When it comes to LinkedIn Ads costs, spend varies a lot depending on a series of factors: the location, the language, the company size, the kind of business, the industry… But one thing that can make or break your pay-per-click strategy is the way you set your campaign up.
In the digital marketing trade, it’s common to hear that LinkedIn ads are expensive considering the cost per click. However, as you most likely know, business is not always about price – it is also about value. How can you put a price on new, hot leads for your business? Are those leads easy to get from LinkedIn?
LinkedIn is a great place to find new B2B prospects. Not only is it a platform that aims at professionals, it is also a social network that is permeated by brand messages with no resistance from users. After all, we’re on LinkedIn to do business. The power of this platform cannot be neglected if you want to sell your B2B service. However, the time and money invested on LinkedIn need to be reasonably balanced with results.
Therefore, should you go for a LinkedIn Ads agency rather than go it alone? We recommend using an agency, because LinkedIn Ads require a knowledge of the platform that not all entrepreneurs have beforehand. In this article, we’ll go through how to set up a campaign on LinkedIn Ads, and what you should expect from it. So, without further ado, let’s dive in!
1 – How much does it cost to advertise on LinkedIn?
To give you a general idea of how much does do LinkedIn Ads cost, we’ll share with you the average CPC, CPM and CPS.
- The average CPC (cost-per-click) on LinkedIn is around $5.39. Depending on your budget, this might be a bit expensive, but remember these clicks come from users that can easily turn into qualified leads. But not all campaigns on LinkedIn are measured by CPC. Other campaigns use CPM (cost per impression, which means the cost of a thousand impressions), which might fit your business better if you are looking to make your brand known. These campaigns aim at larger target audiences and do not always lead to clicks. They are a great alternative to CPC for brand awareness before lead generation.
- The average CPM (cost-per-impression) in LinkedIn campaigns is $6.37. Even though it seems like you are paying more, you end up paying less than with CPC – remember you pay for users to see your content rather than clicks.
- Now, finally, CPS (cost-per-send) is another different metric. It applies to InMail messages that you can send to your target audience. This means that you pay to get directly in touch with users on their LinkedIn inbox. Cost per send means that for every message sent, you pay an average of $0.70. Even if the user never checks their inbox or just decides to ignore it. InMail is also great for bottom of the funnel campaigns – typically, users that have some knowledge of the industry and could be interested in what you have to offer.
2 – LinkedIn Ad Pricing Models
As you gathered from the previous section, not all ads are measured equally on LinkedIn. This means there are several ad pricing models you can use, which relate to the way to measure costs and performance.
So, as we mentioned previously, there are three LinkedIn Ad Pricing Models: CPC, CPM and CPS. In this section, we’ll further explain how each of them works and which apply for different types of LinkedIn Ads.
You can use cost per click in both Sponsored Content and Text Ads. You pay for each click, which means these campaigns are meant to drive traffic to a website or your landing page. This can mean videos, pictures, and, of course, Text Ads. You get to choose what you think will interest your target audience.
Cost per impression is also used in Sponsored Content and Text Ads. Videos tend to perform better when using CPM, as you can just pay for users to watch your videos without the need to engage. Text ads can also be used with a CPM pricing model, but we typically don’t recommend it since this kind of ad tends to target engagement and action on the part of the user.
For Sponsored InMail, LinkedIn charges a cost per send. You are paying to get to the inbox of potential clients or customers, and the price, although a bit steep, is reasonable to get to message your target audience directly.
The potential of this pricing model is great, but it can also easily go wrong if you miss the right audience or if there is something wrong with the messaging. The fact that these are direct messages can amplify any mistake, and as you know, the Internet never forgets.
3 – Controlling ad spend
When it comes to controlling ad spend, you can use different options on LinkedIn. We recommend using manual bidding options. LinkedIn’s automated bidding is easier, but there are other options such as manual, target cost, and max delivery.
- Manual bidding
It allows you to set a price for each click, each thousand impressions, and each send. This is the best option to choose as it provides an ideal control over how much you are spending on your campaign. Bid prices can vary a lot, and by using manual bidding you are defining how much you want to spend on each bid.
- Target cost
In this option, LinkedIn automatically adjusts your bid according to your target bid price. We recommend this option once you have created your full campaign, know what you’re doing and how to optimize. You should have an exact target goal in mind when using target cost, as it enables you to control how much you are spending towards your goal. At the same time, it allows you to optimize for performance.
- Max delivery
If you have a high daily budget, we suggest using max delivery. It will aim at spending your budget faster for maximum results. This is a great tactic if you don’t have time to optimize a lot and want quick results. Bid management can also be automated using the max delivery option.
Now that you know how to set your ad spend, let’s go through the steps that you need to take in order to create your first campaign.
