members share publicly in their LinkedIn profiles -- such as job function, company size, and seniority -- and to do that at scale across the web. So, let's say a B2B marketer wanted to reach small businesses, IT managers, or corporate executives -- we can deliver their ads specifically to those segments across a large network of quality websites.
iMedia: Where's the biggest opportunity for brand marketers on LinkedIn?
Hoffman: The biggest opportunity for brand marketers is to provide value to an audience of influential, ambitious, and affluent professionals who are focused on being successful in their careers -- help them be successful or help them enjoy success, and you'll have some loyal customers for a long time.
We're still very big believers in the value of display advertising when done right -- which not only requires great creative execution by the client, but also requires the publisher to provide the right canvas. We're able to deliver ads to specific segments based on the profile data LinkedIn members share. By limiting the number of ads on our pages, our members actually tend to interact with them as part of the LinkedIn interface.
iMedia: How can marketers go beyond display advertising campaigns on LinkedIn?
Hoffman: One way would be LinkedIn Polls, where marketers can deliver a co-branded poll to specific segments of the LinkedIn audience, and then examine the responses by job title, industry, company size, etc. We're taking this approach to another level with our partnership with CNBC, where members will take the poll online at LinkedIn and then CNBC's on-air talent will discuss the results live.
Another offering, which we're currently piloting with a few partners, is a whitepaper distribution program, where we'll help marketers distribute their content and generate leads on the LinkedIn platform. We're also seeing some smart use of "organic" LinkedIn assets as part of advertising campaigns. For example, Microsoft recently ran a campaign for its BizSpark server that features an employee in the ad itself. In one of the executions, there was a link to that employee's LinkedIn profile, where a customer could then learn more about the employee, see how they were connected to him, see who recommended his work and his professional experience, etc.
The last item that I'll mention in our innovations in advertising is the approach of stoking conversations on LinkedIn. There are some significant ways to engage in both of these areas, whether it's working with us to create and promote a "Featured Question" or by sponsoring federations of groups that are thematically similar.
iMedia: What is the biggest misconception about LinkedIn that you've heard circulating among the marketing community?
Hoffman: There are two perceptions that we bump into: First, because our advertising business is only about a year or so old, there are some marketers who aren't aware that we accept advertising. Let me make it very clear: We do!
Second, there is a perception that professionals are primarily looking for jobs on LinkedIn. Finding new career opportunities or finding potential employees is definitely something we do and do well. However, it's not the only reason people are using LinkedIn. Outside research by Anderson Analytics confirms that less than a quarter of LinkedIn members are actively looking for work. We see hedge fund managers doing research on LinkedIn. We see business development professionals brokering deals on LinkedIn. We see executives asking their networks for advice on which advertising firm they should use. In fact, executives from all Fortune 500 companies are LinkedIn members.
We are more of a business professional community than we are a job site. We're increasingly seeing marketers recognize the potential of advertising on LinkedIn since LinkedIn has an audience that is made up of senior professionals who are serious about their careers.
iMedia: What are a couple of your own personal "best practices" for professionals looking to present and promote themselves on LinkedIn?
Hoffman: I actually think every individual is now an entrepreneur, whether they recognize it or not. The average job length is now around two to four years. That makes you a small business. You are the entrepreneur of your own small business. How do you get to your next gig? How do you progress in your career? All these things now fall on the individual's shoulders. They're essentially entrepreneurs in terms of the business of themselves and how they drive that. So how do you get your next job opportunity? How do you get a promotion? All of that stuff comes from how you manage the network around you. Which is, by the way, what gave me the idea for LinkedIn.
That being said, I have two pieces of advice: Get prepared and get involved.
First, invest some time in making sure your profile is complete. We offer a lot of advice on the site and at our learning resource, and there was a good piece loaded with advice here on iMedia Connection recently. But at the very least, make sure you provide a descriptive headline for what you do, provide a summary of your professional accomplishments and skills, and provide your entire work history. Be selective in the recommendations you make and those you solicit and accept, and also be selective in building out your network; who you're connected to (and who you're not) says a lot about you as a professional.
Secondly, get involved with your network. Share advice and insights in Answers, join the professional groups that matter to you, and use the Status feature to let your network know what you're up to. Put the LinkedIn Application Platform to work -- you can use the SlideShare application to share presentations, you can track what's being Twittered about your company using the Company Buzz app, and you can share recommendations about books with your network.|
iMedia: What's the biggest misstep you've seen people make when presenting themselves professionally on LinkedIn?
Hoffman: There are a small number of members that see "connection building" as a sport and try to connect to as many people as possible, but in all honesty, that's not going to serve you well. It dilutes the power of your network. It's more powerful to have a small network of high-quality connections that you want to see updates from and keep in touch with than it is to have a large network of loose connections you don't know very well.
