For B2B businesses – service businesses, software companies, SMBs – LinkedIn is a key advertising channel. It’s the simplest way to reach key decision-makers and high-ranking team members.
It’s not a platform we think about when we say “Social Media” – but it’s increasingly important for networking and lead generation. Advertisers know this, which is why LinkedIn ad spend grew 41% between ‘20 and ‘21.
With that in mind, let’s cover how much LinkedIn ads cost; how you can spend less and still get incredible ROAS on the platform; how LinkedIn compares to other platforms
How Much do LinkedIn Ads Cost?
LinkedIn offers its users several bidding models. The price of your ads will depend on which one you use.
For all pricing models, minimum lifetime budget is $100; minimum daily budget is $10.
1. Cost-Per-Click (CPC) Ad Pricing
Cost of CPC advertising on LinkedIn: $5-6 per click, depending on industry
With the cost-per-click model, you are billed each time users click on your ad.
The average CPC on LinkedIn is around $5-6 depending on industry.
CPC is best when you want to drive traffic to your website. For example, let’s say you have reliable lead-generation assets, like landing pages that are proven to convert. CPC is your best option.
CPC is also good for driving ad downloads, event sign-ups, and other specific actions.
2. Cost-Per-Impression (CPM) Ad Pricing
Cost of CPM advertising on LinkedIn: $7 per 1,000 impressions
Impressions count each time your ad appears on a LinkedIn user’s screen.
Impressions are more about visibility than engagement or conversions. They’re a lot cheaper than clicks; about $7 per 1,000 impressions, averaging about $7.
CPM ad bidding is great when you’re trying to build brand awareness. It can warm up prospects before you start showing them a CPC campaign, bringing down the cost of the latter.
CPM bidding is also smart if you have an ad set that converts incredibly well. If this is the case, the cost of a click can be way less than it would be with a CPC campaign.
3. Cost-Per-Send (CPS) Ad Pricing
Cost of CPM advertising on LinkedIn: $0.8 per message
Some LinkedIn ads go out directly to your target audience’s inbox. Each inbox ad like this costs you $0.80.
CPS is more costly than CPM because an in-mail ad campaign has a higher chance of being seen. Users are more likely to interact with ads that they find in their inbox rather than one that pops up on their feed.
What Changes LinkedIn Ad Costs
The prices above may seem expensive, especially if you’re using other social media platforms for marketing: Facebook, TikTok, etc.
Fortunately, bidding models aren’t the only thing that affects LinkedIn ad costs. There are 3 variables you can play with to reduce costs and increase ROAS. If you’re familiar with SEO and SEM marketing on Google, these will feel familiar to you.
1. Target Audience
You can expect to pay more for an in-demand target audience. Seniors and industry decision-makers will cost you more than mid-level and entry-level professionals.
Want to target decision-makers without overspending? Go narrow. Focus on very specific…
Make sure to use the “Exclude” feature, too. By excluding people who aren’t a fit for you, you can save a lot of money. For example – if you’re targeting cyber security C-levels, don’t waste money on targeting regular security staff.
Before launching a new ad, always preview your audience and use exclude filters to refine it!
Advertisers on LinkedIn have to compete for limited available space. When bidding, you’re competing against advertisers targeting the same audience as you. The higher demand for the audience, the higher the winning bid is bound to be.
There are three types of bids available on the LinkedIn campaign manager: maximum delivery bidding, target cost bidding, and manual bidding.
|Maximum Delivery||LinkedIn spends your whole budget on getting as many ad impressions, clicks, or sends as possible|
|Target Cost Bidding||You set a cost per ad that LinkedIn sticks to (within 30% of the target)|
|Manual Bidding||You set a maximum cost per ad that LinkedIn cannot exceed|
Maximum delivery and target cost bidding are automated; the system sets your bid. For maximum delivery, the system focuses on creating a bid that gives you the best results using your full budget.
With the target cost bidding, the system seeks to get the most results out of your campaign while maintaining your ad costs within your budget goal.
Manual bidding gives you total control over how much to spend on your bid.
3. Ad Relevance Score
Once you start an ad campaign on LinkedIn, the platform will track its performance. A well-performing ad with a high rate of engagement – lots of likes, comments, etc – increases your relevance score.
