The question of advertising costs on LinkedIn is one of the most pressing questions when beginning a marketing campaign on this premier B2B channel.
No matter if you’re a small business owner or the head of the marketing department at your company before you begin investing in LinkedIn ads, you should at least have a general understanding of their true cost.
Alas, you should know there is not a one-size-fits-all answer.
As an ex-LinkedIn employee, I can tell you first hand that LinkedIn advertising costs are a lot more complex than you might think.
But, by taking these steps I’ve listed below, you’ll be able to form a better idea of how much LinkedIn ads cost.
Table Of Contents
Know your strategy and goals
Regardless of how much money you have in your LinkedIn ads budget, you’re going to achieve the best results from a wise and focused strategy based upon your marketing goals and your specific metrics. Without this, you’ll simply be throwing money at the wall and hoping it sticks.
Of course, it goes without saying that the primary goal of most LinkedIn ads is to generate more leads for your business. Yet, as I said, no one campaign is going to be perfect for all companies — every business needs a campaign that’s unique to them, their strategies, and their goals. To get to this, you need to do some reverse engineering.
Consider these questions:
- Do you care more about lead quantity or lead quality?
- What number of leads would be a reasonable amount to bring in for you or your sales team each month?
- What are your safety and reach numbers for the number of leads you’d like to receive each month?
- What is a CPL (cost-per-lead) you are comfortable spending?
- Are you advertising to other businesses or to consumers?
- What kind of content do you want to promote?
- Who is your target audience?
- What platforms do you want to market on in addition to LinkedIn?
- What is your CTA (call to action)?
Answering these questions is how you will begin to understand your specific strategy and goals for advertising on LinkedIn.
Free ebook for 2021
Are you looking for ways to start, grow, and optimize your business online in 2021?
Grab this ebook and learn tips from 20 industry-leading experts, digital consultants, and entrepeneurs.
Make a plan and stick to it
After you determine your goals, you have to construct a plan based on them. Focus specifically on the answers to the questions you asked yourself and prioritize them, your target audience, and your preferred ad format in the plan. In turn, this prioritization will help you answer the question of how much does LinkedIn advertising cost.
To convey the importance of sticking to the plan, consider my hypothetical scenario:
Let’s say you have a lot of creatives, messages, product or service offerings, landing pages, and target audience campaign ideas that you want to test out. That’s great, but hold your horses! Let’s think about this from the perspective of ad spend.
In order to test and see which ad type works best, you’ll need to set up each campaign as a control group to understand what works and what doesn’t (this is how you learn what to optimize going forward).
Each new facet will require you to create a new campaign or a new ad grouping, each with a set budget attributed to it. This would be thousands of dollars of experimenting on LinkedIn ads without any guaranteed results. Instead of spending more on a wide range of ads, spend less on more concentrated ads.
You need to keep your LinkedIn ad goals and strategies at the forefront of your mind and do not stray from them. These goals and strategies will point you in the right direction for your advertising plan and keep you from exhausting your entire year’s ad budget in the first month. You already know that advertising on LinkedIn is a priority to you, so start here and go forward from there by budgeting for your specific ad campaign.
Budgeting your strategic plan
I recommend you spend as little as possible in the first month of your LinkedIn ad campaign. This allows you to take a ‘test and learn’ approach to every ad campaign.
With any new ad campaign, you’re most likely not going to see significant returns in the first month. LinkedIn ad campaigns are no different. For this reason, you’ll want to start off with a lower budget to see what ads are working, what landing pages are working, what creatives and messaging are working, and so on.
Let’s take a look at my example to see how this would work in practice:
You are an IT consulting company, and you want to market your services (which typically costs several thousands of dollars) on LinkedIn. To you, a few highly-qualified leads a month would be great because, even if you land just one, you’ll achieve a return on your investment from your marketing efforts.
So, now let’s do some math:
You’ll start with trying to achieve a cost-per-lead of $200 on LinkedIn, and a goal of a few leads a month. (It’s important to note that, while LinkedIn does require you to bid at least a certain amount for cost-per-click (CPC) ad campaigns, you’ll likely be spending at least a few dollars more.)
Say you generate five leads in your first month at a $200 cost-per-lead. That would be a $1,000 total cost allotted for the first month. Based on your successes, you can strategically increase (or decrease) your ad spend depending on how that first month went.
What determines your LinkedIn advertising costs?
Who clicks on your ad, who watches your video, and who your InMail gets sent to are all ways that LinkedIn charges you for your advertising.
Your costs are determined by a variety of factors such as targeting, what other advertisers are bidding on, seasonality, and many more.
LinkedIn charges by various options, that we’ll cover in greater detail in our next section.
Like other social media platforms, there are different bidding options you can use for your LinkedIn campaign:
- СРС – Cost-per-click is the social media standard. You get charged every time someone clicks on your ad. Typical CPC’s on Linkedin can range anywhere from $6 – $24. This might seem like a pretty wide range, but LinkedIn bases this on a variety of factors including what type of audience you target, how your creative and copy are performing, and what other advertisers are bidding, to give a few examples.
