It’s been a little more than three weeks since Microsoft leaned down from its fluffy white enterprise cloud and swept up the angelic LinkedIn for the divine price of $26.2 billion.
Back down here on earth, the advertising industry is now trying to fathom how it will be affected by the fusion of the world’s leading professional software suite, which is used by 1.2 billion Microsoft Office users, and the leading professional network, which is home to 433 million LinkedIn members.
So what made Microsoft take the leap to acquire LinkedIn before other players such as Facebook snapped it up, was it worth the price, and what will the implications of the merger be for B2B advertisers?
The acquisition reinforces Microsoft’s commitment to be a leading technology and service provider within the professional sector with the likes of Office 365 and Dynamics Cloud, moving further away from the affiliation with Nokia.
What is immediately clear is that the acquisition will result in a treasure trove of professional data like no other. While Microsoft Office Graph provides hordes of data relating to contacts, messages, calendar entries, and context, LinkedIn’s data stores relate to employment, education, skills, co-workers, and recruitment. Effectively integrating these largely distinct data sets creates opportunities to understand and target business audiences like never before.
Of course data is only valuable if you know what to do with it. The next challenge for Microsoft will be filtering and refining data stacks to understand the relationship between diverse data points. By enriching existing information with LinkedIn data to create 360-degree profiles of Office users, and utilizing daily online and personal activity combined with contextually specific factors, advertisers will be able to predict the content users would like to see and deliver a relevant personalized experience. Advanced technologies will become critical in dissecting broad audiences into increasingly segmented and refined categories that can be managed and utilized for improved ad targeting and delivery.
Microsoft will face a number of challenges in making the most of the LinkedIn acquisition, not least in integrating the platform into its existing infrastructure. The company will also have to overcome user concerns about the extent and depth of data it will hold about them, and find a solution to the fact LinkedIn relies largely on users to update their profiles, meaning much of its information is potentially outdated. However, the LinkedIn platform is likely to be an asset in itself with its advanced mobile design and established social DNA, and the launch of a programmatic offering highlights the potential the network has to reach business targets and generate ad revenue.
Microsoft isn’t the only company investing in the enterprise market — seen to be significantly more lucrative than the consumer Web — and its acquisition of LinkedIn will help it compete with the likes of Google Apps for Work and the imminent Facebook at Work. It’s still early days in the acquisition process, and we’re yet to see exactly how the industry will benefit, but the merger has the potential to deliver a unique opportunity in targeting the professional sectors at a highly personal level, dramatically improving engagement and relevancy. Managed properly in combination with the right analysis, this really could be a match made in B2B heaven.
Giovanni Strocchi, CEO at ADmantX