TL;DR: LinkedIn ads cost more or less based on clicks, views, or messages. You need to budget well to get good results without spending too much. Skip to the summary.
LinkedIn advertising isn’t cheap. Knowing the costs beforehand helps you plan ahead and avoid a surprise bill.
Let’s dig into:
- LinkedIn’s ad pricing models
- What billable events are
- Factors that influence the cost of LinkedIn advertising
- Minimum budgets needed for LinkedIn ads
- How to manage your ad spend
LinkedIn ad pricing models
LinkedIn offers three main ad pricing models:
- CPC (Cost Per Click)
- CPM (Cost Per Thousand Impressions)
- CPS (Cost Per Send)
With CPC, advertisers pay each time someone clicks on their ad.
This pricing model is good for direct response campaigns where the goal is to drive traffic to a website or generate leads.
CPM is based on the number of times the ad is shown to 1,000 people.
Advertisers pay for every 1,000 impressions of their ad. This pricing model is best for brand awareness campaigns.
CPS is specifically for Sponsored InMail ads, where advertisers pay for each message sent.
This suits personalized messaging campaigns. The drawback is potentially high costs for each message sent.
These pricing models are related to what are called billable events.
What are billable events on LinkedIn?
Billable events are specific actions that can happen during a campaign. Each event corresponds to a different campaign objective.
Billable events can include things like clicks, website visits, or video views.
For example, if your campaign objective is to increase website visits, the billable event would be when someone clicks on your ad and visits your website.
You will be charged based on the number of times this event happens.
For video views, the billable event would be when someone watches your video ad.
Video views are defined as 2+ seconds continuous view at 50% or more on screen.
Factors influencing LinkedIn advertising costs
Different factors affect how much you pay to reach an audience through LinkedIn ads.
Let’s look at six of these factors:
- Campaign objective
- Location
- Target audience
- Budget and bid options
- Ad format and placement
- Ad relevance score
Campaign objective
Campaign objectives on LinkedIn include awareness, consideration, and conversions.
For awareness, the pricing model is based on impressions or unique reach.
This stage of the marketing funnel aims to increase brand visibility to a larger audience.
You’ll typically pay a low to medium cost for this objective.
Consideration objectives may include website visits, engagement (likes, comments, shares), video views, and messaging.
This stage focuses on driving interest in the brand.
The pricing model is based on clicks, impressions, views, or message opens.
You’ll pay medium to high costs for this objective.
Conversions objectives include website conversions, job applicants, or lead generation.
The pricing model is based on leads or tracked conversions. You’ll need to set up LinkedIn conversion tracking first.
This stage is focused on driving actions from the audience, such as making a purchase, applying for a job, or filling out a form.
Results typically cost the highest for this objective.
Location
You can tailor your advertising strategy based on the region you’re targeting.
The average cost per click or cost per mille for LinkedIn advertising varies by country (mille means “thousand” in French).
Mature markets generally have higher costs than emerging markets.
For example, the average CPC in the United States is higher than in India or Brazil.
This is because mature markets tend to have more competition and higher demand for ads.
Target audience
On LinkedIn, you can target your audience based on industry, company size, job title, and member skills.
There are about 100 different options you can use to narrow down your audience and make sure you’re reaching the right people.
It costs more to advertise to senior decision makers on LinkedIn compared to entry and mid-level titles.
This is due to the high demand and competition for decision makers, which drives up the cost.
Budget and bid options
When you create an ad on LinkedIn, you can decide how much you’re willing to pay and how you want to get charged.
You can set a daily budget, which is the most you want to spend each day, or a total budget, which is the most you want to spend on the whole campaign.
You can choose to get charged per click, impression, video view, Message send, Message open, lead, or website conversion.
Try to choose a bid that’s high enough for your ad to get shown but not so high that you spend too much money.
LinkedIn will suggest a bid range based on what others are paying. You can change your bid and budget as you go, based on how well your ad is doing.
Ad format and placement
The type of ad format and where it is placed within LinkedIn can also affect the cost.
Sponsored Content, Sponsored InMail, and Text Ads all have different price points.
Lead gen forms and Messages are among the highest cost ads but can earn higher quality leads.
Text ads are cheap and delivered with a high frequency but have a low clickthrough rate.
The rest of the ads cost somewhere between.
Ad relevance score
56% of your campaign’s performance is down to the creative.
Showing your best ad to the right people means they’re more likely to engage with it, which can help lower your costs.
When LinkedIn scores your ad relevance, they look at metrics like click-through rate (how many people click on your ad), comments, likes, and shares.
If your ad is getting a lot of engagement, it’s a good sign it’s relevant to your audience.