The bigger and more frequent mistake we see people make is not completely filling out their profiles. By having a profile on LinkedIn, professionals have the ability to put the right information in the hands of potential clients, partners, and employers. Essentially, you have the opportunity to make a case on the web for why someone should work with you or hire you. If you fill out your profile completely, you're putting your best foot forward online, and that's important in an age where people are doing a Google search on you before meeting you in person.
It's worth noting that this is a smart community of professionals, and they'll see through attempts at blatant self-promotion. If you're in the Answers section of LinkedIn looking for potential new clients, showcase your professional value with selective and well-thought-out questions and answers that truly add value to the community. That approach is more likely to win you new clients and also help you build better business connections.
iMedia: It's been reported that 80 percent of the $100 million LinkedIn has raised is still in the bank. What are you planning to do with all that money?
Hoffman: We've been profitable for two years now so we raised the money to give us options, whether that's through acquisitions, international expansion, or even for the development of new products.
iMedia: What will the next generation of LinkedIn look like? Where are you looking to make changes, and what new features or capabilities are you looking to add?
Hoffman: We're constantly thinking about ways we can help professionals achieve their goals quicker and more efficiently by leveraging their networks. Our goal is to help professionals find the experts and information they need to quickly answer tough work-related questions.
We're also looking at ways that we can help companies and the enterprise as a whole. For example, we just recently announced a partnership with IBM where LinkedIn functionality will be integrated into Lotus Notes, giving people easy access to their network while they're using a communication tool.
iMedia: From a business standpoint, how would you like to see LinkedIn evolve? You've hinted at an IPO in the past. How feasible is that in this economic climate? Alternately, from an acquisition standpoint, what types of companies do you see as being the most appropriate suitors for LinkedIn?
Hoffman: Since we're independently owned and profitable, we are building a company and a product to help professionals throughout their entire careers. We're passionate about building a company that will help professionals do their jobs better, and we hope to make the world a better place as a result of improving productivity on a global scale. We've always believed that there would be an IPO in our future, and since we are profitable, we can do that when it feels right.
iMedia: Generally speaking, what's the most prominent demographic on LinkedIn? What age group or demographic are you missing, and how do you plan to attract them (if you're interested in attracting them at all)?
Hoffman: Most of the third-party measurement firms (like Nielsen and Quantcast) all say the same thing: that the typical LinkedIn member is in their early 40s, is making over $100,000 per year, is well-educated, and is likely to be a decision maker in their company. Anderson Analytics found that "senior executives" make up 28 percent of the LinkedIn membership, which would amount to about 10.6 million people.
When you use those same measurement services to compare LinkedIn's audience against the traditional business sites, it appears that LinkedIn's members are younger but making more money and have more responsibility in their companies. To us, that says there's a "new breed" of professionals emerging online that may not be found on a traditional business media site: A driven audience who recognizes that their professional network can help them excel in their careers. That's the audience we intend to serve now and in the future.
iMedia: LinkedIn has gone to great lengths to distinguish itself from many of the other social networks out there, such as Facebook and MySpace. (To use your own metaphor: MySpace is the bar, Facebook is home, and LinkedIn is the office.) But do you still see these networks as your competition in a sense? And if not, who (or who else) would you consider to be LinkedIn's main competitors?
Hoffman: The main difference is that LinkedIn is 100 percent professional. When people are on LinkedIn, they're actively looking for new clients, seeking and sharing advice and insights, and advancing their careers. It's where professionals go to get business done. If you're looking to compare LinkedIn to, say, other professional networking sites, there simply isn't another site that even comes close to us in size since we have over 39 million members around the world.
We're frequently seeing LinkedIn included on the same media plans as The New York Times and The Wall Street Journal. We feel that that change is occurring largely because of the professional audience LinkedIn serves and the business answers that our audience is looking to address.
iMedia: While LinkedIn, Facebook, and MySpace are certainly the social networks being discussed the most, the broader landscape is a crowded one. How do you think this field will shake out? In other words, is a fractured landscape sustainable? Or at some point do you think users will grow weary of maintaining multiple profiles and looking for a one-stop social network shop?
Hoffman: Our research indicates that people will always want separation between work and play, and so we absolutely believe that people will have no problem maintaining two social profiles -- one used almost exclusively for work and business, and the other used primarily for communicating with friends and family. Beyond that, it's hard to imagine people wanting to maintain dozens of separate networks.
iMedia: In addition to your activities at LinkedIn, you're a well-known and well-respected Web 2.0 investor. How has the current economy influenced your activities on this front? And what online technology sectors, outside of social networks, have caught your attention lately?
Hoffman: I actually find Twitter and that space to be quite interesting. In fact, last year I invested in a company called Ping.fm, which is a simple service that allows you to post to multiple social networks with a single message. The ability to broadcast yourself quickly to large audiences across multiple platforms is something I'm intrigued by.
Lori Luechtefeld is editor of iMedia Connection.