LinkedIn Ads may not necessarily be as popular or well-known as other platforms, they have a great track record.
Although most social media platforms offer the option to run ad campaigns, marketers report that they prefer advertising on LinkedIn over other platforms by 78%. One of the biggest questions people have, of course, is how much LinkedIn ads cost, and whether or not advertising with LinkedIn costs are worth it.
In this post, we want to clear up any misconceptions and share valuable information so you can plan accordingly.
While advertising costs are highly variably depending on a number of different factors, in this post we’re going to share what advertising with LinkedIn costs on average and what influences cost. We’ll also share some tips to help keep those costs down to maximize your ROI.
Why You Should Consider LinkedIn Ads
LinkedIn currently has 121 million active daily users, with 3 million who share content on a monthly basis. Of the number of users who are actively sharing content, you’ll likely need the extended reach LinkedIn advertising can offer you. The good news is, you have high odds of being seen on LinkedIn if you boost your reach through ad.
Through LinkedIn advertising, you can:
- Promote existing posts through Sponsored Content
- Reach out directly to prospects via InMail through Sponsored Messaging
- Run Text Ads that appear right on the main feed
- Create personalised Dynamic Ads tailored to specific users
When you advertise on LinkedIn, you’ve automatically got a massive pool of skilled professionals to reach. It’s possible to target your ad audience based on their skill level, academic degree, job title, interests, degree, and even employees from a specific company. The opportunities for customization and tailored targeting mean your niche ads have a chance to truly shine.
If that sounds good to you, then it’s time to break down advertising with LinkedIn costs, what factors influence ad spend, and how to adjust your ad costs to get the biggest bang for your buck. Let’s jump right in.
What Factors Influence Costs on LinkedIn
There are a number of important factors that influence advertising costs on LinkedIn. Ads on LinkedIn are sold through an online auction, where buyers competitively bid on ad space. Essentially, you’re in competition with other advertisers who are looking to reach the same people as you are.
Auctions run each time a user visits the LinkedIn website. The winner of that auction will have their text ad or campaign appear for the user during their time on the site. Winning ad auctions on LinkedIn is dependent upon your bid amount and how much competition there is for your target audience.
If you’re looking to reach a highly competitive, premium audience, then your ads may cost more on LinkedIn. The size and location of the audience you target for your ads also influences the overall cost (i.e., how broad that audience is). Final campaign costs are based on a combination of audience size and the cost of a winning bid for that audience.
Additionally, the bid and budget you set for your campaign will influence its overall cost. In order to run an ad on LinkedIn, you must set your daily ad spend budget to a minimum of $10 USD per day ($13.61 AUD). After you’ve set your budget, including start and end dates, you can then optimise your bid and set a bidding strategy.
In addition to audience, bid, and bidding strategy, your objective influences overall cost. The bidding strategies and optimization goals available to you will fluctuate depending on your campaign’s objective. Objectives include raising brand awareness, driving website traffic, engagement, video views, lead generation, talent leads, website conversions, and job applicants.
The relevance of your ads also influences overall bid. LinkedIn’s auction system favors ads that are both engaging and relevant, which are reflected in their quality scores.
Advertising with LinkedIn: How Much Does It Cost?
Advertising on LinkedIn tends to cost more than other social media platforms. However, you’re targeting different audiences for different purposes. You might be offering a product or service. But, you might also be recruiting to fill key positions in your company, including management and C-Suite roles. That means you’re truly paying for quality when you run an ad on LinkedIn.
As previously mentioned, LinkedIn currently requires a $10 USD per day ($13.61 AUD) minimum budget for most ads. For Sponsored Content--or, posts you’ve previously published to your company page, for example--you can set a $10 USD total campaign budget ($13.61 AUD). It’s also possible to bid $2 USD ($2.72 AUD) for CPM or CPC on your Text Ads.
Cost per 1000 impressions on LinkedIn averages $6.05 USD, or $8.24 AUD. However, the actual cost per click (CPC) is high, at this time ranging from $2 to $7 USD ($2.72 to $9.53 AUD). LinkedIn’s average CPC is $5.26 USD ($7.16 AUD).
In comparison to Facebook, Instagram, and Twitter, LinkedIn’s CPC is exceptionally high. Here’s what CPC averages on the other platforms:
- Facebook’s CPC averages $0.97 USD ($1.32 AUD)
- Twitter’s CPC averages $0.38 USD ($0.52 AUD)
- Instagram’s CPC averages $3.56 USD ($4.85 AUD)
Advertising with LinkedIn costs are significantly higher than other platforms’ rates. So the next natural question to ask is whether it’s worth it to spend that kind of money to run LinkedIn ads.
Is Advertising with LinkedIn’s Costs Worth It?
It would be easy to assume that, because of LinkedIn’s higher advertising cost, marketers would shy away from using the platform to run paid ads. However, it’s interesting to note that ad managers advertising on LinkedIn report that roughly 65% of their campaigns produce a favorable ROI.
Beyond that, four out of five LinkedIn users are primary drivers of business decisions in their own organizations. Users on LinkedIn have twice the buying power of audiences on other platforms. And, marketers have rated LinkedIn as the top source of B2B lead generation.
Quality is worth paying for, and higher-quality leads will likely come from LinkedIn. You’re advertising to a demographic of professional users and companies that are using the platform to look for jobs, gain an edge in their fields, and connect with other like-minded industry professionals.
