When it comes to LinkedIn ads, many people wonder about the cost, especially the cost per click. But as any smart business owner can tell, it’s not just about the numbers but also about the value that drives your business forward.
What’s the value of fresh, promising leads for your business? Can you easily acquire such leads through LinkedIn ads?
We will simplify the complexities of LinkedIn advertising costs & pricing. We’ll discuss not just the LinkedIn advertising pricing but also explain how it all fits together so you can make an informed decision.
Factors that Influence the Cost of LinkedIn Ads
There are various factors that can affect LinkedIn advertising costs and pricing. These include your target audience, bidding strategy, campaign objective, and ad relevance score.
- Target Audience: When bidding against other advertisers, the cost of winning the auction is directly linked to how appealing your target audience is. Simply put, the more engaging and relevant your audience, the higher will be the LinkedIn advertising pricing.
- Bidding Strategy: “Bidding Strategy” involves deciding how much you are willing to pay for actions like clicks or impressions during ad auctions. Your strategy plays a vital part in the overall cost for achieving specific outcomes or key performance indicators (KPIs) in a campaign.
- Maximum Delivery strategy automates bidding, maximizing competitiveness and results within budget.
- Manual bidding provides ultimate control in the auction.
- Cost Cap bidding allows you to set a maximum cost per action (CPA) for results.
- Objective: “Objective” in advertising refers to the campaign’s ultimate goal, like boosting awareness or generating leads. Chosen objective for LinkedIn ad campaign will shape the available optimization goals and bidding strategies.
And essentially, it influences LinkedIn advertising costs for your campaigns. For instance, a campaign focused on awareness might prioritize reaching a broad audience. This can influence your bidding strategies and costs differently than a lead generation campaign, which prioritizes actions contributing directly to acquiring leads.
- Ad Relevance Score: LinkedIn’s auction favors relevant, engaging ads, with scores influenced by factors like click-through rate, comments, likes, and shares. Higher relevance translates to lower LinkedIn ads costs.
LinkedIn Advertising Pricing Basics
LinkedIn plays by a different rulebook when it comes to pricing — it operates on a bidding system instead of a fixed price model. Bidding options are available for LinkedIn ads where advertisers pitch their bids, and the highest bidder earns prime advertising space on the platform.
Here’s how LinkedIn advertising pricing and bidding work:
- Pay-Per-Click (PPC): Here, you’re the boss. You pay a fee for each click your ad gets. Perfect for those seeking direct engagement and connections.
- Cost-Per-Impression (CPM): The “M” in CPM stands for impressions. You pay for every 1,000 views your ad gets. Great for boosting brand visibility and reaching a broader audience.
- Cost-Per-Send (CPS): The CPS model charges you for ads sent to LinkedIn inboxes. This means you actually pay for each successful “send.” Ideal for targeted and personalized outreach.
How Much Does LinkedIn Advertising Cost Per Click?
So, how much does LinkedIn advertising cost per click? Well, with this model, you only pay for specific clicks, determined by your goals, ad type, and format. It’s important to note that LinkedIn CPC ads require manual bidding for ad space.
The average CPC on LinkedIn falls between $2.00 and $3.00. While this might seem a tad pricey, these clicks have the potential to transform into valuable leads.
How Much Does LinkedIn Advertising Cost Per 1000 Impressions?
CPM, or cost per mille, calculates LinkedIn advertising costs based on the number of impressions your ad receives. With an average cost of $5.01 – $8.00 per 1000 impressions, this model offers a cost-effective alternative, focusing on impressions rather than clicks.
CPM could suit your business if brand recognition is your focus. These campaigns target broader audiences, prioritizing visibility over clicks. As such, it is a good choice for building brand awareness before diving into lead generation.
How Much Does LinkedIn Advertising Cost Per Month?
LinkedIn doesn’t offer a monthly pricing model, but advertisers can set their own monthly budgets. Options include total budget per month, monthly budget for long-term campaigns, and setting monthly bids to control per-click costs.
LinkedIn recommends a monthly budget of $5000, offering flexibility in strategy – whether for rapid reach or a gradual, steady approach.
How Much Does LinkedIn Advertising Cost Per Send for Sponsored InMail Campaigns?
Sponsored InMail campaigns operate on the CPS pricing model. Under this setup, LinkedIn charges for each message sent to the target audience’s inbox, regardless of whether the user opens or ignores your message.
The LinkedIn advertising pricing under the CPS model ranges from $0.26 – $0.50 per send.
How to Manage Your Ad Spend on LinkedIn
Sure, you’re now aware of everything you wanted to know about how much LinkedIn advertising costs. And it can be pretty expensive!
Luckily, LinkedIn provides you with multiple ways and tools to control ad spend and allocate budgets based on business and marketing goals.
Consider these strategies.
1. Base Your Ad Budget on Your Objective
As you know, every impactful ad campaign kicks off with a well-defined objective. LinkedIn ads are no different. You can use your campaign objective as the cornerstone to control your ad spend on LinkedIn. Think about the ad types, formats, optimization goals, bidding strategies, and pricing models.
For instance, if your goal is to enhance brand awareness, you can use LinkedIn’s specific sponsored content ads, dynamic ads, and text ads. Depending on your choice, you’ll need to decide between reach and impressions as your optimization goal.
