In addition to Facebook and Instagram, LinkedIn is a platform that businesses exploit to deploy advertising campaigns to reach potential customers, build brand awareness, and boost sales. This is the best platform for B2B marketing activities targeting professionals or decision-makers in the business. However, the LinkedIn advertising cost is something that makes many people wonder if it is commensurate with the effectiveness it brings. Today’s article, Optimal Agency will help you better understand this issue!
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LinkedIn advertising pricing model
LinkedIn advertising is a type of advertising that allows advertisers to reach more than 950 million professionals worldwide. It provides space to promote products and services and attract decision-makers in the business to interact with the ad to drive conversions. Similar to Facebook, LinkedIn uses an auction mechanism to decide which ads will be shown to the target audience and determine how much the advertiser needs to pay. Depending on the goals and campaign budget, marketers can choose the appropriate bidding method when advertising on LinkedIn:
Cost per click (CPC)
This is the most popular and widely used pricing model in LinkedIn advertising. Accordingly, advertisers will need to pay each time a customer clicks on their ad. This pricing model is useful when you want to increase website traffic or generate leads because businesses only have to pay when someone clicks on the ad.
The bid amount, the level of competition, and the relevance score of the ad will determine the CPC. For the ad to be displayed, businesses need to offer a competitive bid. Advertisers need to control the bid to set a budget that is appropriate for the campaign and monitor CPC performance regularly to ensure optimal results.
Cost per impression (CPM)
In addition to the CPC pricing model, LinkedIn offers another pricing model called cost per thousand impressions. This means that businesses will need to pay for every 1000 times their ad is displayed. This pricing model meets the goal of expanding reach and increasing brand awareness. It allows advertisers to attract a larger audience without worrying about the number of clicks. Factors such as ad relevance and target audience will affect CPM.
Cost per delivery (CPS)
This is a pricing method suitable for LinkedIn’s sponsored InMail message advertising model. Accordingly, advertisers will pay each time a message is sent to the target audience’s inbox. Unlike CPC and CPM, with CPS, advertisers only need to pay for each message sent. The pricing model is effective in reaching out to customers in a personalized and direct way. Advertisers can control costs by fine-tuning their target audience and message content to increase engagement. However, it is necessary to consider the frequency of sending messages and the level of relevance to avoid annoying the recipient.
How much do LinkedIn Advertising Costs?
How much does LinkedIn advertising cost?
Compared to other advertising platforms, advertising on LinkedIn is often more expensive. Because this platform focuses on many professionals, the cost to reach them will be higher. Especially if you are advertising products and services that require a longer lead nurturing process. Moreover, LinkedIn has certain criteria for advertising content that advertisers need to spend more money to ensure appropriate content. Although advertising is expensive, its effectiveness is very high, especially in B2B marketing. LinkedIn advertising is a sound investment for businesses looking to reach decision-makers in certain industries. When it comes to LinkedIn advertising costs, are determined by pricing models. The cost per click on an ad is around $5.39. Depending on your budget, this can increase. While it is expensive, these clicks have the potential to convert into valuable leads. The average CPM for LinkedIn campaigns is $6.37. It may sound like you are paying more, but it is less than CPC. This is because you are paying for more people to see your content, not for clicks. As for the cost per message delivered to a customer’s inbox (CPS), it is around $0.70, regardless of whether they open or ignore it.
Although LinkedIn does not offer a monthly pricing model, advertisers can set monthly budgets and monthly bids to control their cost per click. For new advertisers, the platform recommends starting with a daily budget of $25. Existing advertisers should experiment with daily budgets of $50-$100 per campaign. For a monthly budget, you can spend $5,000 on LinkedIn ads, providing flexibility in your outreach strategy.
