How genuine communication and engagement in social media helps businesses grow relationships with employees and customers while improving the bottom line
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Relationship Economics: How to improve employee and customer relationships with social media by LinkedIn and Brian Solis
1. RELATIONSHIP
ECONOMICS:
How genuine communication and
engagement in social media helps
businesses grow relationships with
employees and customers while
improving the bottom line
October 2014
By Brian Solis
with Jaimy Szymanski and Rebecca Lieb
Custom research by Altimeter Group on behalf of LinkedIn
2. RELATIONSHIP ECONOMICS:
Relationships Matter
Executive Summary
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for how information is shared and consumed. With social, mobile, and
real time at the heart of consumer technology, everyday people are now
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that wish to thrive in a social economy must study their relationships
with customers, employees, and prospects as part of a larger investment
in relationship economics. Relationship economics dictates that when
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OGCUWTGFKPRTQƂVCDKNKV[NQ[CNV[CPFCFXQECE[+PVJKUEQPPGEVGFGEQU[UVGO
where people are becoming nodes in popular social networks, relationship
economics offer competitive advantages.
LinkedIn partnered with Altimeter Group to study some of the world’s most
socially engaged companies, including Salesforce.com, Citrix Systems,
Bloomberg, MasterCard, Visa, and The Wall Street Journal, among others.
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their ability to use social media to improve engagement and relationships
with customers and employees.
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companies realized based on how they used the LinkedIn platform in the
following areas:
CONTENT MARKETING
EMPLOYEE ENGAGEMENT
TALENT AND RECRUITMENT
SALES
As our research with LinkedIn shows, the more you invest in terms of purpose,
time, openness, value, listening, and engagement in social media, the more
likely the relationships will thrive. Our research also suggests that, by investing
in relationships through social media, workforce and business performance
become more optimistic and productive.
About This Research
This custom research report
is sponsored by LinkedIn.
While the research in this
report may have been
informed by LinkedIn, all
findings and analysis are
independent and represent
Altimeter’s ongoing body
of research.
2
3. Executive Summary (continued)
We learned that successful companies see social media as both channels and
prevailing communication and engagement philosophies to attract the world’s
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engage buyers in more meaningful ways.
#FFKVKQPCNVQRNGXGNTGUGCTEJƂPFKPIUKPENWFG
EMPLOYEES AT SOCIALLY ENGAGED COMPANIES:
• Believe that LinkedIn has had a positive impact on
their company
• Are more inspired and optimistic about their company
• Are more informed and likely to become ambassadors who not
only read updates but also share them with colleagues inside
and outside the organization
• Are collaborative and connected with team members on
and outside their teams
• Feel they are having an impact on their organization
EXECUTIVES AT SOCIALLY ENGAGED COMPANIES:
• Are more likely to use professional social media to build
relationships and actively create and share content
• Are vocal proponents in employee use of professional
social media
3
5. THE TOP 25
SOCIALLY ENGAGED COMPANIES
To demonstrate social engagement and
transformation, LinkedIn released its list of the
top 25 socially engaged companies in July 2014
(see Figure 1). This list showcases companies that
effectively use social media to improve engagement
and relationships with customers and employees. In
partnership with LinkedIn, Altimeter Group set out
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businesses use this platform in the following areas:
• CONTENT MARKETING
• EMPLOYEE ENGAGEMENT
• TALENT AND RECRUITMENT
• SALES
Figure 1 LinkedIn Introduces the Top 25 Socially Engaged Companies
LinkedIn Introduces
the Top 25
Socially Engaged
Companies
Based on billions of
signals and insights we have
identified the 25 companies
who are the most engaged
on LinkedIn to leverage
relationships with employees
and customers.
Source: Altimeter Group and LinkedIn
5
Relationship economics
dictates that when
businesses value people,
experiences, and aspirations,
they reap benefits measured
in profitability, loyalty,
and advocacy.
6. EMPLOYEE ENGAGEMENT
IS AT AN ALL-TIME LOW
In an era of social media, investing relationship
economics can represent the difference between
engaged and disengaged employees.
