How Much Do LinkedIn Ads Really Cost?
The short answer to the question, "How much do LinkedIn ads really cost?" is around $2 to $5 per click.
And while that seems quite expensive, LinkedIn ads don't have to cost you $4 to $5; there are some cost-effective ways to keep the price of your cost-per-click down.
So, are LinkedIn Ads Worth It?
The best way to answer this question is with another question.
That means for every lead you get on Facebook; you would get almost THREE LEADS ON LINKEDIN!
Sorry for the caps, but that's some exciting stuff!
While B2B businesses would benefit the most from LinkedIn, B2Cs can reap the benefits of LinkedIn, mainly if your product or service can be targeted to everyday business professionals.
- Holiday Inn
- Kate Spade New York
Do you see a trend?
You don't need to sell to businesses to achieve marketing success on LinkedIn, but you do need to appeal to business professionals.
How Does Advertising Work on LinkedIn?
To get an accurate understanding of how much your LinkedIn advertising campaign might cost, you first need to understand how LinkedIn advertising works. There are four types of advertisements on LinkedIn.
Sponsored Content. Sponsored content is the most common type of advertisement seen on LinkedIn. These appear on users' news feeds and look like standard LinkedIn posts. There are three types of sponsored content. Single image ads are advertisements with a single image and accompanying text. Video ads that replace the static image in the single image ad with a video. And carousel ads that allow users to swipe through a series of images.
Sponsored InMail. Sponsored InMail allows advertisers the ability to send advertisements as direct messages to specified prospects. Sponsored InMail is ideal for advertisers or businesses who want to:
- Raise awareness for an event or webinar.
- Promote downloads of an electronic item.
- Connect with potential clients that would be interested in your product or service
Text Ads. These ads appear in the right column when using LinkedIn on your desktop or laptop computer. There are four format options for text ads. Text ads are helpful because they allow for strict control on how much our ads will cost you. This is because there is no commitment to run these ads; you pay per click or impression.
Dynamic Ads. LinkedIn offers the ability to create dynamic ads that include a LinkedIn user's profile data. These ads allow marketers to advertise to their ideal user in a direct personalized way.
What Factors Determine the Cost of Advertising on LinkedIn?
So you understand the usefulness of advertising on LinkedIn. You might even know which type of advertising best suits your marketing plan, but what factors will determine the actual cost you pay for LinkedIn ads?
Luckily there's only three:
- Target Audience. The type of target audience you and your competition are vying for is a huge determinant of the price you'll have to pay. The more high-demand the audience or industry, the more you pay. However, the number of competitors and competition is only one aspect of this factor. Another critical item to keep in mind is the audience's perceived value of your product.
- Bid Amount. While you will never pay more than your bid amount, you will have to pay some (and in many cases, most) of it. In a LinkedIn advertising auction, the winner is required to pay one cent more than the next highest bid, so keep this in mind when setting bids.
- Ad Relevance. Your ad relevance score may be the most influential factor when it comes to LinkedIn advertising costs. Achieving a high score means your expenses will decrease. Like other advertising platforms, LinkedIn prioritizes highly relevant advertisements because they want to provide users with the most engaging and personalized experience.
How Do You Keep LinkedIn Costs Down?
Cost on advertising spend for LinkedIn is relatively straight-forward and controlled in three ways:
1. Setting a total budget
Setting a total budget for an ad campaign is the first step to controlling the overall cost. The minimum you're allowed to spend on an advertising campaign is $10. Once you reach your budget limit, the campaign will end.
2. Setting a daily budget
Like the whole budget campaign, the minimum budget is $10; however, this is a daily budget, and the campaign will renew every day.
3. Setting appropriate bids
As previously discussed, setting a bid means determining the maximum price you are willing to spend for an impression, click, or conversion. When placing individual bids, the minimum bid amount allowed is $2 for every click. There are three approaches when you set bids on LinkedIn Ads.
- Cost-per-click (CPC). This means you pay every time a user clicks on your ad. This option is great for businesses that want a cost-effective way to drive traffic offsite or generate leads.
- Cost-per-impression (CPM). When you choose the CPM bidding option, you pay every time your ad generates 1000 impressions. An impression isn't the same as a click. An impression is when someone "views your ad," generally meaning it was on screen for several seconds. While this isn't effective for brands looking for conversions, it's a great option for advertisers who want to get views and increase brand awareness.
- Cost-per-send (CPS). The CPS option is only applicable to advertisers who are using the Sponsored InMail advertising method. With cost-per-send, you set the maximum bid you are willing to pay for each user receiving your Sponsored InMail advertisement. As previously mentioned, this option is best for advertisers targeting specific users, mainly for a product or service.
How Does LinkedIn Compare with Other Platforms?
Unfortunately, LinkedIn advertising costs more than other social media platforms like Facebook and Google; a 2021 study showed that the average CPC is $0.51 for Facebook advertising, $1-$2 for Google advertising, and $5.61 for LinkedIn.
And that's an astonishing 5 to 10 times more expensive; this study also showed that "LinkedIn clicks are 500% more likely to generate quality conversions."
I'll repeat that and make it more dramatic.
LinkedIn is 500% percent more likely to generate quality conversions!
LinkedIn is a growing advertising platform that allows you to advertise to your ideal audience before showing intent. That means your business will get exposed to entirely new markets and consumers.
So, yes, LinkedIn costs more, but it's also highly worth the investment.
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