Are LinkedIn ads really worth paying for? (2022)

LinkedIn has long been seen as something of a social media also-ran. But in recent years, the platform has expanded its user base and engagement — and put increased focus on ads.

So, are ads on LinkedIn worth paying for?

The short answer… it all depends.

What I have learned over the past five years as a LinkedIn ads specialist is that, while this is one of the most common questions I get asked, it’s never just a yes or no answer.

If you’re like most clients I work with, this is likely what’s going on:

You’re looking to generate more leads, drive website traffic, and build brand awareness for your company. You’ve heard that advertising on LinkedIn is a great place to start.

You’ve also probably Googled things like “how much do LinkedIn ads cost” or “how much should I spend on LinkedIn” and have seen an abundance of headlines like Why LinkedIn ads come with a premium CPC or How not to waste money on LinkedIn ads or even Why LinkedIn ads will break your bank.

I imagine that your head is spinning and you're asking yourself, again, “are LinkedIn ads really worth paying for?”

(Video) Are LinkedIn Ads Worth It? Are LinkedIn Ads Effective?

Before we address that big question, though, you need to ask yourself exactly what you’re looking to get out of advertising on LinkedIn.

That way, you can decide what is best for your company.

Free Course:Fundamentals of Social Media Marketing

Why consider LinkedIn ads to begin with?

According to the latest statistics from LinkedIn, there are 675 million users on the LinkedIn platform actively engaging as professionals in their field.

What does this mean for your business? This means that you have an opportunity to engage and target prospects by their job titles, skill set, seniority, company name, industry, and more. Some will be decision makers, while others will offer direct paths to decision makers.

With a pool of prospects this size, LinkedIn advertising can quickly become a real lead generator, which could make it the potential revenue stream that you have been looking for.

However, before you dive in, it is essential to ask yourself this: “Does my target audience spend time engaging in this space?”

There are typically two reasons professionals are drawn to the LinkedIn platform.

  • Career advancement - Members are often thinking about their next career move.
  • Professional and personal development - Members are heavily invested in improving themselves.

If your product or service could fit into what these individuals are looking for, LinkedIn ads could very well be a good fit.

Hopefully you have done ample research on your buyer personas and will have an answer to this question. If you are still struggling to develop personas, check out our free buyer persona template.

(Video) Linkedin Ads Cost: Is It Worth It?

Determining if LinkedIn ads are a good fit

First things first, LinkedIn prospects are not necessarily sales-ready. By this I mean that they are not necessarily looking for your product or service, but they may be interested in it once educated via content (articles, videos, infographics, etc.).

With LinkedIn ads, you are targeting users in hopes that they are interested in what you have to offer — or are at least near interested in having a conversation with you.

LinkedIn ads are what we call disruptive marketing, and unlike Google, where you can spend your advertising dollars on user intent (when a user types a keyword and is served your ad), you are placing yourself into a LinkedIn member's newsfeed without them asking for it.

The analogy I like to use is a cabby looking for a fair vs. a chauffeur looking for their customer. The cabby is trying to get the attention of anyone walking by who might need a ride (the LinkedIn member scrolling through their feed), while the chauffeur is looking for a specific customer (the user who performed a Google Search looking for them).

This leads to the next important question: can your product or service withstand the longer, more nurturing-focused sales cycle that characterizes LinkedIn ads?

Based on LinkedIn’s higher cost-per-click, companies with smaller deal sizes or smaller margins will have trouble seeing a positive return on investment.

You will want a large enough deal size in the end to help offset your upfront cost to ensure a return on your ad spend.

SAAS companies, software solutions, technology companies, and other B2B companies with larger deal sizes often find the most success with LinkedIn ads.

So, how much do LinkedIn ads cost?

According to LinkedIn, they offer “ads for any budget.” However this is simply not the case in my experience.

Just as LinkedIn ads are a better fit for companies with larger deal sizes, they are also a better fit for companies with larger budgets. I am not saying that you can’t advertise on LinkedIn with a smaller budget, you will just need to adjust your expectations around performance and success.

(Video) Are LinkedIn Ads Really Worth It? - Justin Rowe

According to LinkedIn, there are three factors that can influence cost:

  • Target audience: With narrow targeting options, you run into the issue of targeting a high-demand audience. Higher demand equals higher cost, based on the value LinkedIn assigns the audience and the amount of competition.
  • Bid: Similar to Google, during the auction process you only pay $0.01 more than your competitor’s bid, but what you are willing to pay will be a determining factor in your overall cost (higher competition = higher cost-per-clicks). Meaning that if your competitor is willing to pay $2.50 for a click and you are willing to pay $3.00, you will win the auction and LinkedIn will only charge you $2.51 for the click.
  • Ad relevance score: If the content is valuable to the audience (which is determined by the number of clicks) and the overall engagement the ad gets, LinkedIn will serve your ad to your audience as desired. If the ad is not generating clicks or engagement, LinkedIn will stop serving the ad. High ad relevance is typically rewarded on the LinkedIn platform with lower cost-per-clicks.

