Like other virtual platforms, the COVID-19 crisis is having a mixed impact on LinkedIn.
“In the short term, the platform is a playground for business professionals to stay connected with colleagues and clients,” Jillian Ryan, principal analyst at eMarketer, writes in a new note to clients.
Through its fiscal fourth quarter, Ryan therefore expects LinkedIn to enjoy a spike in usership as professionals are forced to find other work, network with colleagues and attend to their careers.
Conversely, LinkedIn will likely see a decline in interest from ad partners, many of which are reassessing their strategies in light of the pandemic.
“Advertisers that are looking to stay away from coronavirus content might be skittish about spending ad dollars if brand safety is a concern,” according to Ryan.
In early March, eMarketer predicted that LinkedIn’s annual ad growth would decline from 36.5%, last year to 17.6%, this year, and then to 11.9% in 2021, and 9.1% in 2022.
In dollar terms, that would still amount to ad revenues of $1.85 billion, this year, $2.07 billion in 2021, and $2.26 billion in 2022.
Along with advertisers, Ryan suspects LinkedIn users are also going to grow weary of all the pandemic-related content.
As a result, “User fatigue over time could cause a drop in engagement,” she suggests. “How much COVID-19 content can users really stomach?”
Rather than a passing problem, however, such a decline in engagement might hurt LinkedIn in the long term, Ryan warns.
EMarketer separates LinkedIn’s ad business into sponsored job listings and display ads, which the platform calls “Marketing Solutions.”
“Sponsored job listings will drop pretty significantly and will likely stay depressed until companies feel the recession is over and are financially confident to begin hiring again,” according to Ryan.
On for Marketing Solutions, ad revenues have apparently been growing with increased engagement on the platform, which Ryan believes is a result of LinkedIn becoming more of a social network and less of a “job board.”
That said, Ryan still expects Marketing Solutions revenues to decline in the near term, particular as business-to-business companies cut their marketing budgets.