What is the minimum budget for LinkedIn advertising costs?
As of writing, the minimum daily budget for LinkedIn ads is:
- £8/day in GBP
- €10/day in EUR
- $10 per day in USD
- R80 per day in ZAR
Your monthly advertising budget should be at least 90 times the daily cost.
For example, if you’re running ads from a USD ad account, the minimum budget per campaign will be $10/day ($300/mo).
This means your budget should be at least $900/mo ($10/day x 90).
This allows you to run at least three different campaign layers at the same time for greater impact and testing.
For example, you could run:
- An Engagement campaign to a cold audience
- A Traffic campaign sending people to your website
- A Video View campaign to get website visitors to take action
This is just an example — your own LinkedIn ads plan may look different.
Get in touch if you need help with this.
Now, can you get away with spending the bare minimum? Sure, but it’ll take longer to make an impact because:
- Your competitors will outspend you.
- You won’t have enough room to test out new campaigns, creative assets, or audiences.
If you can spend the bare minimum, so can your competitors. Going the extra mile gives you an edge.
Quick note: Your CPMs may be high in the first week of your campaign, but should stabilize once the learning phase is over.
The learning phase for LinkedIn ad campaigns is about 7 days or 50 billable events.
How to manage your ad spend on LinkedIn
The goal isn’t just to spend less, but to spend smarter. This ensures every cent contributes to your bottom line.
Let’s look at three ways to manage your ad spend on LinkedIn.
Use campaign group budgets, lifetime budgets, and daily budgets
Campaign group budgets help you control and optimize spending across several campaigns.
This is useful if you’re running campaigns for different product lines or market segments, or with different objectives.
For example, you can have different campaign groups as follows:
- Campaign Group A for Awareness, with a $10,000 limit
- Campaign Group B for Engagement, with a $9,000 limit
- Campaign Group C for Conversions, with an $8,000 limit
You can then create different campaigns within each campaign group, depending on your goals.
For example, you could have within Campaign Group B the following engagement campaigns:
- Campaign B1 targeting CxOs in the US
- Campaign B2 targeting Senior Managers in the US
- Campaign B3 targeting a CxOs in the UK
Next, you can set a total budget for each campaign, based on how long it will run.
Start by setting a lifetime budget, which is the total amount you are willing to spend on the campaign.
Then, decide on a daily budget, which is the amount you are comfortable spending on a daily basis.
When calculated, the daily and lifetime budgets should not exceed the campaign group’s budget, if one exists.
LinkedIn will throw an error in this case, and prompt you to either update your campaign group budget or lower your campaign budget.
Bid competitively
Look at the bid suggestion in LinkedIn Campaign Manager and set your highest bid based on that.
Consider the bidding options available, such as cost per click (CPC) or cost per impression (CPM).
For each bidding option, you can set a specific bid amount, which is the maximum amount you are willing to pay per click or impression.
Your Bidding strategy is typically set to ‘Maximum delivery’ by default.
If your ads aren’t getting enough views or clicks, you can try manually setting more competitive bids.
If the goal is to drive website traffic, you may want to focus on CPC bidding (clicks).
If instead you want to increase brand awareness, you might prefer CPM bidding (impressions).
To determine the best approach for your campaign, consider your business objectives and overall budget.
Note that you may have to raise your bid in certain cases, like when you’re targeting a more profitable audience segment or need to win against the competition at all costs.
Don’t just set and forget
Keep an eye on clicks, ad spend, and results (such as page views, website conversions, and more).
It’s a good idea to check LinkedIn Campaign Manager every few days to monitor your campaigns.
If things aren’t going well, adjust your ads, budget, or targeting to try to improve the results.
If your CPMs are high, adjust your targeting. You’re either targeting the wrong audience, or an overly-narrow one.
Try to broaden or adjust your audience targeting a bit and see if that helps.
If your CTR is too low, your ads are likely the issue. Test different ad formats to see what works best for you.
Ad fatigue is one of the most common causes of poor performing campaigns. Add new ads regularly.
Let each ad gain at least 1,000 impressions before deciding whether to turn it off or keep it running.
If you’re not getting enough Message opens, your copy is likely the issue.
Test different headlines and openers to see what works best for your audience.
If you’re not getting enough leads or website traffic, check your offer and call to action (CTA).
An offer can be a free audit, free resource (like an e-book), an offer to book a demo, or one to get a quote.
Your call to action is what you want the prospect to do after seeing your ad.
This could be to ‘Learn more,’ ‘Get a quote,’ ‘Register now’ (for events), and more.
A bad offer kills your whole campaign and should be changed.
