LinkedIn Ad Pricing: 6 Budget-Friendly Ways to Create High-Performing Campaigns
In addition to guest posting on the UpCity blog, Impactable is featured as one of the Top LinkedIn Marketing Agencies in the United States. Check out their profile!
LinkedIn is the largest social media platform for professionals. From SMBs and startups to enterprises and solopreneurs, the platform has become a go-to for individuals and brands looking to engage with a broader audience and increase their bottom line by positioning themselves as experts in their space.
LinkedIn advertising uses an ad online auction system where campaign managers who want to target a similar demographic place competitive bids to win placement. Since 2015, several new features, including account targeting, matched audiences, and conversion tracking have been introduced to help companies make the most of LinkedIn ad campaigns.
Of course, all good things come with a price tag. In this post, we discuss six main factors influencing the cost of LinkedIn ads so that you can budget your campaigns accordingly. Let’s get started and find out how much LinkedIn Ads cost for businesses like yours!
How Much Do LinkedIn Ads Cost?
1. LinkedIn Targeting Options
LinkedIn allows you to create a target audience of LinkedIn members based on professional and personal attributes (such as geographical location, industry, current company, education, work experience, seniority, etc.) to ensure that your ad reaches relevant decision-makers. When multiple marketers bid for the same audience type, the cost-per-click (CPC) prices go up.
For example, the CPC of popular, in-demand industries like Technology and Consumer Goods is much higher ($7.00 and $6.60, respectively) than Education ($4.70) and Government Services ($5.10). Similarly, if you were to go by seniority, the CPC of senior decision-makers, like, C-Suite executives, comes out to be more expensive ($7.20) than that of entry and mid-senior specialists ($3.20).
Targeting countries and regions that are home to many business HQs, and have a matured market, costs more. For example, CPC for the United States is $9.90, whereas the CPC of India is only $1.15. Furthermore, the CPC of North America is $9.64, and the CPC of APAC is $2.78.
In other words, your LinkedIn ads costs will significantly depend on your objectives, the audience you seek to engage, the types of ads you leverage, the bidding options you choose, and more. Be sure to consider all of these factors before making a final decision on your total budget.
2. LinkedIn Campaign Objective
A LinkedIn campaign objective should closely align with your business goals and answer a simple question—what do you want to get out of this particular series of ads? LinkedIn allows you to choose between the following:
- Awareness: when you want more people to know about your products.
- Consideration: when you want to increase engagement and encourage people to visit your website.
- Conversion: when you want to capture qualified leads and persuade people into completing revenue-generating actions.
Awareness costs the least, as it targets a broader, more generic audience; the end game is to reach as many people as possible, and hence, campaigns with brand awareness as the objective are charged by impressions using CPM (or cost per thousand impressions).
If you want to kick things up a notch and showcase your campaign to people who, based on their past behavior, are more likely to click on your ads, then Consideration is the best option. Here, you will be charged by clicks instead of (or in addition to) impressions — for reference, the CPC benchmark for LinkedIn ads is $5.58, while CPM is $33.80. You will pay more than Awareness but have a relevant audience to target.
Conversion narrows your audience further, allowing you to reach people who have previously undertaken similar actions (like signing up for a newsletter, filling out a lead generation form, or scheduling a product demo). As a result, you have to pay more for ads when the LinkedIn campaign objective is set to the conversion objective.
3. LinkedIn Ad Formats
Linkedin allows you to choose from several ad formats, including single-image ads, carousel ads, video ads, text ads, spotlight ads, message ads, event ads, and follower ads. While some are optimized for impressions, others are optimized for clicks or website conversions, which explains why they are priced differently.
For example, LinkedIn video ads have an expensive CPC as they require the audience to absorb the content before taking action. The CPM on LinkedIn video ads are not that expensive though, which can make them great for awareness in the cold layer.
LinkedIn single-image ads also cost more as they are displayed prominently in the audience feed and are likely to receive more engagement.
In comparison, LinkedIn spotlight and LinkedIn text ads have a much cheaper CPC, despite some of them using clicks as the focus.
