Creating a budget for a LinkedIn ad campaign is an important part of developing an effective marketing strategy on the platform. With over 722 million users worldwide, LinkedIn provides a valuable opportunity to reach a massive professional audience. However, without a clear budget and spending strategy, it can be easy to overspend on LinkedIn ads without seeing real returns on your investment.
When creating a LinkedIn ad budget, there are several key factors to consider:
Set Your Campaign Objectives
Before determining your budget, you need to establish clear objectives and goals for your LinkedIn campaign. What are you hoping to achieve? Common goals include:
- Increasing website traffic or leads
- Boosting brand awareness or thought leadership
- Generating more sales or customers
- Improving employee recruitment and hiring
Defining your objectives will allow you to better allocate budget towards the types of ads and targeting that will help you meet your goals.
Research LinkedIn Advertising Costs
LinkedIn offers an array of ad formats and placement options at varying costs. Here are some average costs to research as you set your budget:
- Sponsored Content: $2-$5 per click (CPC)
- Text Ads: $3-$8 CPC
- Message Ads: $8-$15 CPC
- InMail: $50+ per InMail
Benchmark studies show that top-performing marketers spend between $250-$500 per day for LinkedIn ads. However, costs can vary significantly depending on your targeting, bid strategy, and more. Use LinkedIn’s campaign simulator tool to get a more tailored estimate of potential costs.
Determine Your Daily or Monthly Ad Budget
When setting an overall budget, you’ll need to decide whether you want to establish a daily budget or monthly budget. Here are some pros and cons of each approach:
Daily Budget
- Pro: More flexibility to adjust budget day-to-day based on performance and capacity.
- Con: Daily changes can make performance tracking and optimization more difficult.
Monthly Budget
- Pro: Consistent spending makes it easier to track ROI and improvements over time.
- Con: Less flexibility; you may overspend some days and underspend on others.
When first starting out, a daily budget often provides more control. You can start with $100-$200 per day and scale up or down as needed. As you optimize your ads, shifting to a monthly budget of $3,000-$6,000 lets you scale up reach.
Allocate Budget Across Different Campaigns, Ad Sets & Ads
Rather than dedicating your entire budget to one broad campaign, best practice is to split your budget across different campaigns, ad sets, and ads. This allows you to test different targeting approaches and creative. You can allocate budget using the following structure:
| Campaign 1 | Ad Set A: $100/day | Ad 1: $50/day | Ad 2: $25/day | Ad 3: $25/day |
|---|---|---|---|---|
| Ad Set B: $100/day | Ad 4: $40/day | Ad 5: $30/day | Ad 6: $30/day | |
| Campaign 2 | Ad Set C: $100/day | Ad 7: $50/day | Ad 8: $25/day | Ad 9: $25/day |
This structure lets you efficiently allocate budget across different target audiences, creative approaches, and more. Make sure to set campaign spend caps so you don’t exceed your overall daily/monthly budget.
Set Your Bids to Stay Within Budget
One advantage of LinkedIn advertising is that it uses an auction model, allowing you to precisely manage costs through your bid strategy. Here are some tips for setting bids to stay within your budget:
- Start conservatively with lower bids, then increase bids for better performing ads
- Use automatic bidding to have LinkedIn automatically adjust bids to hit your targets
- Set daily/monthly spend caps on campaigns and ad sets
- Monitor spend daily and pause poorly performing ads
Test bid strategies, analyze performance data frequently, and make adjustments to ensure your top ads get the highest bids while staying in budget.
Use Conversion Tracking to Measure ROI
To determine if your budget is generating a positive ROI, you need to properly measure and track conversions, such as:
- Leads
- Sales
- Registrations
- App installs
- Newsletter signups
LinkedIn lets you easily add conversion tracking pixels and integrate with popular tools like Salesforce and Marketo. With conversion tracking set up, you can see your key conversion metrics and calculate your cost per conversion or acquisition to optimize budget.
Analyze Performance and Attribution
LinkedIn’s robust analytics capabilities let you evaluate performance to identify where budget is being spent most effectively. You can view metrics like:
- Impression share
- Clickthrough rate
- Conversions
- Cost per click
- ROAS by targeting, ad creative, etc.
Attribution modeling also shows you how ads early in the buyer’s journey contribute to later conversions. Use LinkedIn’s analytics to double down on high performing targets, ads and improve low performers.
Regularly Review Spend and Results
Check your LinkedIn Campaign Manager dashboard frequently to ensure you are pacing to hit your monthly or daily budget goals. Look at both your overall budget and budget by campaign to spot any potential overspending. If some campaigns are exceeding target spend, you may need to reduce bids or redistribute budget.
Beyond budget, analyze results on a weekly basis to calculate your return. For example, if you spent $5,000 last month and gained 20 new customers worth $4,000 each in revenue, you generated an 8X return on your ad spend. Use what you learn to optimize your budget moving forward.
Allow for Iteration and Growth
The most effective LinkedIn ad budgets evolve over time as you test, refine and scale campaigns. Especially when starting out, leave room for growth in your monthly budget as you find messaging and targeting that works. Analyze high performing areas, and reallocate budget towards the campaigns, ads and target segments driving the most conversions and ROI.
With an iterative approach, many brands see their conversion rates and overall program efficiency improve over time – meaning you may be able to achieve stronger results for less budget than initially expected.
Conclusion
By following this structured approach, you can develop an effective, customized LinkedIn ad budget to achieve your marketing goals. Here are some final best practices:
- Set clear objectives, then build your budget around them
- Research LinkedIn advertising costs to set realistic budget minimums
- Allocate budget strategically across campaigns and targets
- Leverage bidding and caps to control spend
- Track conversions to optimize ROI
- Analyze performance frequently and adjust spend accordingly
- Leave room to increase budget against top performers
With the right budget in place, you can make the most of LinkedIn’s unmatched targeting capabilities and audience reach. Approaching budgeting strategically and analytically will help maximize results and return from your investment.