Marketers have reported an average lead-to-conversion rate of 2.74% on LinkedIn. Combine those rates with the high value of LinkedIn conversions, and you’ve got a powerful platform you can’t help but leverage. Let’s take a look at some prominent brands and how they leveraged LinkedIn advertising to grow their brands and drive engagement.
In 2020, Adobe was forced to reimagine its annual, in-person Adobe Summit in Las Vegas, Nevada, due to the COVID-19 pandemic. Rather than canceling the event, Adobe decided to make it entirely digital, and engaged LinkedIn advertising to attract attendees. In addition to ads, Adobe ran a livestream on LinkedIn to raise awareness. Originally, Adobe had prepared for 23,000 people to attend their in-person event. With the help of LinkedIn ads, the online summit has now had more than 700,000 views, with 28,400 views of their livestream within the first 24 hours of posting it. They tripled their initial registration goal, as well. Read the full report here.
As a global industry leader in the networking and IT spaces, Cisco Canada leveraged LinkedIn ads to reduce their lead gen costs. Ultimately, they were looking to make more connections and improve their ROI. Through LinkedIn advertising, Cisco decided to promote a white paper that specifically highlighted Cisco’s impact on the manufacturing sector. Cisco was able to narrow their target audience, and they also included a Matched Audience to further target the right people. Overall, this campaign lowered cost per acquisition by 56%. Read the full report here. You can check out more of LinkedIn’s advertising case studies here.
How to Lower Your Costs on LinkedIn Ads
It’s possible to lower your costs on LinkedIn ads, since they’re historically a bit more expensive than other platforms. Let’s look at a few major ways this may be possible.
Split Test Your Campaigns
Split testing your campaigns can give you an excellent idea of which ads are performing best, including at the lowest cost and potentially with the highest ROI. With LinkedIn advertising, it’s possible to run multiple ads at the same time, then test those ads against one another to see which is performing best.
Within your LinkedIn Campaign Manager, you can run tests on your ads to check their performance. Then, replicate the campaigns that were the most successful, with the lowest cost and best ROI.
You can also compare and contrast the performance of your current campaigns on your Campaign Manager dashboard. The dashboard summary shows the status of each ad, ad spend, your key results, cost per result, impressions, clicks, average CTR, and bid. It’s an at-a-glance way to check up on how your ads are doing, whether they’re currently running or have already ended.
Understanding your LinkedIn ads’ performance and cost will help you determine what strategies work best for you. In future campaigns, you can create similar, equally relevant ads to test how well they perform in comparison to past campaigns.
Ad relevance, or your campaign quality score, is another way you can lower the overall cost of your advertising campaigns on LinkedIn. LinkedIn scores your ads based on how engaging and relevant they are. When the platform decides an ad is highly relevant, then its overall cost goes down. Essentially, the more relevant LinkedIn thinks your ads are, the less they will cost.
Adjust Your Bidding Strategies & Bid Caps
When you set up your ad campaign in the LinkedIn Campaign Manager, you can adjust your budget, bidding strategies, and bid caps. After you’ve set your campaign’s objective, audience, ad format, and placement, you can select your budget and bidding strategies.
When setting a bidding strategy, you can opt for:
- Automated maximum delivery, which allows LinkedIn to set and adjust your bid automatically. It leverages your full budget while keeping your campaign as competitive as possible.
- Target cost, which allows LinkedIn to adjust your bid automatically while also working near your budget (they won’t raise your bid above 30% of your target cost). You can set your own target cost per desired result.
- Manual bidding, which allows you to control your own bid amounts (CPA will be fluid). This strategy gives the user more control than the automated options.
Keep in mind that if you manually bid or lower your target cost, that could impact your ability to win ad auctions and actually get your ads seen. In particular, if your target audience is one that many advertisers are competing for, you may have a hard time getting your lower-cost ad bids in front of them.
Create Hyper Targeted Campaigns
Consider creating hyper targeted advertising campaigns for your LinkedIn page. Targeted campaigns can mean that any clicks on your ads are more likely to convert, which means higher ROI long-term. Additionally, you will have reduced unnecessary costs by narrowing your audience to a targeted few.
Rather than attempting to compete with broader audiences your ads may not appeal to, focus on the individuals who will directly benefit from what you have to offer. Trim and narrow your ad audience relentlessly. Write your ads to appeal to niche targeting segments so they’re more relevant. You can use retargeting for one campaign or one one segment of decision-makers based on use case, for example.
Here’s a potential scenario. Let’s say an invoicing software company is looking to run targeted ads on LinkedIn to both retarget past leads and build new brand awareness. They might run:
- One ad for freelancers that promotes low-cost, flexible options for using their software
- One ad for small businesses promising prompt payments and expense tracking to make it easier to work with an accountant
- One ad that promotes an exclusive package for high-value clients, which includes unlimited clients and invoices, lower invoice fees, and tailored incentives for enterprise and high-volume businesses
With a little creativity and specificity, it’s possible to narrow your ads’ targeted audiences and achieve excellent reach.
Advertising with LinkedIn costs tend to be more expensive than ads on other platforms.
However, marketers’ ability to narrow their target audiences and pursue high-quality leads makes the expense worth it for many businesses. As with any paid advertising effort, the key is to be agile, specific, and tuned in to your ads’ performance so you can make adjustments that ultimately benefit your business in the long run.
If you want to learn how to achieve the lowest CPC campaigns, while still generating incredible results. Have a look at our LinkedIn Marketing Course here.