As a business looking to expand your reach on LinkedIn, determining the right budget can be tricky. With so many options for advertising and engagement, how do you know where to allocate your spending? In this comprehensive guide, we’ll walk through the key factors to consider when calculating your LinkedIn budget.
Determine Your Goals
The very first thing you need to do is identify your goals and desired outcomes. Are you looking to generate leads, build brand awareness, or drive traffic to your site? Different goals will require different budget allocations. Set specific metrics you want to achieve, like number of followers gained, conversion rate, or sales revenue driven.
Lead Generation Goals
If lead gen is your main goal, focus budget on:
- Sponsored content to engage your target audience
- Lead gen forms to capture contact info
- InMail to contact key prospects
Brand Awareness Goals
To build brand visibility, prioritize:
- Sponsored content to organically reach a wider audience
- Display ads to increase impressions
- Creative assets like videos that people will engage with and share
Website Traffic Goals
If driving website traffic is your goal, spend on:
- Sponsored content and display ads with strong calls-to-action
- Messages and creative content that entices clicks
- Analytics tracking to optimize performance
Research Your Audience
Thoroughly researching your target audience is key for any LinkedIn marketing plan. Look at audience demographics like job title, industry, company size, location. Analyze what content and messaging resonates most with them. This will allow you to determine the types of LinkedIn advertising and content that will be most effective for your goals.
Look at your ideal customer profile:
- What job titles and seniority levels do they have?
- What industries, company sizes, and geographic locations?
- What interests, groups, and influencers do they follow?
Segmenting your audience will allow precise targeting.
Analyze the type of content your audience engages with most:
- What content formats – articles, videos, etc.?
- What topics, keywords, and thought leadership content?
- Who are the most influential voices and creators?
This helps craft content that resonates.
Determine what messaging and value prop hooks your audience:
- What pain points and challenges do they have?
- How can your product or service address their needs?
- What keywords and language do they use?
Shape messaging that speaks directly to them.
Set Your Budget Range
With your goals clarified and audience researched, you can determine an appropriate budget range. Look at benchmarks for your industry and competitors as a starting point. Here are typical LinkedIn marketing budget ranges:
|$250 – $1,000
|$1,000 – $5,000
|$5,000 – $15,000+
Of course, your budget depends on your specific business needs and capacity. The benchmarks provide a good starting point for different business sizes.
When determining your budget, it’s often wise to start on the lower end of benchmarks and scale up as you test and optimize your LinkedIn strategy. You can incrementally increase spend as you:
- Refine your audience targeting
- Improve your ad creative and messaging
- Identify the campaigns with best ROI
Starting small allows you to cost-effectively learn what works well.
Consider Cost Per Lead/Conversion
Another budget technique is setting target cost per lead (CPL) or cost per conversion, then working backwards. For example:
- You determine the lifetime value of a customer is $2,000
- So your CPL goal is $100
- With a $5,000 budget, you can generate 50 leads
This helps you numerically tie spend to target results.
Allocate Budget Across Tactics
With your total budget set, now allocate spending across the main LinkedIn advertising and engagement tactics. Here are typical budget allocation percentages:
|Budget % Range
Sponsored content typically deserves the biggest allocation, as organic content engagement is very powerful on LinkedIn. Sponsored InMail can also be very effective for more targeted outreach.
Balance Paid and Organic
It’s important to complement your paid tactics with organic content for balanced impact. Allocate budget for organic efforts like:
- Company Page management
- Employee advocacy and thought leadership
- Building followers and engagement
- Group participation
This provides a comprehensive approach.
Test and Optimize
Continuously test and refine your budget allocations based on performance data. Identify winning campaigns and double down on those with scaled budgets. Reduce spend on poorer performing tactics and reallocate towards what works. This agile approach allows you to optimize budget efficiency over time.
Measure Results and ROI
The final critical step is tightly measuring performance of your LinkedIn activities to understand ROI and inform future budget decisions. Here are key metrics to track:
- Impressions and Reach
- Engagement Rate
- Clicks and Conversions
- Cost Per Lead/Conversion
- Sales Revenue Impact
Tools like LinkedIn’s advertising analytics and third-party software provide robust reporting to analyze results.
Impressions and Reach
Impressions show how many times your content is displayed. Reach reveals number of unique accounts that see your content. This demonstrates awareness impact.
Engagement rate is percentage of impressions that result in engagement like clicks, reactions, comments, shares. Higher engagement rate means your content is resonating.
Clicks and Conversions
These metrics show interest and leads generated. Compare costs per click and conversion to inform budget efficiency.
Tie revenue data back to your LinkedIn activities to analyze true ROI. Sales reps can track LinkedIn-generated leads and closed deals. CRM and marketing automation integrate powerfully with LinkedIn.
With performance data insights, you can continuously optimize your LinkedIn budget allocations. Boost spend on high performing content, audiences, and tactics. Reduce budget for poorer performers and reallocate those dollars more effectively. This data-driven optimization will improve your LinkedIn ROI over time.
Look at results by audience segment and targeting method. Double down on the segments yielding best engagement, conversions, and sales impact.
Analyze engagement and conversion rates by specific content pieces and formats. Shift more budget towards your best performing content assets.
Evolve Campaign Mix
Review performance by campaign channel like InMail vs. sponsored content. Shift budget towards better performing initiatives based on your goals.
Calculating your ideal LinkedIn budget requires research, planning, and constant optimization based on performance data. Start by setting S.M.A.R.T. goals, thoroughly analyzing your audience, determining an initial budget range, allocating across strategies, closely tracking KPIs, and then continuously improving based on insights. This process allows you to make the most of your LinkedIn marketing dollars and fuel business growth.