For most companies, I would recommend starting with a monthly ad spend budget between $2,000 - $5,000.

A budget of this size will allow for a daily spend between $66 - $165, which typically yields enough data to determine performance success and allow for faster scaling.

What ad format is best for LinkedIn audiences?

One of the best attributes of LinkedIn ads is the variety of ad types available. Here are some of those available types and the key takeaways you should always consider.

Text ads - These appear on prominent pages within LinkedIn such as LinkedIn member profile pages, home pages, search results, and group pages.

Are LinkedIn ads really worth paying for? (1)

Sponsored content - These run natively within a LinkedIn member’s news feed.

Are LinkedIn ads really worth paying for? (2)

Sponsored in-mail - These are direct messages you send to your LinkedIn member prospects when they are active on the platform in their messaging inbox.

Are LinkedIn ads really worth paying for? (3)

(Video) Linkedin Advertising: Is LinkedIn Ad Worth for Your Business?

Video ads - These are just like sponsored content except you are engaging your LinkedIn members natively in their news feed on both desktop and mobile with video (rather than static imagery).

Are LinkedIn ads really worth paying for? (4)

LinkedIn ads terms and metrics you need to know

How can you know if LinkedIn ads are the right platform for you? These are my top three metrics for determining success with LinkedIn ads:

1). Click-through rate (CTR) signals how interesting your ads are. A higher CTR indicates an interested audience, and a low CTR means you are missing the mark on how you are attracting or engaging with your audience.

2) Conversion rate shows how many of your engaged audience members actually took the desired action.This is a great indicator of your offer.

3) Cost per acquisition (CPA) shows you how much it cost to get an initial lead.

A few things to note: LinkedIn does require a minimum CPC of $2 to advertise on the platform, but we typically see average CPCs around $7-11.

However, if you are targeting C-suites or Fortune 500 companies, you should expect to see an average around $15-$25. Why the major cost difference? These companies and job titles have the most competition, as everyone wants to talk to the decision makers and the largest companies.

So, are LinkedIn ads really worth paying for?

If you can sustain the recommended budget and have a deal size large enough to create a positive ROI, LinkedIn ads can be a great investment. LinkedIn ads typically yield high-quality leads and offer larger niche targeting options, making them an ideal solution for most B2B companies.

If the proposed budget and longer sales cycle seem intimidating, you may want to consider other options instead of investing in LinkedIn, such as a Google pay-per-click (PPC) with retargeting or Facebook.

(Video) Is LinkedIn Advertising Worth the Money?

If you have any questions or want to share your LinkedIn adventures, drop me a line in IMPACT Elite.

I am always happy and excited to talk about all things LinkedIn Ads!

FAQs

Are LinkedIn ads really worth paying for? ›

If you can sustain the recommended budget and have a deal size large enough to create a positive ROI, LinkedIn ads can be a great investment. LinkedIn ads typically yield high-quality leads and offer larger niche targeting options, making them an ideal solution for most B2B companies.

Are LinkedIn ads better than Google ads? ›

LinkedIn allows marketers to target decision-makers and key audience members in a variety of effective ways. For B2B companies looking to connect with decision-makers, LinkedIn is an excellent digital ad platform. For B2C companies trying to widen their reach, Google Ads usually work best.

What type of LinkedIn ads perform best? ›

As you can see here, of 410 responses to our poll, 42% indicated that single image ads have been the best performing LinkedIn ad option for their or their clients' business, followed by video ads, then promoted text posts and other options a way behind.

What is the best budget for LinkedIn ads? ›

LinkedIn generally recommends setting a budget of $5,000 per month, which you can spend in a few different ways.
...
They can be refined as follows:
  • Choose your campaign objective (awareness, consideration, or conversions)
  • Using this objective, create your message.
  • Measure and optimize your results with demographic reporting.

Is it worth paying for ads? ›

If you've been using every free marketing platform available and still not seeing quality results, it may be time to invest in paid advertising. Online paid advertising will generate valuable traffic to your website, create brand awareness, increase leads, and make sales.

Is LinkedIn ads good for B2C? ›

Marketers should definitely use LinkedIn for B2C marketing because professionals have a life outside work too. Moreover, only a few B2C brands have started leveraging the platform, which means lesser competition. 2. How to do B2C marketing on LinkedIn?

Are LinkedIn ads worth it? ›

Linkedin ads are worth it if you have a high-ticket offer. That is because the cost to run ads are a little higher than on other platforms. But the quality of leads you get will be better and more likely to convert.

