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LinkedIn beats revenue expectations thanks to focus on sponsored content

A move away from traditional advertising to more sponsored content appears to be paying off for LinkedIn, after its Marketing Solutions ad business reported revenues of $154.1 million for the first quarter of 2016, up 29 per cent year-on-year.

According to the business-focused social network, sponsored content now makes up over half (56 per cent) of its total ad revenue, an increase of approximately 80 per cent over the last 12 months, equating to around $86 million.

Total revenue for the quarter came in at $861m - a 35 per cent increase from the same quarter in 2015 - beating Wall Street expectations and pushing shares up 8 per cent in after-hours trading.

LinkedIn chief executive Jeff Weiner said a new mobile experience was “helping drive strong levels of engagement across the platform,” which also drove the changed advertising strategy. Traditional display ads are limited to desktop, whereas sponsored content has the added benefit of also being able to run on mobile. Seeing as 58 per cent of LinkedIn users are logging in on mobile devices, it makes sense to focus on the sponsored content and take a programmatic approach to display ads.

Figures also show that recruiters are continuing to spend on LinkedIn, with 'talent solutions' business revenues up 41 per cent from the previous year.

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