More and more digital marketers are tipping their toes into Linkedin advertising.

We are constantly hearing questions like:

– Do Linkedin ads work?

– What are the costs?

– What is a good CTR?

– Which type of ads to use?

Are you looking to generate more leads, drive website traffic, promote your personal brand or build brand awareness for your company?

Have you heard that advertising on LinkedIn is a great place to start? 

In order to avoid the frustration, I think it would be wise to start with fundamentals:

Why do you want to advertise on Linkedin? What is the outcome you would like to get? 

How many deals are to be opened and closed as a result?

How many new clients do you want?

Please, ask yourself those questions BEFORE advertising on LinkedIn.

Depends on your desired result we can use different approaches, different types of ads and sometimes do it organically. Let’s assume, you’ve done your homework and know the essentials:

1. How does your ideal customer look like?

2. Have you listed the targeting criteria?

3. Are you confident that Linkedin is the place where your targeted audience spend time on?

If you answered Positively on these 3 questions, you can proceed with Linkedin Paid Advertising and start arranging marketing campaigns on Linkedin.

What are the costs?

LinkedIn ads come with a premium Cost per Click.

Based on LinkedIn’s higher CPC, companies with smaller deal sizes or smaller margins will have trouble seeing a positive return on investment.

You will want a large enough deal size, in the end, to help offset your upfront cost and to ensure a return on your ad spend. SAAS companies, software solutions, technology, crypto, finance, fortune 500 and other B2B companies with larger deal sizes and longer customer lifetime value (CLV) often find the most success with LinkedIn ads.

How much do LinkedIn ads cost?

According to LinkedIn, they offer “ads for any budget.” However, this is simply not the case in my experience.

As LinkedIn ads are a better fit for companies with larger deal sizes, they are also a better fit for companies with larger budgets. I am not saying that you can’t advertise on LinkedIn with a smaller budget, you will just need to adjust your expectations around performance and success. 

According to LinkedIn, there are 4 main factors that can influence cost:

  1. Target audience: With narrow targeting options, you run into the issue of targeting a high-demand audience. Higher demand equals a higher cost, based on the value LinkedIn assigns the audience and the amount of competition. 
  2. Bid: Similar to Google, during the auction process you only pay $0.01 more than your competitor’s bid, but what you are willing to pay will be a determining factor in your overall cost (higher competition = higher cost-per-clicks). Meaning that if your competitor is willing to pay $2.50 for a click and you are willing to pay $3.00, you will win the auction and LinkedIn will only charge you $2.51 for the click. 
  3. Objective: The campaign objective you choose will determine the optimization goals and bidding strategies available for your campaign.
  4. Ad relevance score: If the content is valuable to the audience (which is determined by the number of clicks) and the overall engagement the ad gets from it, LinkedIn will serve your ad to your audience as desired. If the ad is not generating clicks or engagement, LinkedIn will stop serving the ad. High ad relevance is typically rewarded on the LinkedIn platform with lower cost-per-clicks.

For most companies, I would recommend starting with a monthly ad spend budget between $2,000 – $5,000.

A budget of this size will allow for a daily spend between $60 and $150/160, which typically yields enough data to determine performance success and allow for faster scaling.

Which type of ads to use?

One of the best attributes of LinkedIn ads is the variety of ad types available. Here are some of those available types and the key takeaways you should always consider.

  • Text ads.
  • Sponsored content.
  • Sponsored in-mail.
  • Video ads.

These are just like sponsored content except you are engaging your LinkedIn members natively in their news feed on both desktop and mobile with video (rather than static imagery).

If you can sustain the recommended budget and have a deal size large enough to create a positive ROI, LinkedIn ads can be a splendid investment.

LinkedIn ads typically yield high-quality leads and offer larger niche targeting options, making them an ideal solution for most B2B companies. 

If the proposed budget and longer sales cycle seem intimidating, you may want to consider other options instead of investing on LinkedIn, such as a Google pay-per-click (PPC) with retargeting or Facebook of course. 

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