In late 2013, Gallup released the most recent version
of its survey that measures international employee
satisfaction. It finds that only 13% of workers feel
engaged by their jobs. The vast majority, 63%, is not
engaged. Moreover, 24% are actively disengaged
(see Figure 2). In a social economy, where employees
can easily share experiences with professional and
personal networks, influence on morale transcends
corporate borders. Unhappy employees eventually
contribute to a lull in attracting new, desirable talent.
LinkedIn and Altimeter Group surveyed two groups
online about their participation on the platform:
a target group (N=1,460) and a control group
(N=1,378). The target group’s respondents were
from the top 100 most socially engaged companies,
according to LinkedIn’s proprietary scoring in four key
areas (hiring, marketing, sales, and collaboration on
LinkedIn). Of the top 100 companies surveyed, 81 are
from North America and nearly half are in the software
industry. The control group’s respondents were from
the general user base of employees whose companies
are on LinkedIn. Only companies with more than
1,000 employees were surveyed.
In both quantitative and qualitative reviews of social
media strategies among the top 100, findings
demonstrate that communication and engagement
improve relationships with customers, employees, and
prospects. Relationships carry many virtues that help
companies thrive and compete. As social strategies
mature, companies transform from the inside out to
become more open and forthcoming, adapting to
technology and evolving new customer and employee
behaviors.
Figure 2 Employee Engagement is at an All-Time Low
Employee Engagement is at an All-Time Low
According to a recent Gallup survey:
13%
of employees
are engaged
63%
are not
engaged
STATE OF THE GLOBAL WORKPLACE 2013 GALLUP
6
7. RELATIONSHIP ECONOMICS
DRIVES SOCIAL BUSINESS
TRANSFORMATION
As society becomes increasingly connected,
companies must become digitally savvy to compete
for customers and top talent. They must also become
truly social by investing in more than technology
alone; they must invest in fostering valuable,
meaningful internal and external relationships.
In a social economy, businesses that aim beyond
transactional engagement to focus on community are
rising above the fray, earning and retaining talent,
improving morale, and increasing sales.
Paul Jaminet is a scientist whose career has evolved
to focus more deeply on strategy consulting and
relationship economics. Jaminet believes that
relationships are an essential prerequisite for the
communications that reveal opportunities and the
transactions that exploit them.1 He was inspired by the
work of British economist Ronald Coase and Austrian
economist and philosopher Friedrich August Hayek.
Jaminet’s work studies the costs of forming and
maintaining personal relationships and what benefits
those relationships
create.2 He found
decisions about
relationships are
often more important
than decisions about
transactions. “It is the
consumer’s relational
decision that is critical
“It’s the consumer’s
relational decision that
is critical to his business
success, not the later
transactional decisions.”
to his business success, not the later transactional
decisions,” he states on his website (Jaminet’s italics).3
LinkedIn’s top 25 socially engaged businesses
share many important attributes. One is the goal
of improving communication and collaboration
between people at every level. This approach
involves intentional strategies and transactions that
drive relationship economics, causing customers
and employees to gain preference and affinity
toward businesses that actively invest in nurturing
relationships with them. If social media is about
the democratization of people and information,
Sir Francis Bacon’s bold assessment in 1597 that
“knowledge itself is power” has never been truer.4
Information leads to confidence. Engagement leads
to collaboration. Collaboration leads to improved
morale and innovation. Each contributes to a more
productive and transparent culture that aligns with the
tenets of social media.
Relationship economics is not only
a viable way to explore the ROI of
engagement and community building,
it is also becoming a competitive
advantage.
Enter social media. Organizations now have access
to platforms that open doors between customers
and employees to foster meaningful dialogue. By
communicating updates, useful information, and
opportunities — and by participating in conversations
— businesses are moving from broadcasting
information to actively hosting or participating in
important communities.
Microsoft, one of the top 100 socially engaged
companies, understands the importance of linking
digital goals to strategic community engagement
on LinkedIn. The company created a LinkedIn group
to better engage its developer audience across
Australia, to reach developers outside the Microsoft
network, and to create influence via its content. By
hosting and engaging with its own community of like-minded
software developers, the software company
generated a 33% click-through rate from content
shared within the LinkedIn community to its external
web properties.
Another of the top 100 socially engaged companies
is Salesforce.com (SFDC). Dave Thomas, SFDC’s
senior director of content and engagement, believes
that employees have quickly come to expect their
companies to focus on building relationships through
social media:
By being more active over the last few years on
LinkedIn and other social channels, we’ve found
that employees come to expect that, in a good way.
