LinkedIn is the world’s largest professional networking platform with over 722 million users worldwide. As such, it presents a major opportunity for companies looking to advertise to a targeted B2B audience. But how effective is LinkedIn advertising compared to other digital marketing channels? In this article, we’ll examine the key metrics and data points that reveal the ROI of LinkedIn ads.
LinkedIn’s audience and targeting capabilities
One of the main appeals of LinkedIn advertising is the platform’s extensive profiling of its user base. LinkedIn members provide detailed information about their job titles, companies, skills, education, and more. This allows marketers to segment audiences and serve highly targeted ads.
Some key targeting options on LinkedIn include:
– Job title and seniority
– Company name, industry, and size
– Geographic location
– Skills and experience
– Groups and interests
– Content engagement
This level of targeting means ads can be directed at niche professional audiences that are hard to reach elsewhere. For example, a cybersecurity company could target “Chief Information Security Officers at Fortune 500 firms”.
LinkedIn claims targeting accuracy is 30% better compared to Facebook and Twitter. The platform’s focus on professionals also gives it an advantage over the more fragmented, personal nature of other social networks.
LinkedIn ad formats
LinkedIn offers a range of ad formats for marketers to choose from:
– Sponsored content – attention-grabbing in-feed native ads
– Sponsored InMail – direct messages sent to members’ inboxes
– Text ads – traditional PPC text ads
– Dynamic ads – personalized ads based on member’s activity
– Conversation ads – sponsored content that includes a call-to-action button
The most popular format is sponsored content, which promotes content like articles, infographics, and videos in-stream alongside organic posts. This native ad integration makes the ads less intrusive compared to sidebar banners.
LinkedIn advertising metrics
So what do the key metrics reveal about LinkedIn ad effectiveness? Here are some of the top-level advertising benchmarks on the platform:
Clickthrough rate (CTR)
– LinkedIn sponsored content – 0.90%
– LinkedIn text ads – 0.53%
– Average Facebook ad – 0.90%
– Average Twitter ad – 0.35%
Conversion rate
– LinkedIn Sponsored Content – 2.74%
– Average Facebook ad – 1.84%
– Average Twitter ad – 1.77%
Cost per click (CPC)
– LinkedIn – $8.18
– Facebook – $1.72
– Twitter – $3.17
Cost per thousand impressions (CPM)
– LinkedIn – $11.00
– Facebook – $7.19
– Twitter – $7.77
These benchmarks indicate that LinkedIn ads can drive higher clickthrough and conversion rates compared to other social platforms. However, the tradeoff is a higher cost per click and CPM.
Case studies on LinkedIn ad performance
Looking beyond the benchmarks, real-world examples highlight how impactful LinkedIn ads can be when executed correctly:
Adobe
– Ran a sponsored content campaign targeted to marketing professionals
– Generated a clickthrough rate of 3.08%, almost 3x higher than the LinkedIn benchmark
– Saw an engagement rate of 48.1% from executive-level titles
Polycom
– Targeted IT decision makers with sponsored InMail messages
– Achieved open rates of more than 50% and clickthrough rates over 10%
– Generated a pipeline of over $2 million in new business opportunities
Towers Watson
– Promoted thought leadership content to HR executives
– Reached more than 400,000 unique LinkedIn members
– Generated more than 1,900 leads and counting
These success stories reinforce that savvy targeting and compelling creative are key to unlocking great performance on LinkedIn.
How does LinkedIn advertising scale for larger brands?
The highly targeted nature of LinkedIn ads also offers advantages for larger brands looking to scale their campaigns and reach very specific audiences.
For example, Adobe ran a successful seven-figure LinkedIn advertising campaign focused on reach. By layering in precise targeting beyond job title, such as skills, groups, and interests, Adobe efficiently reached its target audience of marketing leaders and professionals.
Some key results from this large-scale LinkedIn campaign include:
– Delivered over 110 million LinkedIn feed impressions
– Achieved a clickthrough rate of 3.6%, far surpassing benchmarks
– Reached 90% of target accounts identified in LinkedIn’s marketing segment
The campaign was also effective at driving leads, producing over 18,000 marketing qualified leads (a 300% increase over the initial goal).
This example demonstrates how LinkedIn’s segmentation capabilities allow brands to gain reach while maintaining targeting precision.
What types of companies benefit most from LinkedIn ads?
While any brand can find success on LinkedIn, these company types tend to benefit most from its B2B targeting and professional audience:
– Technology companies – sell to IT pros, developers, CIOs, etc.
– Software/SaaS companies – target decision makers across functions
– Professional services – connect with clients in legal, accounting, consulting etc.
– Recruitment/HR – access passive talent in any industry
– Higher education – engage prospective students and alumni
– Financial services – reach investors, financial advisors
– Corporate training – get in front of employees needing development
For mass consumer brands, LinkedIn advertising can still be effective at reaching decision makers and influencers within organizations. But other social platforms may provide greater overall reach.
How can companies maximize LinkedIn advertising results?
To improve LinkedIn ad performance, here are some best practices companies should follow:
– Analyze audience insights – use LinkedIn’s audience reporting to identify your ideal customer segments and which offerings resonate most.
– A/B test ad variations – try different messages, designs, ad formats, etc. and focus budget on what works best.
– Retarget website visitors – serve ads to previous visitors to drive conversions.
– Promote gated assets – run ads pointing to content downloads, email subscriptions, events etc.
– Measure beyond clicks – track leads, pipeline, and closed business to calculate ROI.
– Monitor performance – check metrics regularly and optimize for CTR, conversions, frequency etc.
– Use Matched Audiences – upload customer lists to target your existing audience and similar profiles.
– Combine targeting options – layer job role, company, interests etc. for more precise targeting.
– Make ads stand out – use visuals, personalized messaging, custom templates to get attention.
– Follow up on InMail – if sending InMail ads, put a system in place to follow up on opens/clicks.
Conclusion
In summary, advertising on LinkedIn can deliver outstanding results due to the platform’s unique professional audience, granular targeting capabilities, and impactful ad formats. But maximizing your investment takes skill – the right mix of audience segmentation, compelling creative, and performance tracking is vital. For B2B brands willing to master those disciplines, LinkedIn offers some of the most efficient access available to a highly valuable audience.