Let's admit it. LinkedIn isn't the biggest social media platform out there. Still, the good news is it has the highest visitor-to-lead conversion rate than any other social channel.
At 2.74% conversion rate compared to Facebook at 0.77% and Twitter at 0.69%, you have three times more chance of acquiring new clients on LinkedIn than the other more significant social media sites.
LinkedIn Ads increase your visibility to other industry professionals. Using the LinkedIn Advertising targeting features ensure that you will reach your target group members efficiently. Doing so will then help you achieve the following:
- Raise brand awareness.
- Strengthen relationships.
- Convert more leads.
The ads are sold by auction when advertising on LinkedIn. You will bid against other advertisers who want to reach the same target audience. The advertiser with the highest bid usually gets the ad placement.
But before you advertise on LinkedIn, it's essential to know the real digits behind advertising on the platform.
The Numbers Behind LinkedIn Ads
Remember that LinkedIn Ads offer a higher conversion rate, even if the click-through rate or cost per click is better on Google Ads, Facebook Ads, or Twitter Ads.
Check out Table #1:
Cost Per Click
Table #2 shows how much lead costs on each social media platform, given a $500 budget:
Total Clicks ($500/CPC)
Conversions (Clicks x CVR)
Cost Per Lead ($500/conversions)
Here are a few critical takeaways from Table #2:
- LinkedIn Ads provide the second-best conversion rate even if its numbers looked weak initially.
- Facebook Ads is the front runner because of the average cost per click and a high conversion rate.
- Twitter Ads' low conversion rate makes it the most expensive by some margin.
- Google Ads show a so-so result because of its comparably weak conversion rate.
Those numbers give you an idea of how the different platforms compare, but keep in mind that these facts can change.
All you need to know is the value each lead brings so you can have an idea of your investment return. Suppose the lifetime value (LV) per LinkedIn lead is equal to $41 or more. In that case, it's safe to say that you have a positive investment return.
You should target at least a 4:1 ratio, meaning if each LinkedIn lead brings you at least $400, your ROI is very healthy.
How To Spend Your LinkedIn Ads Budget Intelligently
Many digital advertisers have doubts about how much they should spend on LinkedIn Advertising, even if it can increase sales.
According to LinkedIn,
The amount you pay to advertise on LinkedIn is up to you. You can get started with any budget and stop your ads at any time. LinkedIn ads are sold through an auction. When you run ads, you compete with other advertisers who want to reach a similar target audience.
While that statement is incredible in every way, defining the right LinkedIn Ads budget can be confusing and challenging, especially for first-timers.
You don't want to use your entire advertising budget on your first LinkedIn Ads campaign, even if spending more will help you reach more people. You also don't want your LinkedIn Ads budget to be so small that it doesn't drive results.
The best thing to do is to spend what you are comfortable spending.
Set a budget that matches the needs and circumstances of your business. The minimum amount for LinkedIn Ads is $10.00 per day. Make that your ads budget if that's all you can afford. As you gain traction, you can always increase the ad amount.
With that said, here are ways on how to spend your Linkedin Ads budget wisely:
1. Set A Total Budget
Set a Total Budget if you want fast results. The Total Budget is the maximum amount that will be spent on your campaign.
Here are essential things to remember about setting a Total Budget:
- LinkedIn display ads as often as possible until your Total Budget is reached.
- To pace and deliver your campaign through the end date, set both a daily budget and total budget.
You can choose Total Budget for LinkedIn Ad types like a dynamic ad, spotlight ad, or jobs ad with automated pacing options.
Dynamic ad campaigns with Total Budget selected will spend the budget over the campaign's schedule based on the chosen pacing option.
2. Set A Daily Budget
The Daily Budget is the maximum amount advertisers can spend per day. The minimum daily budget on LinkedIn is $10. Still, it may be higher if the minimum bid for an audience is above $10.
Multiply your bid by the clicks or impressions you want to get per day to get a better understanding of your daily budget. If you wish to get 15 clicks per day but can't spend more than $5 per click, you need to set your daily budget to $75 per day.
3. Set A Bid
There are three types of bidding on LinkedIn - Automated Bid, Target CPM Bid, and Maximum CPM Bid.
If your primary goal is to get the most impressions for your entire budget, select Automated Bid.
Automated Bid utilizes machine learning to bid for you and deliver your entire budget automatically. The goal is to produce the most significant results for your LinkedIn Ads campaign while using your entire budget with the most efficiency.
LinkedIn Ads campaigns using the automated bid type may be optimized for impressions, clicks, or conversions, depending on the chosen objective. Automated Bid campaigns are charged by impressions (CPM) and don't have a selection to set a bid cap.
Target CPM Bid
If your primary goal is to maintain a consistent cost per result, select Target CPM Bid.
Target CPM Bid allows you to set a target cost. LinkedIn will automatically bid and optimize the campaign to deliver the most critical results while staying in the range of your target cost.
Target CPM Bid is designed to keep your cost per key result within the bid amount you specify while getting the most results. This bid type is perfect for those who have a target ROI because it provides cost per key result consistency.
The daily average cost of your LinkedIn Ads campaign will meet or be below the target cost set for your campaign. The actual cost will never pass 30% above the target cost daily.
Maximum CPM Bid
If your primary goal is to maximize control over your bids in auctions, select Maximum CPM Bid.
Maximum CPM Bid is a manual bid type that lets you specify the maximum amount you're willing to bid for a critical result. It provides you the most control over your bid but may not produce the same results as other bid options.
4. A/B Test
Before spending all your LinkedIn Ad budget on one campaign, you first want to find the types of ads and text language that speak most to your audience to see which ads will give you the most ROI.
It's best if you use A/B testing by creating multiple LinkedIn Ad variations. You can run them all while identifying the top-performing ads.
LinkedIn makes running A/B testing very easy with multiple variations. When you create different LinkedIn Ads to test, you should keep a close eye on critical metrics to analyze how successful each variation is.
Once you find the top-performing ad, pause the ad variations that aren't performing.
While A/B testing is not directly related to setting a budget for your campaign, it ensures that you are spending your LinkedIn Ads budget wisely.
5. Track Your LinkedIn Ads Performance
Keep an eye on your current campaigns to see how your ads resonate with new audiences and generate new ones. Making adjustments to your campaigns based on the metrics will help you make sound decisions that will increase your results over time.
And that's how to spend your LinkedIn Ads budget rationally!
Check out the recommended resources section below to learn more about LinkedIn Ads. You can also TALK TO US if you need a one-on-one session about this topic.
Recommended LinkedIn Ads Resources
How to Use LinkedIn Ads to Grow Your Business
The Complete LinkedIn Advertising Cheatsheet
How Much Do LinkedIn Ads Cost? A LinkedIn Ad Pricing Guide
So what do you think about this article? Are you ready to spend your LinkedIn Ads budget wisely?
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Header image courtesy of Jumpstory.