7
-Paul Jaminet, Scientist
8. They’re happy when they see our content, they share
it, and they’re proud to see us responding in social.
Over a short period of time, employee expectations
of how social we were going to be as a company
rose quickly because they now saw the value of it
and appreciated us speaking with a more human
voice. It emphasizes trust as well, a high corporate
value that goes hand-in-hand with engagement and
transparency in social.
To what extent do relationship economics matter?
The return on investment (ROI) is in the numbers.
According to survey results, the differences between
employees from socially engaged companies and
those from the control group are compelling.
Employees at socially engaged
companies are more likely to
believe that LinkedIn has had
a positive impact on
their company.
In a social economy, relationships matter.
Social media helps create emotional connections with
consumers and employees. Relationship economics
not only contribute to emotional benefits but also
are the transactional foundation for word-of-mouth
marketing, which fuels business referrals and
recruitment for top talent.
Socially engaged companies are more likely to drive
greater lead generation, cultivate innovation, and
yield top talent (see Figure 3).
They are:
more likely to believe LinkedIn helps them
attract great talent (41% of the target group
vs. 26% of the control group)
more likely to believe LinkedIn makes them
more innovative (26% vs. 21%)
more likely to believe their company is more
competitive (21% vs. 15%).
more likely to align social media
engagement to more sales leads (11% vs. 7%)
Figure 3 Social Media Engagement Stimulates Competition
57%
24%
40%
57%
Source: Altimeter Group and LinkedIn
8
9. Figure 4 Employees at socially engaged companies Feel Empowered and Inspired
Employees at socially engaged
companies are more likely to be
inspired and optimistic about
their company.
The most socially engaged businesses are learning
that intentional social content and community
strategies inform and empower internal and external
stakeholders and build productive communities
where like-minded professionals connect to solve
problems and create opportunities. Socially engaged
companies are leading the way for a new social era
of business transformation, where trust becomes
a metric and relationships offer economic value.
Employees at socially engaged companies are
(see Figure 4):
more likely to believe LinkedIn focuses the
culture on relationships and engagement (33%
of the target group vs. 28% of the control group)
more likely to feel inspired at their job
(36% vs. 30%)
more likely to be optimistic about the future
of their organization (52% vs. 41%)
more likely to attribute social media
engagement strategies to employee
retention (12% vs. 10%)
Citrix’s director of social marketing, Justin Levy,
shared how extending information beyond
traditional owned channels to social channels
engages people where attention is often focused:
Source: Altimeter Group and LinkedIn
18%
20%
27%
20%
9
10. Figure 5 Executives Lead the Way and Set the Standard for Engagement
37%
“Even though we have
an intranet at Citrix, a
lot of employees find
company information
through our social
channels first. They’re
tied into their LinkedIn
networks and see
content pop up in
Source: Altimeter Group and LinkedIn
their news feeds. Being such a large company, it’s their
window into our never-ending stream of content.”
Executives at socially engaged
companies lead by example and are
more likely to use professional social
media to engage and lead digitally.
In a relationship economy, leaders have to walk the
walk in order for others to follow. The vast majority of
C-suite executives surveyed (85%) use LinkedIn to build
relationships outside their company that help them with
their career goals. Additionally, 60% of chief experience
officers (CXOs) use LinkedIn for the same purpose
within their company, leading to employee pride in the
leadership team.
Compared to those at companies that are not socially
active, executives at socially engaged companies are
(see Figure 5):
more likely to be actively building
relationships on professional social media
(41%of the target group vs. 30% of the
control group)
more likely to create and share content
(35% vs. 23%)
more likely to be vocal proponents of the
use of social media (24% vs. 16%)
“Being such a large
company, it’s their
window into our
never-ending stream
of content”
-Justin Levy, Citrix
52%
50%
10
11. As we learned with LinkedIn’s top 25 socially engaged
companies, when you empower people with
information, trust, and relevant content, engagement
and sharing become powerful economic engines. A
key tenet in social business transformation is indeed
empowerment. When people become ambassadors,
they build positive attributes for the company
and themselves.