What are the advantages of LinkedIn ads? ›

7 Advantages of Planning LinkedIn Ads Campaigns
  • Target Professionals and Leaders in Your Industry. ...
  • Higher Conversion Rates. ...
  • Promote Your Products or Services. ...
  • Track Profile Visits. ...
  • Networking and Traffic. ...
  • Connect Your Social Media Accounts or Your Blog. ...
  • Promote Your Courses, Seminars and Conferences.

Why do people use LinkedIn ads? ›

Linkedin Ads is a powerful marketing tool for B2B companies to build leads, online recognition, share content, and more. To grow in the professionals market, companies have to use LinkedIn marketing to achieve it, and with LinkedIn, Ads promote their presence on the platform.

How much do LinkedIn ads cost 2022? ›

On average, though, the cost of LinkedIn ads is $5.26 per click, $6.59 per 1000 impressions, and $0.80 per send. Want to learn more about how much it costs to advertise on LinkedIn? Keep reading!
...
[Summary] LinkedIn advertising costs.
Bid TypeAverage Cost
CPS$0.80 per send
2 more rows

How much is pay per click on LinkedIn? ›

The average CPC (cost-per-click) on LinkedIn is around $5.39. Depending on your budget, this might be a bit expensive, but remember these clicks come from users that can easily turn into qualified leads. But not all campaigns on LinkedIn are measured by CPC.

How does LinkedIn daily budget work? ›

Promoted Job Posts on LinkedIn

While employers set a daily budget for the job post, the exact price for the day is based on the number of clicks or views the post gets. But don't fret—LinkedIn doesn't charge more than 50% of your daily budget in one day and it won't charge more than your total budget.

How much should you spend on social media ads? ›

How much should you budget for social media advertising? While every company's social media ad strategy varies, most businesses spend $200 to $350 per day on social media advertisements. That translates to $6000 to $10,500 per month and $72,000 to $126,000 per year.

Why are paid ads good? ›

With paid advertising, you're guaranteed to reach a defined audience and can utilise your content to elevate your brand with specific targeting and get more qualified leads. But don't underestimate the importance of organic marketing. Behind any great paid ad campaign is a consistent and creative organic strategy.

Are social media ads worth it? ›

Social media advertising is critical because it allows you to hyper-target specific users, build an audience database and directly track your return on investment. Forbes Agency Council is an invitation-only community for executives in successful public relations, media strategy, creative and advertising agencies.

Is LinkedIn better for B2B or B2C? ›

Although LinkedIn has traditionally been known as a B2B network, the platform is ripe for B2C brands looking for better ways to connect with their target audiences. LinkedIn can also be a promising alternative to Facebook for B2C brands wanting to connect organically and educate users about their products.

Is LinkedIn good for B2B? ›

LinkedIn is a powerhouse social network for B2B marketers. Built for business networking, LinkedIn works exceptionally well for B2B lead generation, making it one of the top tactics for B2B marketing.

Is LinkedIn a B2B or B2C? ›

LinkedIn is by far most the important social network to reach out to business buyers and connect with professionals in general and thus one of the major platforms in B2B social media (and increasingly in content marketing).

How do I optimize LinkedIn ads? ›

5 Must-Try Tips for Optimizing LinkedIn Ads
  1. Resurrect an ad by changing its image. Is an ad lagging? ...
  2. Capture audience interest by calling out your targeting. ...
  3. Support bold headlines with the ad description. ...
  4. Get more impressions by bidding generously. ...
  5. Reach qualified prospects by targeting groups.
Dec 6, 2013

What are the three primary formats in the LinkedIn ads Manager? ›

Sponsored Content appears directly in the LinkedIn feed of professions you want to reach, and comes in three different formats: single image ads, video ads, and carousel ads.

Which method is used by LinkedIn to determine which ads are shown? ›

Automated Bidding (Uses CPM)

This method uses CPM bidding and will charge you for every 1,000 impressions. In this scenario, the advertiser allows the algorithm to set bids without setting a maximum bid cost limit.

What are dynamic ads LinkedIn? ›

Dynamic ads are personalized ads tailored to each member based on their own LinkedIn profile data, such as profile photo, company name, or job title. Note: Each member sees their personalized information; member profile information is not displayed to other members.

Videos

1. Are LinkedIn Ads worth it?
(Julbert Abraham)
2. LinkedIn Advertising - Is It Really Worth It?
(StrategiQ)
3. Are LinkedIn PPC Campaigns TRULY Worth It??
(Guaranteed PPC)
4. Linked Ads: Are they worth It and should you advertise?
(PaperVideo)
5. Are LinkedIn Ads Worth It For Coaches & Consultants?
(YaboyLV)
6. Are Linkedin Ads Worth it? Do Linkedin ads Work? Who do Linkedin ads work for? Linkedin ads work?
(Impactable - LinkedIn-Ads Agency)

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