Factors affecting LinkedIn advertising cost
The above LinkedIn advertising costs are for reference only and are not set in stone. Because advertising costs will vary based on many other factors such as:
Campaign goals
Before setting up any advertising campaign, you need to clearly define your goals. It shows the results you want to achieve after the advertising campaign. Based on the campaign objectives, you can shape your advertising strategy and allocate the appropriate budget. In addition, it is also one of the factors to measure the success and effectiveness of the advertising campaign. Some common campaign objectives include increasing traffic, generating leads, and increasing brand awareness. With each different campaign objective, the bidding strategy and advertising costs will be different.
Target audience
Because LinkedIn’s advertising audience is often professionals with higher needs, the cost to reach this audience will be higher. When many advertisers target the same audience, the auction system will become more competitive. At this time, businesses will need to pay more to get clicks or impressions. Therefore, the target audience you reach will directly affect the cost of LinkedIn advertising. This platform provides many targeting options to help ads reach the right audience. You can narrow your audience and tailor your messaging to your audience to help improve your ad relevance score and optimize your ad spend.
Bid strategy
This can have a huge impact on your LinkedIn ad spend. There are three main bidding strategies: maximum delivery, cost cap, and manual bidding, which help you control your budget in the auction. Consider your bid type, payout amount, and auction model when setting up your campaign. Based on your campaign goals, decide on the appropriate bidding strategy that will help improve your ad performance and optimize your costs. Consider A/B testing different bidding strategies to find the most cost-effective approach to your goals.
Ad relevance score
Measures how appealing your ad is to your target audience compared to other ads. This affects your ad’s visibility and how much you pay. LinkedIn uses this score to predict how well your ad will perform. When your ad enters the auction, the platform calculates a predicted click-through rate based on engagement and compares it to other ads targeting the same audience. If your ad has a high relevance score, it will be more visible and cost-effective.
From the information we have just mentioned above, readers should learn more about some other outstanding articles such as effective facebook advertising guide.
Tips to reduce LinkedIn advertising cost
Once you know how much it costs to advertise on LinkedIn, keep these tips in mind to help you optimize your costs:
- Instead of targeting all businesses, create separate campaigns to target each segment. Then customize your ad message to address the needs and wants of each audience.
- Consider bidding low and closely monitoring your ad performance to win the auction. Manual bidding will give you better control over costs and you can adjust your bids in real time.
- Conduct A/B testing to compare ad versions and targeting strategies to determine which strategy is most effective to optimize for increased engagement and cost optimization.
- Use campaign group budgets to effectively manage ad spending across multiple campaigns.
- Take advantage of ad scheduling to show ads during times when your target audience is most active and likely to engage, helping to reduce costs.
- Install Pixel on your sales website to track conversion actions taken by users after clicking on your ads.
- Create high-quality ads with compelling content that resonates with your target audience to increase engagement, and conversion rates, and optimize costs.
- Regularly monitor and measure the effectiveness of your advertising campaigns to come up with appropriate ad adjustments to optimize costs.
At this point, you have a better understanding of how to calculate LinkedIn advertising cost and learn more about methods to increase advertising effectiveness and optimize costs. Hopefully, through the knowledge we have shared above, you can apply it successfully.
See more articles:
- Popular forms of advertising on Linkedin today
- How to run ads on Linkedin to increase conversion rate?
- Top 10 Facebook Ads Analytics Tool
Frequently Asked Questions
The effectiveness of LinkedIn advertising depends on the use case and the target audience. LinkedIn advertising is effective in B2B marketing with advanced targeting capabilities that allow you to reach experts and decision makers. Although advertising costs are more expensive, LinkedIn advertising can bring high profits if the target audience is active on this platform, especially products and services related to the business. Advertisers can customize ads according to goals: brand awareness, lead generation, …
You can manage your LinkedIn advertising spending by setting a campaign budget or a daily budget. You can also adjust the bid you are willing to pay for each click or ad impression. Install Pixel to track user conversion actions to help target accurately and optimize appropriate advertising content. In addition, optimize advertising content to increase click-through and conversion rates to save advertising costs.