Getty Images is another company in LinkedIn’s
top 100 most socially engaged. VP of brand Susan
Song believes LinkedIn is an important staple of the
company’s earned media strategy, contributing to
increased customer advocacy:
“Working organically
through content, we
can build a much
stronger community
on an earned media
basis rather than paid
social. The creation
of a community on
LinkedIn is important
for Getty Images,
because, from our
standpoint, these are customers who have worked
hard to help us by being brand advocates. It becomes
more of a word-of-mouth type brand engagement.”
Empowerment helps sales and marketing more
effectively engage customers, which translates into
improved relationships that offer business benefits.
Citrix’s Levy shared that the company’s sales team was
finding success on its own by purchasing LinkedIn’s
Sales Navigator product out-of-pocket in order to
further their careers. When Citrix learned of this
in late 2013, it escalated the issue to a corporate
level, creating a company-funded pilot of the tool to
determine its viability enterprise-wide.
Building social engagement relationships and
cultivating a mutually beneficial ROI takes a
dedicated, unified effort.
Clearly, social media is more than just running
marketing campaigns. Key business functions and
lines of business must work together to achieve goals.
Top companies are investing in dedicated social
strategies in key areas to develop engagement levels
inside and outside the business.
Among the top 25
socially engaged
companies, social
media strategies
are run specific
to business units:
HR, sales, and
social marketing.
But in the case
of LinkedIn
engagement,
teams are learning to work together to convey an
integrated story and complement disparate strategies
that unite audiences, deliver value, and channel
engagement.
SFDC’s Thomas approaches LinkedIn with people
and expectations in mind as part of a larger content
marketing strategy. “Rather than having a standalone
LinkedIn strategy, we’ve incorporated LinkedIn as
a channel in part of a larger content distribution
strategy,” he said. “LinkedIn gives us a relevant and
directed channel to the audience we want to reach.”
11
“Rather than having a
standalone LinkedIn
strategy, we’ve
encorporated LinkedIn
as a channel in part
of a larger content
distribution strategy”
“Working organically -Dave Thomas, SFDC
through content, we can
build a much stronger
community on an earned
media basis rather than
paid social.”
-Susan Song, Getty Images
12. SOCIALLY ENGAGED
COMPANIES INVEST IN
RELATIONSHIP ECONOMICS
TO IMPROVE BOTTOM-LINE
RESULTS
Relationships have always mattered, but now they
matter more than ever. With focus, commitment, and
genuine intentions, social media becomes much more
than just another marketing channel. Simply said, our
research makes the case for investing in relationship
economics. Strong but sincere, value-added social
media engagement contributes to the bottom line.
More importantly, the act of investing in relationship
economics yields significant human benefits as well.
When companies invest in relationships with
customers, employees, prospects, and partners,
they reap benefits measured in competitiveness,
profitability, loyalty, and advocacy. Beyond the
bottom line, organizations also evolve into truly social
businesses, where technology becomes an enabler
of something with a greater purpose, driven by the
resolve to improve communication, connections, and
collaboration between people.
Building relationships takes intent, and intent begins
with empathy. Technology improves how companies
communicate internally and externally, but it is the
desire to build relationships and the capacity invest
in them through content, engagement, and support
over time that counts. LinkedIn’s top 25 socially
engaged companies share the genuine intent to
improve how companies communicate with customers
and employees. Moreover, they open communication
paths between what was once the audience and is
now an active and participatory community.
This is where social business transformation truly begins.
12
This is where
social business
transformation
truly begins.
13. HOW TO BECOME
A SOCIALLY ENGAGED COMPANY
LinkedIn and Altimeter Group documented best practices among the top 100 socially engaged businesses.
Additionally, Altimeter Group has studied the successful traits of other leading social businesses and assembled
a list of essential elements to integrate into your approach:
Figure 6 10 Steps to Becoming a Socially Engaged Company
13
8. Balance
Owned and
5. Create
Engaging,
Shareable
Content
1. Audit
2. Broaden
Your Definition
of Social
3. Think
Holistically
4. Test
and Learn
Paid
7. Don’t Just
Sell and Market
6. Keep a
Rhythm
9. Think
Globally, but
Act Locally
10. Scale
Across Key
Functions
Source: Altimeter Group 2014
14. 1
1. AUDIT. Conduct an internal audit to determine
2
14
how employees are currently using LinkedIn
and other social networks. This informs what
your company should invest in on their behalf to
increase job performance.
