LinkedIn is the world’s largest professional network with over 722 million users worldwide as of June 2022. With its huge user base composed primarily of working professionals, LinkedIn is an attractive platform for businesses looking to advertise their products and services.
But how much do LinkedIn ads really cost? In this comprehensive guide, we’ll break down the different ad formats available on LinkedIn, pricing models, and tips to optimize your ad spend.
Types of LinkedIn Ads
There are several ad formats you can use to reach your target audience on LinkedIn:
Sponsored Content
Sponsored Content appears in the LinkedIn feed, similar to organic posts. You can use text, images, and video. Sponsored Content is ideal for raising brand awareness and engagement.
Sponsored InMail
Sponsored InMail allows you to send targeted direct messages to LinkedIn members matching your ideal customer profile. Great for personalized outreach and lead generation.
Text Ads
Text ads appear on the right rail of LinkedIn pages and above search results. They are optimized for click-throughs and driving traffic to your website.
Dynamic Ads
Dynamic ads automatically showcase specific products/services to LinkedIn members who have already visited your website or belong to your target audience.
LinkedIn Ad Pricing Models
There are two main pricing models for LinkedIn ads:
Cost Per Click (CPC)
You are charged whenever someone clicks your ad. A minimum bid is required to participate in the ad auction.
Cost Per Thousand Impressions (CPM)
You are charged based on the number of times your ads are displayed. Impressions are counted each time your ad appears on a LinkedIn page.
Most small and medium businesses opt for CPC model. However, CPM can also be effective for raising brand awareness among a large audience.
Average LinkedIn Ad Costs
The average cost per click in the US for LinkedIn ads is $8-$12. Average CPM rates range from $10-$30.
Here are the average costs for each ad format:
| Ad Format | Average Cost |
|---|---|
| Sponsored Content (CPC) | $3 – $5 per click |
| Sponsored InMail (CPM) | $100 – $250 per thousand impressions |
| Text Ads (CPC) | $5 – $8 per click |
| Dynamic Ads (CPM) | $10 – $20 per thousand impressions |
However, actual costs vary significantly based on factors like industry, ad positioning, competition, and bidding strategy.
How Bid Price Impacts Cost
For both CPC and CPM ads on LinkedIn, the higher your bid price, the more likely your ads are to be displayed prominently and frequently to your target audience. However, you also pay more per click or impression.
Lower bid prices mean your ads have less exposure and you pay less per click/impression. But it becomes harder to achieve campaign objectives like clicks and conversions.
Most advertisers A/B test different bid prices to find the optimal balance between ad visibility and cost.
Audience Targeting Options
Targeting relevant audiences is key to maximizing LinkedIn ad ROI. Here are some of the ways you can target your ads:
Location
Target ads to specific countries, cities, regions, zip codes.
Company
Target ads by company name or industry.
Job Title/Function
Target ads to specific job titles like Finance Directors, HR Managers etc.
Interests & Skills
Target members based on listed interests and skills relevant to your product.
Demographics
Target ads by criteria like age, gender, education level, seniority etc.
Custom Matched Audiences
Target audiences based on email lists and website visitor data.
Leveraging the above targeting options appropriately allows you to hone in on the audiences that are more likely to engage with your ads and become customers. This ultimately lowers customer acquisition costs.
Best Practices to Lower LinkedIn Ad Costs
Here are some tips to help drive down the cost of your LinkedIn ads:
Set Specific Campaign Goals
Be clear about what you want to achieve from the outset – brand awareness, clicks to your site, lead generation etc. This focuses your budget on the successful metrics.
Perform Keyword Research
Identify keywords and phrases your audience uses to search for solutions you offer. Bidding on these search terms can lower ad costs.
Leverage Accurate Targeting
Combine demographic, interest, job role and other filters to zero in on your ideal customer profiles. Avoid overly broad targeting.
Split Test Ad Variations
Run A/B tests on ad copy, audience segments, landing pages etc. Double down on what delivers results cost-effectively.
Analyze and Optimize
Check campaign analytics regularly. Stop ads not performing well. Keep improving targeting and messaging based on insights.
Retarget Website Visitors
Serve ads to people who previously visited your website. They are pre-qualified leads so cost per conversion decreases.
Automate Bidding Strategy
Use automated bid strategies that optimize bids to achieve conversion goals while hitting target CPA.
Conclusion
Average LinkedIn ad costs range from $5-$12 per click and $10-$30 per thousand impressions. However, savvy targeting and ongoing optimization allows you to keep ad spend in check and maximize ROI.
With 722 million users, LinkedIn advertising offers a unique opportunity to engage professionals and businesses. Defining your goals, testing different approaches, and tracking the right metrics are key to extract the most value.