The higher the score, the lower your ad costs to run. Therefore, it’s important to make sure your ad is relevant to your target audience. A relevant, high-quality ad campaign means you pay less, and get higher ROI.
How to Set Up up Your LinkedIn Ad
To set up an ad on LinkedIn, you’ll need to have a LinkedIn Page. If you don’t have one, don’t fret. All you need to start your company’s LinkedIn page is a LinkedIn account and a verified email address.
Your LinkedIn Page gives you access to the Campaign Manager, LinkedIn’s advertising platform. Here’s how you set up a LinkedIn ad on the Campaign Manager:
Step 1 – Set Campaign Objectives
What do you want to achieve with your ad campaign? Popular options are…
- Brand awareness
- Attract job applicants
- Drive traffic to your website
- Generate leads
- Video views
It’s important to know what your end goal is, because you’ll be building your LinkedIn campaign around it.
Your objectives will determine your target audience, pricing model, and ad format, all of which have a direct influence on the campaign’s performance.
Step 2 – Choose Your Ad Type
LinkedIn supports various ad types, including sponsored content such as articles, images, and videos on the main feed; text ads displayed on banners; messaging ads sent directly to users’ inboxes.
Think about your objective while choosing your ad type. As already discussed, the type of ad you choose will have a huge impact on your budget.
Step 3 – Set Your Target Audience
Your target audience is the people you want to see your advertisement. Build your desired audience based on their job title, industry company name, field of study, personal interests, and more.
Narrowing down your audience as much as possible highly improves your ad engagement and ROI. For example, if you’re a financial adviser marketing your services, you can focus on the kinds of people you serve today.
Step 4 – Set Your Budget
Like Facebook, LinkedIn allows you to set your ad budget. This keeps you from spending more than you’d like on a particular campaign.
While setting your budget, you can also set your ad schedule. This controls when your campaign runs – and when it doesn’t.
Step 5 – Track Your Ads’ Performance
The LinkedIn Campaign Manager gives you analytics that display ad performance and results.
The 4 main KPIs you see are:
Reach – how many people have seen your ads?
Impressions – how many times have people seen your ads?
Clicks – how many people have clicked on your ads?
Conversions – how many people have taken action on your landing pages?
Note that reach and impressions aren’t the same. If someone sees your ad 5 times, that adds 5 impressions but just 1 to your reach count.
Step 6 – Improve Your Ads
After tracking your ads, you’ll gain insights into what’s working and what isn’t.
For instance, you’ll be able to see who engages with your ad more, which ad creative works best, and which campaign objectives drive real results for you.
With this information, you can improve your ads by playing with creative, targeting, and bidding.
Lowering Your LinkedIn Ad Cost
LinkedIn advertising can be costly. Here are a few ways to reduce costs and get more value out of your campaigns.
1. Split Test Your Campaigns
Run multiple ad campaigns on the platform. Compare their performance to see which ones bring better results. LinkedIn allows you to run and monitor multiple campaigns at once, so this is easy to do.
Once you’ve identified the better performer, replicate its settings in your other ads for maximum ROI. Rinse and repeat to constantly improve LinkedIn ad performance.
2. Adjust Your Bidding Strategy, Bids, and Budget
Try different bidding strategies to identify the one that works best for you. For example, if you have a CPC ad that performs extremely well, consider running it with CPM bidding.
Experiment with bid caps. If you’re not getting enough quality actions in response to your ads, increase them. If you’re getting more actions than you want or can handle, consider lowering bids or overall budget.
3. Improve Your Targeting and Creative
Targeting the right audience with quality ads increases your ad relevance score, lowering your ad spending.
If your ads feel too expensive, try changing the creative – or who you’re showing it to.
Using the demographic reports derived from ad monitoring on the campaign manager is one way to build a better target audience. Always avoid targeting a broad audience.
Advertising on LinkedIn is more expensive compared to other social media platforms. Leads on LinkedIn are potentially worth more than on other platforms. No other platform gives you this level of access to decision-makers, business owners, and senior professionals.
Want a free consultation on how you can get the most out of LinkedIn, alone or in combination with platforms like Google and Facebook?
Book a free consultation below and let’s start growing your business together!