1. BROADEN YOUR DEFINITION OF SOCIAL.
Consider a more integrated approach to your
social media strategy:
• Technology: Discover which platforms your
desired audiences are already using and align
with them.
• Listening/learning: Observe questions and
discussions. Learn what’s important to your
communities. Pay attention to what
competitors and best-in-class companies are
doing and not doing. Apply those insights to
your strategy before launching anything.
• Community: Invest in building a community
with and around your brand. Use LinkedIn
Company Pages, but also go where
engagement is already taking place. Become
part of the community. Shape the direction of
the community.
1. THINK HOLISTICALLY. Social media is made up
of channels for specific purposes but that roll up
to a more significant business charter. Everything
must run under a common and compelling vision.
• Sales: Empower sales professionals to engage
with the tools that inform and allow them to
build relationships at scale.
• Employee engagement: Communicate with
employees, empower and engage them, and
arm them with the information and content
that appeals to not only them but also
their networks.
• Recruiting: Invest in making the company
more human. Prospects are looking for more
than just jobs; they’re looking for personality,
culture, and empowerment.
• Content marketing: Include LinkedIn as part of
a cross-channel content marketing strategy,
but also use other social networks, such
as Facebook, Twitter, and YouTube, where
customers and prospects are already engaging.
• Internal organization and collaboration: Ensure
all LinkedIn relationship owners communicate
regularly about platform strategies.
2. TEST AND LEARN. Run pilot tests to determine
benefits and viability. Communicate findings to the
broader team.
3. CREATE ENGAGING, SHAREABLE CONTENT.
Keep the audience in mind, every time. Generate
content that’s informative, entertaining, useful, and
shareable. Shareable content requires a different
approach, so study sharing patterns to inspire
content creation. Experiment with a variety of
content types to determine what your audience
consumes, engages with, and shares most often.
4. KEEP A RHYTHM. Stay present, but don’t
saturate. Find a solid rhythm.
5. DON’T JUST SELL AND MARKET. Make sure
to stagger your content so that you give more than
you ask.
6. BALANCE OWNED AND PAID. Consider using
LinkedIn’s Sponsored Updates for lead generation
and recruitment. Sometimes a more effective form
of extending reach and building communities
requires reaching beyond your existing audience.
7. THINK GLOBALLY BUT ACT LOCALLY. Most
social platforms are global with a local reach. Geo-specific
content gets employees’ and customers’
attention because they can “see themselves” in
the content.
8. SCALE ACROSS KEY FUNCTIONS. Socially
engaged companies don’t limit engagement to
any one department. Those who find success scale
it across the organization to improve employee
engagement, recruiting, sales, and marketing.
4
5
6
7
8
9
10
3
15. ENDNOTES
1 Paul Jaminet’s Writings on Relationship Economics.
Accessed on September 16, 2014.
http://relationshipeconomics.com
2 “Introduction to Relationship Economics.” Paul
Jaminet’s Writings on Relationship Economics.
Accessed on September 16, 2014.
http://www.relationshipeconomics.com/introduction.htm
3 “Introduction to Relationship Economics.”
4 Bacon, Francis. “Essay XXVI: Of Heresies,”
Meditationes Sacrae (1597).
METHODOLOGY
LinkedIn and Altimeter Group surveyed two groups
online about their participation on the platform:
a target group (N=1,460) and a control group
(N=1,378). The target group’s respondents were
from the top 100 most socially engaged companies,
according to LinkedIn’s proprietary scoring in four
key areas (hiring, marketing, sales, and collaboration
on LinkedIn). Of the top 100 companies surveyed,
81 are from North America and nearly half are in the
software industry. The control group’s respondents
were from the general user base of employees
whose companies are on LinkedIn. Only companies
with more than 1,000 employees were surveyed.
BRANDS
Justin Levy, Global Social Media, Citrix
Lewis D’Vorkin, Chief Product Officer, Forbes
Susan Song, VP Brand, Getty Images
Shanee Ben-Zur, Manager #dreamjob Marketing
and Social Media, Salesforce.com
Anna Eschenburg, Manager Engagement
Marketing, Salesforce.com
Jennifer Johnston, Senior Director #dreamjob
Marketing and Communications, Salesforce.com
Dave Thomas, Senior Director Content
Community, Salesforce.com
ACKNOWLEDGEMENTS
With thanks to support from: Erin Brenner, Maeve
Delahunt, Heather Meeker-Haas, Vladimir Mirkovic,
Carol Quinn, Briana Schweizer, Christine Tran, Alec
Wagner, and Carole Zibi.