A good offer with the wrong CTA may yield poor results.
For example, if you sell a $10k/yr product, a “Get a quote” CTA is likely too hot for a cold audience.
Drop the temperature to “Learn more” and see if that improves your CTR.
Summary
LinkedIn ads vary based on whether you’re paying for clicks, views, or messages sent.
Costs go up based on how specific your audience is, where they are, and what action you want them to take.
You’ll need to spend at least $10 a day (for USD ad accounts), but spending more helps test different ads and get better results.
To manage costs, set clear budgets, bid wisely, and keep checking your ad performance.
Adjust as needed to make sure you’re spending money in the best way.
Schedule your free consultation
I help companies make the most of their LinkedIn advertising budget and avoid wastage.
Learn more about my LinkedIn ads service.
FAQs about LinkedIn advertising costs
How does audience targeting affect LinkedIn ad costs?
The more specific your audience targeting, the higher the cost might be due to increased competition for a more defined group.
However, precise targeting can lead to higher engagement rates and better ROI.
What time of year is LinkedIn advertising most expensive?
Costs can vary throughout the year, with higher costs often seen in Q4 due to increased advertising demand.
Planning your budget to accommodate seasonal fluctuations can be beneficial.
Can I use automatic bidding to reduce LinkedIn advertising costs?
Automatic bidding can help optimize your ad spend by allowing LinkedIn to adjust your bids for the best possible results within your budget. It can be effective but doesn’t guarantee lower costs.
How does ad format choice impact cost on LinkedIn?
Different ad formats come with different costs.
Sponsored Content and Message Ads tend to be more expensive but can offer higher engagement rates.
Text Ads are less costly but might result in lower engagement.
Is it possible to negotiate rates for LinkedIn ads?
LinkedIn’s ad rates are not negotiable. Prices are set based on the auction system and vary depending on competition and your bid strategy.
What impact does ad content quality have on LinkedIn ad costs?
High-quality, engaging ad content can improve your ad relevance score, leading to lower costs per click (CPC) or per impression (CPM) due to higher engagement rates.
How can I minimize LinkedIn ad costs for a small budget?
To minimize costs, focus on narrow, highly targeted campaigns, choose cost-effective ad formats, and use manual bidding to control your spending.
Testing and optimizing your ads for performance can also help manage costs effectively.
Do LinkedIn ads have a higher ROI compared to other platforms?
ROI from LinkedIn ads can be higher for B2B marketers due to the platform’s professional audience and advanced targeting options.
However, ROI varies based on campaign strategy, audience targeting, and ad execution.
What’s the minimum bid for LinkedIn ads?
The minimum bid for LinkedIn ads can vary depending on the ad format and competition for your targeted audience.
LinkedIn provides a suggested bid range based on current competition, ensuring your ad remains competitive.
How do I choose between CPC and CPM bidding on LinkedIn?
Choose CPC (Cost Per Click) if your goal is to drive specific actions, such as website visits or lead generation.
Choose CPM (Cost Per Thousand Impressions) for goals related to brand awareness or reaching a broad audience.
Can targeting by job function increase LinkedIn ad costs?
Yes, targeting by job function or seniority can increase costs due to higher competition for these audiences.
However, this targeting can also lead to more qualified leads and better campaign outcomes.
How does LinkedIn’s audience expansion feature affect ad costs?
Audience expansion can increase your reach and potential costs, but it can also help you find more users similar to your target audience.
Use this feature when you want to scale your campaign while maintaining relevance.
What’s the effect of LinkedIn’s ad relevance score on costs?
A higher ad relevance score, indicating that your ad is well-received by the audience, can lead to lower costs.
LinkedIn rewards ads that perform well with their target audience by potentially decreasing the cost per result.
How can I track the performance of my LinkedIn ad spend?
Use LinkedIn’s Campaign Manager to track key performance indicators (KPIs) such as impressions, clicks, click-through rate (CTR), and conversion rate.
This data helps adjust campaigns for better ROI.
Are there industry-specific cost variations for LinkedIn ads?
Yes, advertising costs on LinkedIn can vary by industry due to differences in competition and audience targeting.
Sectors with higher average deal values or competitive markets may see higher costs.
How does changing my ad creative affect costs?
Updating your ad creative regularly can prevent ad fatigue, potentially improving engagement and reducing costs over time.
Fresh content tends to perform better and engage more effectively with audiences.
Does LinkedIn offer any discounts for non-profits or educational institutions?
LinkedIn occasionally offers advertising credits or discounts to nonprofits and educational institutions.
Check LinkedIn’s marketing solutions page or contact their sales team for current opportunities.