Determining the right budget for LinkedIn ads can be tricky. LinkedIn advertising allows businesses to target a professional audience, but costs can add up quickly. Setting a LinkedIn ad budget requires researching audience size, bid prices, and campaign duration. Additionally, tracking ROI and optimizing for conversions are key to getting the most out of your spend.
What are the costs associated with LinkedIn ads?
There are a few core components that make up the cost of LinkedIn ads:
- CPM (cost per thousand impressions) – The amount you pay for every 1,000 times your ad appears on someone’s screen.
- CPC (cost per click) – The amount you pay each time someone clicks your ad.
- Audience size – The number of people matching your target audience parameters. More potential reach equals higher costs.
- Bid price – The maximum you’re willing to pay for each click or thousand impressions. LinkedIn runs an auction which determines actual costs.
Together, these factors interact to determine your overall ad spend. Displaying your ad to more professionals (audience size) at higher bid prices leads to higher costs. The quality of your ad creative also impacts costs – compelling ads tend to get more clicks at lower CPCs.
How do you estimate the audience size and cost per click?
LinkedIn provides an audience insight tool to help estimate potential reach. Here are the steps to use it:
- Enter your target parameters like location, company size, job title, etc.
- LinkedIn will show the estimated number of people matching those criteria.
- Take note of the suggested bid range. The lower end is a good starting point for your CPC bid.
It’s wise to start conservative with smaller audience size and lower CPC bid prices. LinkedIn ads make it easy to adjust targeting and bids to hone in on what works over time.
What campaign duration should you set?
Campaign duration depends on your goals, but most experts recommend starting with a shorter timeframe:
- Brand awareness campaigns – Run for at least one month to increase visibility.
- Lead generation campaigns – Two to four weeks to gather quality leads before optimizing.
- Website traffic campaigns – One to two weeks to drive traffic and monitor engagement metrics.
Longer campaign durations allow your ad spend to accumulate over time for greater reach. But a phased approach lets you evaluate performance and tweak ads at regular intervals for better results.
How much budget is advisable?
As a general rule, LinkedIn recommends a minimum monthly budget of $25 per campaign. Beyond that, setting an ideal budget depends on your business model and objectives. Here are typical budget ranges:
| Monthly Budget | Best For |
|---|---|
| $50 – $300 | Small businesses and early testing |
| $300 – $1,000 | Lead generation for mid-size companies |
| $1,000+ | Brand awareness and thought leadership for enterprises |
Aim to start in the low to middle end of budgets to gauge conversion potential. With experience, increased budgets can improve reach and visibility over time.
Tips for setting an initial LinkedIn ad budget
- Assess marketing objectives and KPIs to drive desired outcomes.
- Use audience insight tool to estimate potential reach.
- Factor in recommended bid range and campaign duration.
- Consider your industry norms and competitors’ spend levels.
- Start on the conservative side to prove ROI before increasing.
How do you track LinkedIn ad performance?
Monitoring key metrics helps optimize ads and determine effective budget allocation. Here are top indicators to track:
Engagement metrics
- Impressions – Number of times ads are displayed. Aim for relevant impressions vs pure volume.
- Clicks – Clicks drive visitors to your site or landing pages. Watch click-through rate (CTR).
- Click costs (CPC) – Lower is better as long as it doesn’t decrease conversions.
Conversion metrics
- Leads – Quality leads are the real measure of campaign success.
- Registrations, purchases, etc. – Key conversions based on campaign goals.
- Bounce rates – High bounce rates may indicate poor landing pages.
Financial metrics
- Cost per lead – Compare to target customer acquisition costs.
- ROI – Overall return on ad spend indicates profitability.
- Margins per conversion – The sales contribution from each conversion.
Tools like Google Analytics and LinkedIn’s advertising dashboard make it easy to track these KPIs. Review metrics frequently and optimize underperforming ads.
How can you improve LinkedIn ad performance?
Use these tips to refine ads and lower costs over time:
- A/B test ad variations – Test different creatives, offers and messaging.
- Adjust targeting – Narrow options that drive conversions, lower irrelevant impressions.
- Set bid caps – Decrease bids slowly while monitoring conversion volume.
- Analyze landing pages – Improve pages with high bounce rates.
- Remarket engaged visitors – Bring back visitors who clicked but didn’t convert.
Continual optimization helps improve conversion rates. You can then maintain or increase budgets without a proportional increase in spending.
Conclusion
Determining the ideal LinkedIn ad budget requires research into audience size, bid prices, campaign duration and conversion metrics. Start conservatively and track KPIs to optimize performance before increasing spend. Active management and testing helps maximize LinkedIn ad ROI within your budget goals.
