LinkedIn started as a professional networking platform, but it has evolved into a powerful advertising platform as well. The great news is that, at its core, it is still focused on businesses, even when it comes to advertising, making it the ideal marketing solution for B2B businesses.
With over 800 million members, you can easily reach your target audience based on demographics like job titles, industries, and more.
Sounds great, but what’s the catch? It can be expensive, and while this is fine as it’s an investment, you need to make sure that you’re spending enough to see results, but not spending too much. It’s a fine balance, and as a paid ads professional, I’m going to help you navigate it. I feel qualified to do so, as I run my own paid ads agency.
Understanding LinkedIn Ads
To understand the intricacies of your LinkedIn Ads budget, you first need to know which ads LinkedIn offers, and how they work. You also need to understand how to set up your LinkedIn Ads campaigns and effectively create audiences, as these are all factors that play a role in how much you will end up spending.
LinkedIn ad formats
LinkedIn has a variety of ad formats to suit your needs, such as:
- Sponsored content
- Sponsored InMail
- Text ads
- Dynamic ads
Let’s explore these a bit further.
1. Sponsored content
Think of ads that you see on Facebook and Google, and you’ll have a pretty good idea of LinkedIn’s sponsored content. These ads appear on users’ feeds in the form of single-image ads, carousels, videos, and lead-gen forms.
2. Sponsored InMail
Think of this as your own personal assistant, messaging potential customers. Sponsored InMail ads will send personalised messages directly to the inboxes of LinkedIn members.
3. Text ads
These are basic but mighty! You can include all the relevant information about your offering, often at a fraction of the cost.
4. Dynamic ads
Why have a generic ad when you can have a personalised ad targeted at a specific user? Dynamic ads offer you this opportunity.
Targeting options
There are a lot of ways that you can narrow down your perfect audience for your LinkedIn ads, such as:
- Demographics: these include job titles, company size, industry, seniority, and more.
- Interests and traits: this targets users based on their skills, interests, and groups.
- Matched audiences: these are custom audiences built based on website visitors, email contacts, account lists, and similar resources.
Factors influencing LinkedIn Ads costs
Next, it’s time to learn about what affects your budget for your LinkedIn advertising campaign. Because there are so many variables, each business will be different, so I can’t give you an exact number on what your LinkedIn Ads budget should be. But what I can do is help you understand the factors influencing your costs so that you can make an informed decision.
1. Ad objectives
What type of ad do you want? And more specifically, what do you hope to achieve with your ad campaigns? Do you want to generate leads? Have people visited your website? Increase brand awareness? Your campaign objectives determine your budget, so make sure that you are very clear on what you want to achieve.
2. Your audience
You also need to remember that your audience plays a role in your budget for your ad campaigns. The more competitive the audience, the more you will pay per click, and the same goes for very niche audiences.
3. Your ad format and placement
Remember those ad formats we spoke about earlier? They have different costs associated with them. Think about it – a text ad will naturally cost less than sponsored content. Keep the ad format in mind when setting up your ad campaign budget in your campaign manager.
4. Your bidding strategy
As with most other platforms, LinkedIn’s ads work with a bidding strategy, so your ad spend will be calculated according to this.
Depending on how you set up your ad campaign, you will be paying per click, per impression, or per message sent. You need to have a solid bidding strategy in place to help you make the most of your budget. If this sounds like a foreign concept and you’re not sure how to navigate it, you can get a LinkedIn Ads agency to do it for you.
5. Ad relevance and quality
If you have a good advertising campaign, you will be rewarded, as you will have lower costs and better placement. Make sure to have eye-catching creatives, unique copy, and relevant targeting to make sure that your ad performs well.
6. Ad optimisation
You can’t just leave your ads and hope for the best – you need to monitor them to see where you can improve, and then you need to actually improve. Look at your ads’ clickthrough and conversion rates as well as the cost per conversion to help you figure out where you can optimise. This will help you make the most of whatever ad spend you help, as you will gain helpful insight into things like which ad format performs best.
Estimating your LinkedIn Ads budget
As mentioned, I can’t give you a specific number for what you should be paying per LinkedIn ad. But I can help you with some steps to figure it out for yourself. I do also have a post on the ideal minimum budget for paid ads, so you can read that here.
1. Define your goals
Your goals play a big role in every aspect of your ads, so make sure to clearly define them, and then make sure that your budget aligns with your goals. It’s important to be realistic when it comes to this.
If you know, for example, that you want multiple campaigns that drive website traffic, you can keep this in mind when it comes to your daily budget.
2. Understand your audience
Your ads are catering to a specific audience, and the better you know your audience, the more likely it is that you can craft ads that speak to them. If you spend enough time researching your audience, you will know what they want – and you can create ads that offer them this.
3. Consider average costs
As also already discussed, your cost-per-click and other costs relating to your ads will differ from someone else’s as each business and its ads are so unique. However, LinkedIn does offer average benchmarks across different industries, so this could be a helpful way of estimating your costs at the beginning.
Making the most of your LinkedIn budget
When it comes to any form of paid advertising, your main aim should be to do as much as possible with your budget, and I’m here to share how you can do this.
- A/B test: I am a massive advocate of A/B testing. How will you know which visuals, copy, or audiences bring in the most revenue if you never test them?
- Audience segmentation: you can take your audience and segment them into smaller categories based on things like demographics and job titles so that you can deliver personalised ad experiences and improved relevance.
- Bid optimisation: use your performance data to optimise your bidding strategies even further. Test different bid amounts until you hit the sweet spot.
- Ad scheduling: if your ads perform well on some days and not on others, use ad scheduling to your advantage, so that your ads are being shown when they have the biggest chance of engagement.
- Landing page optimisation: sending users to personalised landing pages may have much better results than sending them to your website (although, if you know me by now, you already know that I recommend you test this for yourself!)
- Budget reallocation: if one ad is performing way better than another, shift your budget to that ad to make the most of what you’ve got.
- Conversion tracking: I often say that data is like gold in the paid ads world, so make sure to track your conversions accurately to know which ads actually work.
In conclusion
If you feel overwhelmed, I get it! I work in this industry, and even I need to admit that there’s a lot of information out there. In fact, this is probably only the tip of the iceberg. That being said, the more time you spend learning about paid ads and actually doing them, the better you’ll get at it.
And if you have no desire to get better at it (which I get; you’re a busy person with a lot on your plate already), then fill in the form below to learn how Snowball Creations would approach paid advertising on LinkedIn for your business.