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How Does the LinkedIn Ads Auction Work? A Comprehensive Guide

Advertising auctions are the foundation of digital marketing, and those leveraging LinkedIn as a B2B ad platform are well-advised to understand how it applies to this specific channel.

Once you understand how powerful auctioning and a good LinkedIn bidding strategy are for your potential campaigns and marketing as a whole, you can bolster them to compete with and outdo fellow brand rivals.

But it’s not like bidding for something on eBay – there are other things to consider and ways to approach auction success. So, with this in mind, Our B2B Linkedin Ad Agency have put together a comprehensive and easy-to-follow guide on how to navigate the lucrative world of LinkedIn Ads auctioning.

1 – LinkedIn Ad Auctions: Understanding How It Works

To harness LinkedIn Ad Auctions, you need to first understand the 4 key components:

  • Targeting
  • Ad bidding, frequency caps, and budget pacing
  • Ad relevance
  • Ad ranking
User visiting LinkedInUser on feed prompts ad requestBid is placed in auctionScore is calculated via predictive modelsAd creatives ranked on bid x by the relevancy scoreWinning creative & successful campaign

1.1 – Targeting

The primary (and arguably most important part of your campaign-planning stage) is audience targeting, and when we browse our LinkedIn feeds, we will see ad content that is both organic and sponsored – all of which are deliberately targeted to us.

When it comes to targeting and auctioning, how it works is a marketer will launch an ad that targets specific a LinkedIn user, an ad request is then sent to LinkedIn’s auction, and a bid is placed for that specific user.

1.2 – Bidding, Frequence Caps, & Budget Pacing

LinkedIn auction bidding works by bidding against other marketers/bids on a similar target audience and within the same ad format. For example, if you are launching a Single Image Ad, your bids will compete with other Single Image Ad campaigns, and so on.

Because LinkedIn uses a second price auction model for the bidding process, marketers only need to pay 1 cent higher than the current or next highest bidder.

There are 3 bid types, which are standardized into an eCPI model to produce the same value. These are:

  • CPC = pCTR x bid = eCPI
  • CPM = CPM Bid x 1000 = eCPI
  • CPV = eCPV x Bid = eCPI

LinkedIn will make sure that, when a bid is won, the bidder hasn’t exceeded the frequency cap and budget before launching the ad. The frequency cap is in place to make sure that the target audience isn’t being bamboozled by your ad to the point of being annoying or spammy.

1.3 – Ad Relevance

When a bidder wins the bidding process, they will receive an ad slot that is based on the combined value of the relevancy score and the eCPI score.

If you’re wondering what the relevancy score is, it is this: a prediction made by LinkedIn’s AI data that decides if the user is likely to take action on the ad once it goes live. Here’s how the prediction is made:

  • Linkedin CPC/CPM campaigns use pCTR. pCTR refers to the predicted click-through rate of the member
  • LinkedIn lead gen campaigns use pLTR. pLTR refers to the predicted lead-through rate of the member
  • Linkedin Video campaigns use pVTR. pVTR is used to determine the relevancy of video campaigns, calculated as the number of views > 2 seconds/number of impressions.

1.4 – Ad Ranking

Once you win your bid, your ad will then be ranked by LinkedIn, based on the relevancy score. Bear in mind that having the highest bid doesn’t necessarily mean your bid will win.

On the contrary, you don’t need to spend chunks of money to guarantee success because the secret of success lies within the relevancy score – not the amount of cash you throw at it!

2 – LinkedIn Campaign Score & Ad Relevance

As we mentioned earlier, the secret ingredient to LinkedIn auction success is the ad relevance score, but there’s also another crucial element: the campaign quality score (CQS).

The quality of an ad is measured against its competitors’ relevance across all of the auctions it is involved in.

2.1 – How LinkedIn Calculates the Quality Score

LinkedIn will calculate the CQS based on the predicted click-through rate (pCTR) in comparison to the pCTR of your bidding rivals. 

Here’s a closer look at the calculation process:

  • It’s likely you’ll partake in multiple auctions, so the score will be calculated by dividing the pCTR of the highest-performing ad in each auction by the pCTR of your ads.
  • This will then prompt an average score, which is formulated by combining all auction scores that are targeting the same audience.
  • Each campaign is then awarded a CQS score based on the results of these calculations based on how it compares to the average score. The score will be between 1 – 10 (10 being the best possible outcome).

2.2 – Factors That Affect the CQS

Because scores are generated via LinkedIn’s AI, we can’t know for sure every single aspect of the score creation. However, we do know that there are some key factors, such as

  • Engagement. The more your campaign is met with likes and reactions, the more LinkedIn considers it to be high-potential.
  • CTR. This is the metric that outlines the amount of LinkedIn users that are clicking on your ad. Again, the higher the rate, the more it is considered relevant.
  • Shares. Users sharing your ad is a key indicator that your ad is relevant.
  • Comments. LinkedIn users won’t always take the time to comment on an ad – even if they’ve liked or shared it – so the number of comments will up the quality score.
  • Feedback. Finally, members will provide feedback as to whether or not your ad was relevant, which will impact the score depending on whether the feedback was generally positive or negative.

2.3 – Campaign Quality Score & Ad Auctions

When looking at the actual auction process, your CQSs will help you understand how it performs during bidding.

You will win your bid based on the campaign bidding strategy and the relevancy score, and the higher the score, the lower the bid should be in order to win.

2.4 How to Check Your Campaign Quality Score

During the auction process, you should be keeping an eye on your Campaign Quality Score, and you can do this by:

  • Going to LinkedIn’s Campaign Manager 
  • Selecting the account you wish to view (if you have more than one) 
  • Selecting the campaign of choice 
  • Clicking on your preferred timeframe (upper righthand corner)
  • Clicking on ‘Export’
  • Clicking on the ‘Report’ dropdown and selecting ‘Campaign Performance’
  • Selecting your time breakdown
  • Clicking ‘Export’ to transfer the data into a .csv file

3 – Improving the Quality of Your Ads

Naturally, the way to improve your campaign quality score is to improve the quality (and relevance) of your ads. Here’s how:

3.1 – Be Accurate & Precise With Your Targeting

Again, this harkens back to our point about ad success being centered around accurate audience targeting. And in respect to LinkedIn Ads Auctions, it also plays a fundamental role in achieving a high CQS.

LinkedIn makes it simple and easy to segment and target the right audiences based on your campaign objective, and various other factors, so make sure you are utilizing all of this in your Campaign Manager.

3.2 – Use High-Quality (& Branded) Imagery

Not only does this help your campaign look professional and well-put-together, but it also factors into your score.

The visual aspect of any marketing is extremely important, so consider the following:

  • Good-quality images. This means good lighting, high resolution, relevant to the ad subject, etc.
  • Brand your images with your company’s logo.
  • Include a clear, easy-to-find CTA (call-to-action) in every ad.
  • A/B testing. With all LinkedIn ad campaigns, make sure you create several slightly different versions of each ad and test them before launching them to see which ones generate the most engagement, and then optimize as necessary.


Now that you understand how the LinkedIn Ads Auction feature works – and how to generate the highest CQS – you can go about building your campaigns that will undoubtedly get you winning bids each and every time.

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