What’s our average cost-per-click, and how does it compare to our last campaign? What ad units are delivering the most leads? Why did you increase the daily spend? These are some common LinkedIn ad budget questions your boss or clients will want answers to.
That’s why it’s essential to understand the unique budgeting criteria of each LinkedIn channel when you’re managing ad spend so you can stretch your budget further, make strategic optimizations along the way, and ultimately deliver the ROI your stakeholders want to see.
For B2B marketers, LinkedIn is a powerful tool to reach decision-makers and generate business leads. Data from LinkedIn shows that 79 percent of B2B marketers consider the platform to be an effective source for gaining leads, with 92 percent leveraging it more than any other social media outlet. Those same marketers report that 80 percent of their leads come from LinkedIn—so, clearly, it works.
While this B2B marketing trust emphasizes the success of the platform’s solutions in driving business results, in order to create winning campaigns, marketers will need to consider the features and requirements for budgeting for each of LinkedIn’s advertising channels.
Here’s what marketers need to do to start using LinkedIn advertising to generate serious ROI and how to tweak campaigns for optimal success along the way.
Clearly Identify Your Advertising Goals
Before diving into the details of budgeting, clarify the goals of your LinkedIn ad campaign. What are you trying to achieve?
When you consider the traditional marketing funnel, the general categories of goals are awareness, consideration, intent, conversion, and advocacy. LinkedIn advertising is best for campaigns that focus on awareness, consideration, and conversion. Your goals will direct the ad creative and budgeting strategy you choose. Every ad unit should be tied back to a specific goal.
Your campaign may end up having ad units that correspond to different goals. For example, a video ad could focus more on building awareness through views while an InMail message could be more about driving conversions through downloads. To set up a goal-based budget, figure out your priority goal first; then you can allocate your budget accordingly, with greater ad spend for your priorities.
Given the B2B audience and mindset of platform users, LinkedIn advises that 70 percent of your budget should go toward bottom-funnel tactics that bring leads or conversions, and the remaining 30 percent on upper-funnel tactics that focus on building awareness and engagement. This budget split can help you get off the ground with your campaign, but be sure to adjust it as you go based on your own results.
Choose the Corresponding KPIs
Now that you’ve decided on your goals and trial budget, it’s time to choose your pricing structure—how you’ll measure success and ultimately optimize your budget.
You can (and should) track all possible metrics, but you’ll need a primary focus to direct your LinkedIn ad budget. The budgeting options are cost-per-impression (CPM), cost-per-click (CPC) for sponsored content and text ads, and cost-per-send (CPS) for sponsored InMail messages that are delivered. These are the standards for aligning your LinkedIn goals and KPIs:
- Awareness: Select CPM to increase brand exposure.
- Consideration: Select CPC to encourage user engagement.
- Conversion: Select CPS to generate leads or drive action.
Within each marketing funnel phase, there are multiple metrics you can track in addition to these three. The KPI you choose, while it should be the focus of your measurement, should not be the only metric you monitor. Take into account all possible metrics as you develop your reporting for a cohesive picture of your ad performance. If your CPM, CPC, or CPS results aren’t where you want them to be, you can use these additional metrics to further investigate.
Remember that your LinkedIn KPIs may vary from other social media platforms. Evaluate each platform separately based on its unique features, algorithms, content, and audience.
Photo attribution: Unsplash
Time Your LinkedIn Campaign Right
When launching a new campaign, you always want to test, learn, and optimize to make sure you don’t waste money on tactics that don’t deliver.
LinkedIn suggests starting with a minimum of 100 dollars per day (if you choose the daily budget option) or $5,000 in a month (if you choose the total campaign budget option). The platform also recommends a trial period of two to four weeks—but don’t skimp on your ad spend during this trial, as you’ll need a generous amount of data to analyze and to inform any necessary adjustments down the line.
During this time frame, closely monitor the daily performance across your ad units to identify successes and opportunities to improve or adjust. Then you can revisit your budgeting approach based on the ROI within your campaign (and in comparison to other platforms).
Be wary of changing your strategy too soon if you aren’t seeing the results you want. Give your campaign enough time to gain traction, and make the initial optimizations before making dramatic changes.
Bid for Your Audience
One of the trickiest parts of managing your ad spend is audience bidding; it’s also one of the biggest factors to consider for optimization and can have a huge impact on the success of your campaign.
LinkedIn audience bidding operates by auction, where the winning advertiser is selected based on the highest bid and previous ad results. Thankfully, LinkedIn’s Campaign Manager takes out the guesswork by presenting a recommended bid range as you create your audience. The bid ranges will be higher for competitive audiences.
If your audience bid range is higher than expected, it’s not necessarily the best move to change your audience criteria for a less competitive cost. It’s worth investing in reaching the right people since your ad spend will go farther through qualified impressions, engagements, or conversions.
At the beginning of your campaign, LinkedIn suggests that you bid one or two dollars more than the recommended bid range. This will give you a greater chance of winning the bid. Similarly, don’t be too conservative in setting your daily budget cap. For daily optimizations, you’ll need enough impressions, clicks, or conversions to make data-driven decisions.
Whether you plan your budget by month, quarter, or year, allocate more of your budget at the beginning to generate a significant amount of data. Spending more at the start of your campaign lets you better optimize through plentiful data to maximize your spend toward the end.
Identifying the ideal budgeting strategy for LinkedIn advertising will take trial and error. These tips will help you get started on the right foot, but remember that you should adapt and adjust your budget based on your own results. Over time, you’ll be able to set benchmarks based on performance and optimize for the highest ROI to please your managers and clients with results that matter.
For more stories like this, subscribe to the Content Standard newsletter.
Featured image attribution: Jungwoo Hong on Unsplash