Consider a campaign where you are trying to retarget website visitors and stay in front of them to build more brand trust and awareness. If you leverage LinkedIn text ads or LinkedIn spotlight ads and choose a “click” focus, you might end up with thousands of impressions but few if any clicks. In this case, you can rake in thousands of impressions at no charge because, technically, you are only paying for the clicks. Using clever strategies like this, you can maximize the results you receive out of your ad spend without having to increase your daily budget.
4. LinkedIn Bidding Strategies
When creating a LinkedIn advertising campaign, you can select bidding strategies that align closely with your objective and ad format. You can choose between maximum delivery, cost cap, and manual bidding.
- Maximum delivery uses machine learning to efficiently use your entire budget by automatically bidding for you and generating the most relevant results for your LinkedIn ad campaign. Depending on the objective, this “hands-off” bidding strategy can be optimized for impressions, clicks, reach, leads, or conversions. As a result, campaigns ran on maximum delivery charge by impressions (CPM). There’s no option to cost cap or set a bid.
- Cost cap lets you set a cost per key result, which LinkedIn recognizes as a benchmark when setting and adjusting bids for your campaign during the auction. Here, the maximum cost per key result is usually an average amount the system attempts to stay under by going after the lowest cost events in the auction first. Like maximum delivery, campaigns using cost caps also charge by impressions (CPM).
- Manual bidding lets you set the bid amount for a key result. Based on your LinkedIn campaign objective, ad format, and optimization goal, this strategy may charge by impressions, landing page clicks, engagement clicks, video views, and sends. While manual bidding gives you complete control over the bid amount, the results might not be as remarkable as the full delivery and cost cap.
When several advertisers are looking to target the same audience, the price goes up. Your bidding strategy is instrumental in guiding the algorithm towards intelligently spending your budget—for example, how to charge you for a specific action (visiting a landing page or signing up for a demo) performed by the user.
5. LinkedIn Audience Size
You need a minimum audience size of 300 to run an ad campaign, and LinkedIn considers 50,000 to be the ‘sweet spot’ for driving results in the cold layer. Remember, there’s no size fits all recommendation for audience size, and A/B testing is crucial; however, a minimum of 300,000 for sponsored content and messaging and between 60,000 and 400,000 for text ads is an excellent, budget-friendly starting point. You can increase and decrease your ideal audience size for LinkedIn ads using targeting options like location, seniority, work experience, etc.
If your audience size is 350,000, then LinkedIn will have more flexibility regarding who to show your ads to. The algorithm will shop around to find active users likely to engage with your ads for better CPCs. In the long run, you will end up paying less than if you were dealing with a much smaller audience size of 10,000.
LinkedIn also lets you create Matched Audiences or custom audience segments based on an uploaded list, third-party integration, or retargeting.
The Forecasted Results panel examines your campaign selections, for example, bidding, ad format, targeting options, and duration, and generates projected performance estimates. You can use this data to make well-informed adjustments to your budget and minimize your LinkedIn advertising costs.
6. LinkedIn Campaign Quality Score
A Campaign Quality Score estimates how likely a user is to click on your ad by comparing the relevancy of your ads to that of advertisers targeting the same audience.
When awarding the winning bids in an auction, the algorithm considers both bidding strategies and the Campaign Quality Score (CQS). First, a score is obtained by dividing the predicted click-through rate (pCTR) of the highest-performing ad in that auction by the pCTR of ads in your campaign. Then, an average score is calculated based on all the scores from the auction. Finally, the CQS is derived by comparing your campaign’s ad score with the average score.
You can significantly lower your LinkedIn marketing pricing by designing campaigns that appeal to your audience, thereby increasing your CQS.
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Using LinkedIn Campaign Manager To Your Advantage
Behind every LinkedIn ad is a unique set of goals that an individual or a brand is trying to achieve. For some, it’s creating awareness about their products or securing attendees for an upcoming technology conference; for others, it’s driving website traffic or getting demo requests through a lead generation form.
While there’s no one-size-fits-all for appropriately budgeting your ad campaigns, the right combination of targeting options and bidding strategies can be a game-changer. I recommend you leverage a LinkedIn Ads Agency to ensure you get the most out of the platform and use your budget wisely.
That said, it’s important to remember that pricing is just one piece of a much larger puzzle when it comes to running successful LinkedIn ad campaigns. Your ads, first and foremost, must resonate with the target audience and inspire meaningful action, as is true with all pay-per-click (PPC) marketing.