- СРМ – Cost-per-thousand-impressions is a standard within the advertising industry, but more so for traditional forms of advertising (such as banner ads). It’s not suggested to choose CPM as your bidding model on Linkedin because of the exorbitant fees (sometimes CPMS can be as much as $50 per 1,000 impressions).
- CPV – Cost-per-view is for video campaigns only. You get charged once someone views your video. A view is typically counted after 3 seconds of viewing. Typical CPV’s are $0.10 – $0.25.
- CPS – Cost-per-send is only available on Linkedln and is enabled when you run a Sponsored InMail campaign. Just how it sounds, you only get charged per each InMail sent. Typical CPS is under $1, so you can create a cost-effective campaign at scale.
Controlling ad spend
To control your ad spend, I suggest using manual bidding options rather than opting for LinkedIn’s automated bidding. There are a few bidding strategies to choose from: manual, target cost, and max delivery. Here’s a breakdown of when to choose each:
- What it is – You set an amount to bid on in the auction. Manual bidding is typically the best option to choose if you know what you are doing because it will give you the greatest control over your ad spend.
- Bidding options – CPC, CPM, CPV, CPS
- Budget utilization – Depends on the bid. Bid prices can vary greatly based on who you are targeting.
- Benefits – Control over bid price used in the auction
- What it is – You set your target bid price and Linkedin automatically adjusts your bid. I’d only suggest using this option if you have been advertising for a few months and have a target goal in mind.
- Bidding options – CPC, CPM, CPV
- Budget utilization – Depends on the target cost
- Benefits – Stabilize cost per key result while optimizing for performance
- What it is – LinkedIn automatically bids to deliver max results. I’d suggest using this option if you have a high daily budget to get the most results out of your LinkedIn advertising.
- Bidding options – CPM
- Budget utilization – Designed to deliver the full budget
- Benefits – Hands off approach; no bid management necessary
Types of ads available on LinkedIn
Sponsored Content is by far the most popular and widely used type of ad on LinkedIn. But it’s not the only ad type that’s available to you.
Here’s a list of LinkedIn ads types, including when to use each:
Sponsored content (image, video, or carousel ads)
These are native ads in the feed. Sponsored Content single image ads are typically the most widely used advertising format. Videos are a great way to increase awareness. It’s best to keep videos between 15 and 30 seconds for max engagement. Carousel ads are a great way to tell a story with several images.
Editor’s note: LinkedIn also offers another lead gen solution called Lead Gen Form Ads. In essence, the lead gen forms let you promote gated content through which you can easily collect user information from your target audience. This option’s available both for sponsored content and message ads. Adam has written a separate article where you can learn more about the LinkedIn Lead Gen Forms and how to use them effectively.
Sponsored InMail (otherwise known as message ads)
Sponsored InMail is only available on LinkedIn and despite what the name may imply it’s different from regular email campaigns. InMails are only sent to users once every 60 days to reduce spam. Plus, unlike email campaigns, they only appear in the user’s LinkedIn inbox – not their email inbox.
Conversation ads are new on LinkedIn. They work like a chatbot. Useful to drive event registrants or promote your content.
Don’t forget about hidden costs
Last but certainly not least, most marketers and small business owners tend to forget about the hidden costs associated with building and managing a successful ongoing ad campaign.
Regardless of if you are doing this by yourself, with an expert agency, an advertising consultant, or a freelancer who does this for a living, there are going to be certain costs associated with each phase of the campaign.
Some advertisers charge by hourly rate, others by milestones, and others require monthly marketing retainers.
Factoring these added costs in with your ad budget is essential if you want your campaign and its very strategic approach to succeed on LinkedIn.
Is LinkedIn advertising worth it?
You can get a lot out of LinkedIn if your advertising campaigns are set up for success.
A well run LinkedIn ad campaign can generate you highly qualified top of the funnel leads for your business.
The amount you spend on advertising might seem like a lot, but your lifetime value will almost assuredly prove to be worth more in the long term.
Here’s an example of how my agency and I have helped a B2B SaaS company acquire 900+ qualified leads (with an average CPL $83) using LinkedIn marketing strategies
Any further questions?
When all is said and done, the LinkedIn advertising cost is going to depend entirely on your campaign.
But, by knowing your strategy and goals, formulating and planning a campaign based on those strategies and goals, budgeting your specific plan based on your estimates, and accounting for the hidden costs, you should be able to form a much more helpful idea of what you’re going to be paying to advertise on the site.
This is why, in my opinion, the most important step of all is to make a plan and stick to it. By doing this, you’ll have a dependable and formulated price that you’re in control of. Best of luck and happy advertising!
If you enjoyed the article and require help in setting up and managing your LinkedIn advertising campaigns, reach out to Llama Lead Gen. They are led by an ex-LinkedIn marketer and will help you build the LinkedIn ad campaign that works for your marketing objectives.