LinkedIn conversation ads allow advertisers to engage directly with LinkedIn users through personalized messages. The pricing model for LinkedIn conversation ads is different from traditional LinkedIn ads. Here’s an overview of how LinkedIn conversation ads are charged:
Conversation Ad Pricing Model
LinkedIn conversation ads are priced based on cost-per-conversation, rather than cost-per-click or cost-per-impression. Advertisers are charged when a LinkedIn member responds to the conversation ad with a message. The cost varies based on factors like demand and member engagement, similar to how auction-based pricing works for other LinkedIn ad formats.
Conversation Ad Bidding
For each conversation ad campaign, advertisers set a maximum bid for each conversation. This bid controls how often your ad is shown to your target audience. The actual price paid (cost-per-conversation) is determined in a real-time auction every time your ad is eligible to be shown. Your bid competes against other advertisers’ bids to win each auction and have your ad seen.
If you win the auction, you pay the minimum bid amount needed to hold your ad position. This amount may be lower than your max bid depending on auction activity. LinkedIn bills you only when someone responds to your ad.
Estimating Costs
It can be challenging to estimate costs for conversation ads upfront since pricing is dynamic based on auction activity. However, LinkedIn provides advertisers with estimated conversation rates and average costs to help plan budgets. You can also use previous campaign performance to forecast costs for similar target audiences.
Conversation Ad Billing
With LinkedIn conversation ads, you are billed only for conversations generated, not ad impressions. The conversation billing model means you pay only for demonstrated interest from your target audience.
Each conversation is billed individually as it occurs. You will see conversation events and associated costs in your LinkedIn Campaign Manager billing reports. Conversations are attributed to the time zone of the LinkedIn member at the time of the conversation.
Conversation Ad Budgets
For LinkedIn conversation ad campaigns, you set a daily budget which acts as a spending limit. Your daily budget is spread throughout the day based on auction activity and conversation rates. Once your budget is exceeded for a given day, your ads stop serving.
Overall campaign budgets can also be set across multiple days or weeks, allowing you to pace conversations over longer periods. Make sure to set your daily budget high enough to maintain ad visibility and continuous conversations.
Why Conversation-Based Billing?
Charging on a cost-per-conversation basis aligns incentives so marketers only pay when target audiences demonstrate direct interest. With other biddable ad formats, advertisers may pay just to drive impressions even if engagement is low.
The conversation pricing model also helps optimize spend toward interested segments. You can discover the audiences most likely to respond without wasting budget on members who don’t engage your message.
Optimizing Conversation Ad Costs
There are a few key ways advertisers can optimize LinkedIn conversation ads to achieve lower cost-per-conversation:
- Set specific target audience filters like seniority, job function, company size, etc. to zero in on your best customers.
- A/B test different conversation starters and messages to improve response rates.
- Analyze conversation metrics to identify your best performing segments and allocate more budget to those audiences.
- Actively monitor competition and adjust bids to stay competitive in the auction.
- Create negative remarketing lists to avoid messaging members who haven’t previously engaged.
Additional Conversation Ad Features
Beyond the conversation-based pricing model, LinkedIn conversation ads include these additional features:
- Real-time optimization: LinkedIn leverages AI to optimize targeting and bids to improve conversation rates and lower costs.
- Automated conversations: Use LinkedIn’s Conversation Builder tool to map out automated conversation flows based on member responses.
- Native messaging: Continue conversations seamlessly within LinkedIn Messaging after connections are made.
- Audience expansion: Enable your ads to find additional matching members beyond your core target audience.
Summary
LinkedIn conversation ads provide a new model of social advertising based on cost-per-conversation billing. While costs aren’t fixed upfront, the pricing aligns payouts directly to demonstrated engagement from your audiences. With the right targeting and optimization, LinkedIn conversation ads can drive conversations with your best-fit prospects at efficient rates.
