LinkedIn's Advertising Boom: How It's Becoming the New Go-To Platform for Digital Marketers

Microsoft Corp MSFT-owned LinkedIn has recently significantly advanced in the digital advertising market. 

In 2023, its annual advertising revenue surged to nearly $4 billion, marking a 10.1% increase from the previous year. Research group Insider Intelligence forecasts a further 14.1% growth in 2024. 

This rise in revenue is attributed to heightened demand, causing a spike in advertisement prices on LinkedIn. 

Some marketing agency executives and advertising insiders have observed up to a 30% increase in ad prices over the past year, the Financial Times reports.

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LinkedIn's success in attracting advertisers, partly due to the better-targeting capabilities of its 1 billion users, coincides with a shift away from Elon Musk's platform, "X." 

In response to an anti-Semitic row involving Musk, major companies like Apple Inc AAPL, Walt Disney Co DIS, and Walmart Inc WMT have distanced themselves from "X." 

LinkedIn has capitalized on this shift, promoting itself as a respectful and reliable advertising partner.

Traditionally known for job hunting and networking, the platform has evolved to include a social media-like feed featuring career advice and executive essays, FT writes. 

Despite this growth, LinkedIn still holds a relatively small share of the U.S. digital advertising market at 1.5%, compared to Alphabet Inc GOOG GOOGL Google's 27% and Meta Platforms Inc's META 21%, according to the Financial Times.

Penry Price, LinkedIn's Vice-President of Marketing Solutions, attributes the increased demand to the platform's unique targeting abilities, leveraging data on job history and intentions. 

This targeting strategy has yielded significant returns on investment for advertisers, with some marketers reporting a 20% profit on their advertising spend.

According to FT, however, the costs for advertising on LinkedIn remain high, with some premium campaigns costing up to $300 per 1,000 impressions, significantly higher than rates on Meta and "X." 

The Kite Factory, an advertising agency, notes that most LinkedIn campaigns cost between $17 and $25 per 1,000 impressions.

Looking to expand its reach, LinkedIn is testing services beyond its platform, including using its data for targeted advertising on connected TV apps and a premium advertising slot similar to "X's" Amplify. 

While LinkedIn declined to comment on this new slot, its evolution into a platform for thoughtful content sharing draws comparisons to Twitter's earlier days.

Price Action: MSFT shares traded higher by 0.28% at $375.11 on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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