LinkedIn offers a variety of advertising options to help businesses reach their target audience on the platform. LinkedIn advertising campaigns are charged based on either Cost-Per-Click (CPC) or Cost-Per-Thousand Impressions (CPM). The pricing model depends on the specific ad format and campaign objective.
CPC (Cost-Per-Click) Pricing
With CPC pricing, advertisers are charged each time someone clicks on their ad. This pricing model is used for LinkedIn Sponsored Content, Sponsored InMail, and Text Ads. Here’s a more detailed look at how each ad format is charged:
Sponsored Content
Sponsored Content appears in the LinkedIn feed and is charged on a CPC basis. You place a bid for how much you’re willing to pay each time someone clicks your Sponsored Content ad. LinkedIn runs an auction and displays your ad to members who are most likely to click on it, up to your daily budget amount. The actual CPC depends on factors like your bid, ad relevance, and competition from other advertisers.
Sponsored InMail
Sponsored InMail allows you to send targeted messages directly to LinkedIn members’ inboxes. You are charged on a CPC basis, meaning you pay each time a recipient clicks anywhere in your InMail message. Pricing starts at around $2 per click.
Text Ads
Text ads can appear alongside LinkedIn feed posts and LinkedIn Pages. You pay each time someone clicks your text ad. Cost per click typically ranges from $0.75 – $3.00+ depending on your target audience, industry, geography, and other factors.
CPM (Cost-Per-Thousand Impressions) Pricing
With CPM pricing, advertisers pay for each 1,000 impressions their ad receives. This model is used for Sponsored Content carousel ads and Dynamic Ads on LinkedIn.
Sponsored Content Carousel Ads
Carousel ads allow you to showcase multiple pieces of content in a scrollable format. Instead of paying per click, carousel ads are charged on a CPM basis. Rates vary significantly based on your targeting, but average around $10 per 1,000 impressions.
Dynamic Ads
Dynamic Ads automatically showcase specific products/services to members based on their interests and browsing history. You are charged on a CPM basis for Dynamic Ads. Average CPM rates are around $5-10.
Minimum Daily Budget
In addition to CPC and CPM costs, LinkedIn advertising campaigns require a minimum daily budget. This ensures your ads receive sufficient reach and frequency to drive results. Minimum budgets vary by ad format:
| Ad Format | Minimum Daily Budget |
|---|---|
| Sponsored Content | $10 |
| Sponsored InMail | $100 |
| Text Ads | $5 |
| Dynamic Ads | $10 |
Other Potential Costs
In addition to CPC, CPM, and daily minimums, there are a few other potential costs to be aware of with LinkedIn advertising:
Targeting Options
Using more precise targeting options like job titles, skills, company name, etc. generally increases your CPC and CPM rates. Highly targeted campaigns end up reaching a smaller audience, so LinkedIn charges more to show your ads to these specific members.
Ad Creation
If you choose to have LinkedIn’s creative team design your ads, there is an additional charge for this service. LinkedIn also offers automated A/B testing of ads to optimize performance, which comes with a fee.
Audience Expansion
LinkedIn gives advertisers the option to expand their target audience beyond specified criteria to increase reach. However, expanding your target audience comes at an additional cost and will likely increase your CPC/CPM.
Billing Cycle
LinkedIn bills all advertising charges monthly. At the end of each month, they’ll send an invoice summarizing your total spending for each campaign, plus any applicable fees.
It’s important to closely monitor your LinkedIn campaigns throughout the month to avoid going way over budget. You can set daily spending caps on campaigns to help control costs.
Getting the Best Value
Here are some tips to help maximize the value of your LinkedIn advertising investment:
- Set specific goals for each campaign and track performance metrics like click-through rate and cost per lead.
- A/B test different targeting options, bids, and ad variations to find the ideal approach.
- Analyze performance by time of day and day of week to optimize your spend.
- Use LinkedIn’s campaign management tools to stay on budget.
- Only target your best-fit audience to get quality clicks and conversions.
Conclusion
LinkedIn offers robust targeting capabilities, but the ability to zero in on specific demographics comes at a cost. To maximize return on investment, focus on reaching your core target audience with highly relevant messaging. Measure performance frequently and tweak campaigns if they aren’t delivering results.
With accurate targeting, optimized bids, and relevant ad content, LinkedIn advertising can be an effective driver of leads and sales for B2B companies. But it’s important to keep a close eye on your spending and performance to ensure you’re getting the most bang for your buck.