PERMISSIONS
The Creative Commons License is Attribution-
Noncommercial-Share Alike 4.0 United States at
http://creativecommons.org/licenses/by-nc-sa/4.0.
DISCLAIMER
ALTHOUGH THE INFORMATION AND DATA USED IN THIS
REPORT HAVE BEEN PRODUCED AND PROCESSED FROM
SOURCES BELIEVED TO BE RELIABLE, NO WARRANTY
EXPRESSED OR IMPLIED IS MADE REGARDING THE
COMPLETENESS, ACCURACY, ADEQUACY, OR USE OF THE
INFORMATION. THE AUTHORS AND CONTRIBUTORS OF
THE INFORMATION AND DATA SHALL HAVE NO LIABILITY
FOR ERRORS OR OMISSIONS CONTAINED HEREIN OR
FOR INTERPRETATIONS THEREOF. REFERENCE HEREIN TO
ANY SPECIFIC PRODUCT OR VENDOR BY TRADE NAME,
TRADEMARK, OR OTHERWISE DOES NOT CONSTITUTE
OR IMPLY ITS ENDORSEMENT, RECOMMENDATION, OR
FAVORING BY THE AUTHORS OR CONTRIBUTORS AND
SHALL NOT BE USED FOR ADVERTISING OR PRODUCT
ENDORSEMENT PURPOSES. THE OPINIONS EXPRESSED
HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE.
15
16. AUTHORS
Brian Solis, Principal Analyst
Brian Solis (@briansolis) is an award-winning author, prominent blogger, and keynote speaker. Solis
works with enterprise organizations and technology vendors to research the state and direction
of markets, competitors, and customer behavior. Through the use of proven frameworks and best
practices, Solis analyzes trends, opportunities, capabilities, and areas for improvement to align new
media initiatives with business priorities.
Jaimy Szymanski, Senior Researcher
Jaimy Szymanski (@jaimy_marie) has assisted in the creation of multiple open research reports
covering how disruptive technologies impact business. Szymanski has also worked with Altimeter
analysts on varied research and advisory projects for Fortune 500 companies in the telecomm,
VTCXGNRJCTOCEGWVKECNƂPCPEKCNCPFVGEJPQNQI[KPFWUVTKGU*GTTGUGCTEJKPVGTGUVUNKGKPUQEKCN68
ICOKƂECVKQPFKIKVCNKPƃWGPEGCPFEQPUWOGTOQDKNG
Rebecca Lieb, Industry Analyst
Rebecca Lieb (@lieblink) covers content strategy, and digital advertising and media, encompassing
brands, publishers, agencies and technology vendors. In addition to her background as a
marketing executive, she was VP and editor-in-chief of the ClickZ Network for over seven years.
For a portion of that time, she also ran Search Engine Watch. She’s written two books on digital
marketing: The Truth About Search Engine Optimization (2009) and Content Marketing (2011).
About Altimeter Group
#NVKOGVGTKUCTGUGCTEJCPFEQPUWNVKPIƂTOVJCV
helps companies understand and act on technology
disruption. We give business leaders the insight and
EQPƂFGPEGVQJGNRVJGKTEQORCPKGUVJTKXGKPVJGHCEGQH
disruption. In addition to publishing research, Altimeter
Group analysts speak and provide strategy consulting
on trends in leadership, digital transformation, social
business, data disruption and content marketing strategy.
Altimeter Group
1875 S Grant St #680
San Mateo, CA 94402
info@altimetergroup.com
www.altimetergroup.com
@altimetergroup
650.212.2272
16
About LinkedIn
Founded in 2003, LinkedIn connects the world’s
professionals to make them more productive and
successful. With over 300 million members worlwide,
including executives from every Fortune 500 company,
Linkedin is the world’s largest professional network on
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model with revenue coming from Talent Solutions,
Marketing Solutions and Premium Subscription products.
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across the globe.