4 – How to create your LinkedIn advertising campaign
Creating a campaign for LinkedIn is not simple, but we’re going to help you understand the process a bit better. Follow the steps and you’ll know how LinkedIn campaign set up works so that, even if you use an agency, you will know how to guide your strategy.
Step 1 – Types of ads available on LinkedIn
There are four main types of ads you can use on LinkedIn:
- Sponsored content. These ads show videos, text, images or links. The ad buyer supplies the content and the ads show for users within the selected target audience. This content can be paid for using CPC (cost per click) or CPM (cost per thousand impressions).
- Text ads. These ads are less flashy when it comes to looks, and also tend to be lower in conversions than sponsored content. These are display ad banners that can appear in the user interface in different places. They are mostly used to aim for brand awareness.
- Sponsored InMail. This kind of ad is straight to the point: users get the ads in their LinkedIn inbox, and they appear as a normal message you would get from another user, apart from the “sponsored” tag. Sponsored InMail messages can be quite effective as they are tailored to a precise target audience. InMail campaigns are the only ones that are charged through CPS (cost per send).
- Dynamic ads pose an interesting challenge: how can you tailor your message in order to target users effectively? This kind of ad uses personalization to get closer to the target audience. We always prefer to be directly addressed. However, if overdone, dynamic ads can be annoying. There’s a delicate balance to it.
Step 2 – Set your targeting options
After you’ve chosen the type of ad that you think will resonate with your audience, you need to set up your targeting. There are many things you can target, such as company size, industry, job title, job seniority, skills, schools, degree, field of study… You can even target a single company if you want to.
There are hundreds of targeting options you can use to set up your target audience. But, of course, you need to be aware of who you want to target and that will define which options you use. In the next step, we’ll discuss how to define your target audience.
Step 3 – Choose a target audience
When it comes to targeting professionals, LinkedIn is almost perfect. Once you have an idea of how does your audience looks – let’s say, their industry, age and gender, education and experience, interests… – it’s easy to set up a campaign that targets precisely the kind of user you already know should be interested in your product or service.
LinkedIn allows you to reach for users according to a lot of targeting options. At the same time, there are a lot of categories in the LinkedIn community that would not be as easy to find in other platforms (say, Facebook or Instagram).
The fact that LinkedIn is a business network makes it easier to find professionals that would use your B2B product. If you’re just getting started with LinkedIn, it’s important to try different approaches and different targeting options. Optimizing constantly is the best way to make sure you’re speaking to the right audience, and reaching out for users that fit your business offer.
Step 4 – Create a budget
Budgeting on LinkedIn is not easy, but there are some tips that can help. By now, you already know you can use CPC, CPM or CPS pricing models to use your LinkedIn ads budget. You also know that you can set your budget to be spent in a few different ways: total budget (spend all at once), daily budget (for long term campaigns) and setting bids (to control how much you pay for each click).
LinkedIn recommends using a budget of $5000 per month for your advertising on the platform. You can set it up as a total budget and get it spent quickly, or you can set a budget of $150 per day. These options imply different strategies: the first one aims at reaching as many users as possible in a short period of time, whereas the second is the best for a slow and steady approach. Controlling you budget and LinkedIn ads billing is key to get maximum results.
Also, you should split your budget according to the 70/30 rule. This means that 70% of your budget should be targeting conversions and website traffic (using CPC or CPS – or both), and 30% should be spent on building brand awareness for your company (using CPM).
These approaches might not work the same for every company or product, but they are a great starting point. If you cannot have that much LinkedIn Ads cost in your strategy, at least try the 70/30 rule to begin with.
Step 5 – Track your campaign
Now, you created your target audience, set up a budget, chose the type of ads to use and the kind of ad spend. Your campaign goes live.
But your job is far from being done. First of all, you need to make sure you’re making the most out of your budget. Maybe the 70/30 rule does not work for you because you need to invest more in brand awareness, or you need more conversion-focused ads. You should adjust your budget and ad spend according to your needs and business goals.
You need to track performance as well. How many users engaged with your ads? This does not only refer to clicks on a link to your landing page, but also reactions to your ads and conversions resulting from your campaign.
If you are running multiple campaigns to test performance, compare them and analyse each of them to make sure your budget is going where you want it to.
It’s not easy to begin with LinkedIn Ads. Maybe you don’t have a defined LinkedIn Ads cost yet. Maybe your niche is not easy to reach using the targeting options from the platform.
We recommend going after a LinkedIn Ads agency to make sure your money is well spent and that you get to the ideal buyers for your product. Reading this article, you got an idea of how this kind of campaigns should be planned so you’ll stay on top of it through the whole process. A good cooperation between the client and the agency is essential for success.
If you’d like to learn more about how we help B2B SaaS and Tech companies grow their MRR through LinkedIn advertising, contact us online or send us an email today at email@example.com to speak with someone on our team.
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