LinkedIn advertising, also known as LinkedIn Sponsored Content, allows businesses to promote their content to LinkedIn users based on targeting criteria like job title, company, industry, interests, location, and more. Advertisers pay for their ads on a cost-per-thousand impressions (CPM) basis, meaning they are charged each time their ad is displayed 1,000 times. The average CPM on LinkedIn can vary significantly based on factors like targeting, ad format, bidding strategy, and more. In this article, we’ll take an in-depth look at average LinkedIn CPM rates and the key factors that influence them.
What is Average CPM on LinkedIn?
According to LinkedIn, the average CPM across all advertising on their platform is $10. However, this can vary greatly based on multiple factors. Some key average LinkedIn CPM benchmarks to be aware of:
- Average CPM by industry vertical: Ranges from $8 – $12
- Average CPM by seniority level: Entry-level roles ($5-$7 CPM), Manager roles ($10-$15 CPM), Director+ roles ($15-$25+ CPM)
- Average CPM by ad format: Sponsored content ($8-$12 CPM), Sponsored InMail ($10-$20+ CPM), Text ads ($2-$7 CPM)
- Average CPM by device: Mobile ($6-$10 CPM), Desktop ($10-$15+ CPM)
So in summary, while the average overall is around $10 CPM, typical CPMs may range from as low as $2 up to $25+ depending on targeting and ad format.
What Impacts Average CPM on LinkedIn?
There are several key factors that influence the average cost per thousand impressions on LinkedIn. The main elements are:
Targeting
More granular targeting generally leads to higher CPMs. For example, targeting by seniority, job function, company size, etc. allows you to hone in on your ideal audience, but decreases the overall reach and scales back the auction – leading to higher CPMs. Broader targeting based on parameters like location, age, gender, results in lower CPMs but less relevant audiences.
Ad Format
CPMs vary significantly by LinkedIn ad format. For example, Sponsored InMail has the highest CPM since it appears prominently in the user’s inbox. Sponsored Content also commands higher CPMs due to its native advertising format seamlessly blended into the LinkedIn feed. Text ads have lower CPMs but also lower visibility and engagement.
Bidding Strategy
You can bid manually on a CPM basis or utilize LinkedIn’s automated bidding called “Campaign Manager”. Manual bidding gives you maximum control but requires close optimization. Campaign Manager often drives down CPMs over time by automatically optimizing bids but gives up some control.
Audience Engagement
Higher performing ads with better engagement metrics like CTR, video views, conversions etc. signal relevancy to LinkedIn, leading to lower CPMs over time. Low performing ads signal irrelevance and push CPMs higher.
Competition
CPMs for in-demand audiences see more competition from advertisers. More demand drives up pricing. Less competitive targeting options see lower CPMs.
Time of Year
CPMs fluctuate seasonally with peaks around the holidays and lower points during summer months when engagement declines. January/February sees a surge in demand as companies reload budgets.
CPM Benchmarks by LinkedIn Ad Objective
The advertising objective you select also impacts average CPM benchmarks. Here are typical ranges:
| Objective | Typical CPM Range |
|---|---|
| Brand Awareness | $8 – $15 |
| Lead Generation | $15 – $30 |
| Website Visits | $10 – $20 |
| Video Views | $10 – $25 |
Lead generation and video views generally have higher CPMs due to the increased value of those objectives. Brand awareness and website visits are more broadly targeted driving down costs.
How LinkedIn’s Auction & Pricing Works
To understand how average CPMs are determined, it’s important to understand LinkedIn’s advertising auction and pricing model:
- Advertisers enter the maximum CPM bid they’re willing to pay
- When ad space becomes available, LinkedIn runs an auction between advertisers
- The highest bidder wins the auction and pays just above the next highest bidder’s max CPM bid
- Winning the auction builds the advertiser’s Share of Voice (SOV)
- Higher SOV positions an advertiser to win more auctions and pay lower CPMs
This model incentivizes setting higher max CPM bids to increase your SOV and decrease your average CPM over time.
How to Calculate LinkedIn CPM
Figuring out your actual average CPM is straightforward using this formula:
CPM = Ad Spend / Impressions x 1000
For example, if you spent $1,000 and got 100,000 impressions your CPM would be:
$1,000 / 100,000 x 1000 = $10 CPM
Monitoring your CPMs frequently and how they change over time is key to optimizing a LinkedIn ad program.
Tips to Lower Your LinkedIn CPM
Here are some top tactics to help reduce your average CPM on LinkedIn:
- Broaden your targeting and expand potential reach
- Test different ad formats – sponsored content & text ads offer lower CPMs
- Ensure high ad quality and relevance for your audience
- Actively monitor and optimize for engagement metrics
- Use automated bidding strategies like Campaign Manager
- Set higher max CPM bids to win more auctions and build SOV
- Adjust tactics seasonally based on historical CPM trends
With the right strategy tailored to your goals, it’s possible to decrease LinkedIn CPM over time and maximize advertising ROI.
Conclusion
While the average CPM on LinkedIn is around $10, there are lots of factors that cause rates to fluctuate significantly around that point. By leveraging targeting, choosing the right ad formats, optimizing for engagement, and actively managing bids, marketers can aim to control CPMs and spend budgets efficiently. Monitoring performance metrics closely and being flexible to adjust strategies is key to success.