LinkedIn Marketing Chief Shares Company's Strategic Direction Plus B2B Business Opportunities

At the BMA Chicago luncheon on November 6, 2008, Patrick Crane, LinkedIn’s Vice President of Marketing & Advertising, shared insights about LinkedIn, Inc.’s strategy as well as ideas for B2B executives to use the emerging platform to drive their businesses. Held at the Standard Club, the event was the second largest attendance ever: executives don’t know exactly what to use LinkedIn for, but it’s clearly an “active curiosity,” and Crane did an excellent job at level setting while keeping advanced users like yours truly engaged.  This is #1 of two installments (#2 here).

As he was speaking to marketing executives, he first spoke about some of the challenges of marketing the company and building the brand before turning to suggestions for how senior marketers could tap LinkedIn to drive revenue.

On LinkedIn’s Vision and Marketing Strategy

• LinkedIn is a new global medium of communication and collaboration for executives
• Business connections are accelerating, and the focus is on “friends”—and even more on “friends of friends”
• LinkedIn’s marketing plan when it launched in 2003 was for the few employees to “invite everybody you know”
• There was an inflection point of sorts in 2006-07 because quality improved, which increase the value derived (he was basically describing the critical mass/network effect)
• LinkedIn today still has little brand awareness, which the company is trying to address, largely through alliances
• LinkedIn makes the “six degrees” concept real (for business executives) because it provides useful intelligence they can act on
• For example, Crane cited a private equity firm that used LinkedIn to connect with several executives in India for due diligence; it made the investment and quickly realized $250 million in profit
• LinkedIn accelerates the way people have been doing business for years
• The brand concept is enabling collaboration: Apps reflect this as they enable cross-boundary sharing
• LinkedIn has invested significantly in its blog, which is now the eighth-most read corporate blog
• For the 21st century Web 2.0 economy, using LinkedIn is like using the telephone was at the beginning of the 20th century, during the early industrial economy; it is core, but in the beginning, people need to learn to appreciate its relevance
• With respect to marketing, don’t forget to have fun and enjoy yourself. LinkedIn made two versions of the video that promoted its Spanish site: one was more traditional, and the other was employees trying to say things in Spanish while goofing around.  Of course the more “informal” version had about triple the views of the buttoned down version
• LinkedIn is vying to be a huge brand, but its budget is modest.  Hence the partnerships with CNBC, Banana Republic and others

Advice for Marketing Using LinkedIn for Marketing

• Although it may seem counterintuitive to most CMOs, LinkedIn presents a great crowdsourcing venue: ask your customers!  Crane shared an impressive example in which Southwest Airlines’ CEO asked a question about how airlines could improve passenger productivity.  Tremendous results: customers gave all kinds of valuable advice and generated extensive goodwill, all for millions to see
• Crane presented a timeline plotting membership against time, which was future focused:
  • 2003 > 300,000 members
  • 2005 > 3,500,000
  • 2006 > 13,000,000
  • 2009 > 60,000,000
  • 2012 > 150,000,000
• Businesses can leverage the significant insight that LinkedIn has about its members when they respond to surveys, polls and targeted advertising—even though LinkedIn won’t share the identities of who exactly responded to what. It will share characteristics.
• Crane’s “dream headline” was: “LinkedIn now more popular than Starbucks.” Obviously reflects the brand vision.

Q&A

• Would LinkedIn and Facebook ever get together?  No, people like to keep personal and business distinct
• How to decide whether to accept someone’s invitation?  Simple: “Would you back the person?”  Having someone among your LinkedIn “1st level” connections represents an endorsement of sorts because you have to be able to introduce the person
• The system is based on trust and introductions, but LinkedIn doesn’t crack down on early supporters who are “super connectors,” or LIONs, even though they don’t use the site they way it was designed to be used
• If you want to create a new business, look for the experts in that area of experience or knowledge and engage them in Answers
• Ask (B2B) clients for recommendations; they carry a lot of weight
• The best way to conduct “tasteful” business development is to help other people; it generates karma and goodwill
• Quality trumps quantity in networks; LinkedIn believes that, if you build a network of one hundred high quality people, “good things will happen”
• LinkedIn can increasingly be regarded as a global “early warning system” for trends because the behaviors emerge on LinkedIn; Crane cited green business as one example
• The most wired country is Denmark, where 20% of all white collar workers are on LinkedIn; by that definition, the U.S. lags at 12%
• China?  LinkedIn is waiting; they realize that they have to think through the cultural differences.  India is a natural and is growing quickly
• Politicians are using it; Obama, for example, asked questions before a big California fundraising trip, and the questions engaged influencers
• 5-7 million LinkedIn members manage or own small businesses, and they depend significantly on the advice of their friends prior to making major purchase decisions
• Recommendations reflect the recommender as well as the person s/he’s recommending
• All LinkedIn activity is tied to the Profile, and it’s transparent, so LinkedIn doesn’t have hateful or badgering
• Like all websites, LinkedIn complies with Homeland Security when legally obligated
• In response to my question of whether LinkedIn was considering an aggressive strategy to syndicate profiles for enterprise consumption, Crane was coy, but he did add that SAP had invested in the company
• View photos of the event here, courtesy of BMA

Analysis

• Crane’s example of the telephone is an excellent one, if one can imagine the dawn of the 20th century: even though phones were increasingly common, many people did not think about using them, or applying them to business; that happened over time. My Web 2.0 and LinkedIn advisory work with companies bears this out: most executives intellectually understand that they can connect with many people, but they can’t imagine how it will change their businesses—and faster than they realize. People would talk on the phone first as a curiosity that they didn’t take seriously. Who would want to connect with someone they couldn’t see for serious discussions?
• LinkedIn is very in synch with Web 2.0, even though it’s not currently considered as sexy as Facebook or Twitter. Everybody with a mobile phone and a Linkedin Profile is open for business globally. The people who can represent themselves, through other people and public deeds, will have the advantage. It’s that simple.
• If you’re a visionary company, you are going to realize that the more visible employees you have, the better relationships your company will have, the more profitable accounts you’ll have. The centralized selling and marketing of the 20th century will still have a role, but I predict it will morph to largely supporting people (employees, customers, bloggers, students, politicians…) who will do much of the end influencing. Yes, most “selling” will be distributed: people with no formal affiliation with your company will influence a huge portion of sales. Linkedin get get you a fast start—today.
• The most important thing for B2B marketers to take away: B2B is more vulnerable than B2C. What to do: realize that you need to have a visible executive to aggressively apply Linkedin to internal and external processes. If LinkedIn turns out to be the telephone of the 2010s, the sooner you learn to apply it to your business, the more competitive advantage you’ll enjoy. If you haven’t seen it yet, you may want to explore the Social Network Roadmap, which is designed to facilitate enterprise adoption of Web 2.0, including LinkedIn. Full disclosure: I designed it.
• Think about Apps a minute. As the veteran of 2 global consultancies, I appreciate the power of collaboration that’s enabled by (information) technology. This was once the purview of large firms that could afford to make the sizable investment required. As I have often written (in good company), Web 2.0 is wreaking havoc with the economics of the large firm because now individuals can have similar collaboration capabilities for almost free.
• Enterprise executives’ key blind spot is failing to appreciate the power of emergent organization and cross-boundary collaboration. This is why LinkedIn’s vision for Apps is so transformational: experts can coalesce rather seamlessly around idea and opportunity, without having to incur the cost of employment or other “hard bonds” that were previously table stakes. This is why most organizations will be well served to understand Web 2.0 and apply it as quickly as feasible: as the telephone and the automobile remade towns, Web 2.0 will remake organization itself.