05 July 2016

EDITORIAL - SalesForce Bid Increased Microsoft's Cost per LinkedIn Member/Subscriber

According to details released on Friday, a bidding war with Salesforce.com increased the cost Microsoft paid for LinkedIn by nearly US$6 Billion.


As InfoStream reported earlier, no matter how you attribute the cost of the LinkedIn acquisition, the cost (433 million LinkedIn Members @US$60, 105 million Active Members @US$254 or 2 million Paying Subscribers @US$13,000) of acquiring a member/subscriber based enterprise has increased rather dramatically.

The casual observer may wonder why this increased value and interest in member or subscriber driven enterprises. The reader may find the answer surprising.

Instead of reducing the cost of client acquisition, the Internet has actually driven expenses higher and made many campaigns less effective.

There are several reasons for this: The number of 'channels' increased substantially further fragmenting the audience and increasing the cost to reach consumers; The promise of big data and campaigns using SEO or SEM tactics did not anticipate a dramatic move to mobile devices where these tactics are much less effective; The rising skepticism of the mobile consumer who values authenticity and self discovery over 'blast and cast' voucher, coupon and discount campaigns; and finally, The agility of the member/subscriber based enterprise to respond to 'trending' consumer demand with speed (time to market), trust (brand confidence) and the reduction or elimination of market-wide campaigns (lower direct cost, higher margin).

In the war rooms of content and media channels, advertising agencies and marketing departments there is consternation and confusion about what to do next.

Against this backdrop, the idea of acquiring an existing base of 'members or subscribers' may be seen as the least cost, most timely and therefore the most financially efficient method of developing or increasing the number of customers that can be exposed to a brand's product or services.

Organizations that develop members or subscribers in a trusted ecosystem are therefore accorded the highest value by brands who wish to expose their services or products to prospective clients.

About Executive Producer, Larry R. Evans:
Larry Evans is a futurist, a brand developer and a collaboration advocate. He is Principal of The Paradigm Corporation, which is headquartered at Thunder Ridge just outside Crossfield, Alberta, Canada. He is known for bringing a unique and predictive lens to paradigm shifts during a career that spans 45 years. Now from his wheel chair, he brings a grounded, tenacious view of brand, client rights and trusted relationships for the digital age. His perspective and values influence his life, business and ministry.

No comments:

Post a Comment