While reach targets unique visitors, impressions encompass total views, potentially from repeat visitors. If you choose impressions, you can select from three bidding strategies, paying per thousand impressions under the CPM pricing model.
Thankfully, LinkedIn’s objective-based pricing resources guide you in selecting ad formats based on objectives and associated optimization goals, bidding strategies, and pricing models. This knowledge empowers you to wield greater control over your ad spend and achieve better results with your LinkedIn marketing strategies.
2. Use Campaign Group Budgets
Campaign group budgets offer a better way to efficiently manage and streamline your ad spend across multiple campaigns. You can use this feature to cluster related campaigns and set a maximum budget that covers the total combined expenditure of all campaigns within the group.
For instance, if you’re running campaigns targeting healthcare and manufacturing industry buyers, you can create separate campaign groups and assign identical maximum budgets to ensure equitable spend distribution across both verticals.
3. Optimize Your Bidding Strategy
Your bidding strategy holds the key to both your expenditure and the success of your campaign. It is always a good idea to kick off with a conservative bid.
For example, you can start by placing your bids just a notch above the minimum requirement. Next, keep a close eye on your ads daily to assess their reach and impact.
If you think your ads are falling short on visibility, it’s likely your bid is trailing behind competitors. As such, you may want to do some experiment, tweaking your bids and bid strategy gradually. In doing so, make sure they align with your budget and the specific results you aim to achieve.
4. Keep a Close Eye on Budget Usage
LinkedIn offers two types of budgets for each campaign called a maximum daily budget and a maximum lifetime budget. You must select at least one budget type per campaign.
Once your budgets are set and your campaign is live, LinkedIn Campaign Manager tool will provide insights into your budget consumption rate. If your budget isn’t fully utilized, it may signal the need to increase your bid. Conversely, if your budget usage is too quick, you can slow down your bid so your ad spend rate decreases.
5. Enhance Your Campaign Impact Through Ad Testing
Testing your ads is another great way to raise your ad relevance score. This not only optimizes your campaign budget but also boosts your performance in the LinkedIn ad auction, leading to a reduction in your cost per result.
LinkedIn recommends improving your relevance score by experimenting with various elements like images, calls-to-action (CTAs), and messages in your ads.
The good news is that you can A/B testing your ads directly in Campaign Manager, where you track results in real-time. It lets you divide your audience into two groups, showing each group with only one version of your ad.
6. Target One Country at a Time
Your ad metrics, particularly the average cost per click (CPC), fluctuate significantly across different countries. Multiple factors can influence this variance, such as competition levels and the size of the target audience in each country.
Another crucial factor is the relative value of your currency compared to the currency of the country where your ads are running. To navigate this complexity, it is good to experiment and refine your LinkedIn ad strategy one country at a time.
This tailored approach allows you to adapt to the unique dynamics of each market, ensuring optimal results and efficient resource allocation.
7. Use LinkedIn’s Built In Lead Generation Forms
Did you know that you can also slash your LinkedIn ads costs by using the platform’s built-in lead generation forms? Yes, that’s absolutely true.
Lead gen forms streamline the lead’s journey, making it quicker for potential customers to provide information. The result? A notable reduction in your overall LinkedIn ad spending. It’s a smart move that enhances efficiency and trims down unnecessary costs.
What Is the Minimum Budget for LinkedIn Advertising?
LinkedIn sets a minimum daily budget of $10 per campaign, providing a useful starting point for budget allocation. Ideally, businesses may consider a daily budget between $50 and $100, translating to $1,500 to $3,000 over a month for a single campaign.
What Is a Good Budget for LinkedIn Advertising?
For those looking to make a substantial impact with LinkedIn advertising, we recommend a budget of $5,000 per month. This allows testing various strategies, generating awareness, leads, and website traffic, with a structured approach to achieve meaningful results.
Now, why the $5,000 benchmark? Let’s simplify it through a three-step funnel breakdown:
1. Top of Funnel – Awareness: Invest $35 daily to generate 1,000 impressions. This primes the audience with initial brand awareness.
2. Mid-Funnel – Lead Generation: Put $100 daily in mid-funnel ads, securing one lead each day. This stage focuses on cultivating valuable leads for your business.
3. Bottom of Funnel – Website Traffic: Dedicate $30 daily for the bottom of the funnel, driving four clicks daily. This draws targeted traffic to your website, nurturing potential conversions.
With this budget strategy, you strategically distribute resources across funnel stages, ensuring a well-rounded and impactful LinkedIn advertising campaign.
Is Advertising on LinkedIn Worth the Cost?
While LinkedIn Ads may appear relatively expensive in terms of CPMs, CPCs, and CPLs, a majority of advertisers express satisfaction with the return on investment (ROI). The effectiveness of LinkedIn Ads also depends on factors such as targeting capabilities and product value. This makes it essential to evaluate your business’s specific needs before diving into LinkedIn ads.
Plus, before resorting to a LinkedIn Ads campaign, consider alternative channels based on ease of targeting. LinkedIn Ads are particularly effective for reaching challenging audiences. And as with any marketing strategy, understanding your audience and aligning your objectives are crucial elements in determining whether LinkedIn ads costs are worth the value.