Linkedin’s Next Market: Education?
Posted: August 20, 2013 Filed under: Education | Tags: Edtech, Linkedin
Linkedin is taking its younger users increasingly seriously.
While it has historically been a resume-centric *professional* social network and, as such, has attracted users that are either employed or in between jobs, it now appears to draw more attention to its younger demographics. The social network as a product has never really appealed to students as they generally have little credentials to brag about on an online public resume and are not yet in the market looking to sell them for a full time job.
The way Linkedin is able to monetise its ’employable users’ is by upselling them premium subscriptions, by charging corporate HR departments for various recruitment services and by selling advertising space to marketers. Linkedin made c. $5-6 per user in 2012.
Students and recent grads now account for 30 million profiles (13% of total user base) and are the fastest growing demographic (doubled since October 2011). That is bound to keep growing now that anyone older than 13 years of age can sign up to the service. Students are more difficult to monetise: they are certainly not big buyers of premium accounts; they are less attractive to employers and recruiters as they are not actively in the market for a full time job; they tend to have limited disposable income and therefore are not particularly interesting to advertisers either. However they will be in the market for a job soon, which is why Linkedin needs to catch them earlier in their pre-professional life. And in the meanwhile Linkedin can monetise them in other ways: it can sell their leads to Colleges and Universities for example.
It can do that via an elegant product which makes use of the massive amount of rich career data that Linkedin already has, presenting it in a way that teenagers can consume and engage with: Linkedin has also just launched University Pages where prospective college students can look at possible career paths, employers and stats for alumni, and universities can engage directly with them. I would not be surprised if Linkedin soon allowed students to apply directly from the University Page or at least started taking the lead as opposed to sending the user away to the university website.
While attracting students is a way to acquire core Linkedin users earlier in their life cycle, there is a big market in education lead gen itself. According to GSV Advisors the US higher-education market alone is worth north of $500 billion a year. A simple back of fag packet calculation gives a number in a similar ball park ($18,500 average tuition c. 20.4 million undergraduate and post-baccalaureate enrolled students). And non-state universities devote large marketing budgets to acquiring students, as a recent report from Iowa Senator Tom Harkin highlights (23% of revenues were spent on ” marketing, advertising, recruiting, and admissions staffing”). Similar dynamics are developing in the UK market as well, where universities are urged to take a more commercial approach to marketing to prospective students. Linkedin realises there is a big market there.
Last, I think Linkedin will be an active acquirer of edtech startups over the course of the next few years as its education proposition becomes clearer. In particular startups that have the ability to acquire deep data about student profiles, their academic performance and skills. Linkedin has very limited data on students for the very simple fact that students, unlike workers, have much shorter resumes and Linkedin is not (yet) able to capture much data about their academic life.