How am I charged for LinkedIn ads?

LinkedIn ads work on a pay-per-click (PPC) pricing model. This means you only pay when someone clicks on your ad. The amount you pay per click depends on the auction process and your bid amount.

What is the auction process?

LinkedIn runs an auction each time your ad is eligible to be shown. Your bid enters the auction along with other advertisers bidding for the same ad placement. The ad with the highest bid wins and is displayed. You only pay if your ad wins the auction and the viewer clicks on it.

What factors determine the auction price?

• Your bid amount – The maximum you’re willing to pay for a click.
• Ad rank – LinkedIn’s estimate of how relevant your ad and landing page are to the viewer.
• Competition – The number of other advertisers bidding for the same ad placement.

If you bid higher or have a higher ad rank, you’re more likely to win the auctions and get more clicks. But you’ll also pay a higher cost per click.

How is your bid amount determined?

When creating your campaign, you set a daily budget and a max bid amount. LinkedIn will automatically adjust your actual bids to try and get clicks at the lowest cost within your budget. Here are the bid types:

Manual bidding

You set the max CPC bid amount. LinkedIn will bid up to that amount in auctions based on your budget, ad rank, and competition.

Automatic bidding

LinkedIn automatically sets bid amounts to aim for your target cost-per-click (CPC) based on your budget and campaign objectives.

What factors influence your CPC cost?

The cost per click you actually pay depends on multiple factors:

• Targeting – Broad targeting of a large audience costs less than narrow targeting of a niche audience.
• Landing page relevance – Ads with highly relevant landing pages get a boost in ad rank, resulting in lower CPC.
• Competition – Higher competition for keywords/placements drives CPC costs up.
• Time of day/week/year – Peak usage times normally have higher CPC costs.
• Device – Mobile clicks tend to be more expensive than desktop clicks.

How much do LinkedIn ads cost?

LinkedIn ad costs vary significantly based on factors like industry, targeting, and competition. Here are some average LinkedIn ad costs:

As you can see, InMail ads tend to have the highest CPC, while more targeted Dynamic Ads have lower costs. Within each ad type, your costs also depend heavily on factors like industry, target audience, and how competitive your keywords are.

How much do I pay daily/monthly?

Your total daily/monthly spend on LinkedIn ads depends on:

• Your daily campaign budget
• Your actual cost-per-click (CPC)
• How many clicks your ads receive

For example, if you set a daily budget of $100 and your ads average $5 per click, you could expect to spend $100 and receive around 20 clicks daily. Your monthly spend would be approximately $100 x 30 = $3000.

Factors impacting spend

Some things that influence your overall ad spend include:

• Audience size – Bidding on a narrow audience will limit your clicks and spend.
• Bid strategy – Manual bidding gives you more control to cap spend.
• Landing page relevance – More relevant landing pages increase your ad rank and conversions.
• Competing advertisers – More competition means higher CPC bids are needed.
• Offer relevance – More appealing offers will get more clicks.

How can I estimate my LinkedIn ad costs?

Here are some tips to estimate your potential LinkedIn ad costs:

1. Research average CPC rates for your industry and ad types you plan to use.
2. Use LinkedIn’s keyword planner to get suggested bid estimates for your target keywords.
3. Factor in your daily budget and target CPC to estimate clicks and spend.
4. Analyze competitor ad activity for clues on prevailing costs.
5. Start campaigns on a small scale to gauge real-world CPC performance.
6. Use LinkedIn’s bid simulator to test different targeting options and bid amounts.
7. Review reporting on your other LinkedIn campaigns to see current CPC.

How can I reduce my LinkedIn advertising costs?

Some ways to potentially decrease your LinkedIn ad spend include:

• Tightly define your target audience to reduce irrelevant clicks.
• Improve landing page relevance to boost ad rank.
• Bid aggressively on high-value keywords, and selectively on others.
• Create ad variations and A/B test to improve CTR.
• Use automatic bidding strategies to optimize for conversions or CPC.
• Advertise consistently, pausing never improves cost efficiency long-term.
• Analyze performance trends and optimize targeting.
• Monitor competitor activity and look for new opportunities.

Conclusion

LinkedIn advertising costs are determined largely by an auction model based on your bids and budget. To estimate your costs, research average CPC rates, use LinkedIn’s tools, review reports, and test performance with small campaigns. Controlling your daily budget, improving ad rank, and thoughtful targeting are key ways to gain the results you want at a reasonable CPC. Consistent optimization and spending are needed for sustainable, low-cost LinkedIn advertising.