Are Linkedin Ads too expensive?

Last week, I asked 229 Linkedin Ads advertisers what their biggest challenge was with LinkedIn, 58% of them said 'Cost of key results'.

On the face of it, LinkedIn initial costs are expensive. That won't be a shock to anyone who's ever used the platform but my argument is that it's often just the 'initial costs', if everything is set up correctly.

So, why is it expensive? Well it’s down a few factors:

• Second-price bidding auction: You’re directly bidding against other advertisers and paying $0.01 more than their bid. High competition, high prices.

• Frequency caps: Demand > Supply.

• Higher price floors: It’s a premium context with a premium price, even if you’re bidding without competition, the price floors are higher than other platforms.

The 3 reasons above can make it a very competitive place to reach the professionals you need for your business. But if it’s so expensive, why do companies still bother with it?

Both are ways you can use to your advantage to make LinkedIn cheaper for your bottom line.

What do I mean by cheaper?

So when I speak about LinkedIn being cheaper, I’m speaking only in part about upfront costs and yes, there are tests you can run to get cheaper key results in the platform, I'll talk about these later. More importantly (and sustainably), I’m talking about measurement beyond upfront costs. Things like pipeline, deal size, customer acquisition cost and the lifetime value from the customers that LinkedIn brings you.

A click for some audiences may look like a lot but you need to measure why you paid that for it - the reason is quality. You need to measure quality.

I won’t go in to detail on attribution models, that’s not the point of this article, there's lots of ways to attribute. All I’ll say is - if you don’t measure beyond the click cost and that cost seems too high, LinkedIn probably isn’t the channel for your business.

How to make LinkedIn cheaper with upfront costs?

Campaign Manager, the ad management tool, includes a lot of automated ways of serving ads to make the tool easier to manage in a busy schedule. However, when starting with LinkedIn - they're often not the best options for managing costs. It's usually a tradeoff between ease-of-use vs efficiency.

Below are some techniques to bring your cost of key results down:

1. Bidding Strategy

I’ll always start bidding manually when I begin a campaign. The reason is that automated bidding needs time to learn. So when starting a test campaign, you don’t want the strategy learning with your test budget.

What I do is bid slightly above the recommended manual bidding range. Then if your daily budget is spending easily - I bring the bid down in increments of 1 (€$£ or the equivalent) until I reach a bid-price where my daily budget spending is just reaching my daily budget.

The default option is maximum delivery bidding. My advice is to change that to manual when launching campaigns.

2. Campaign Quality Score

LinkedIn scores the ads you promote to your audience and this actually plays a big part in how much you bid.

It rewards and promotes engaging content in the LinkedIn feed. So the better your ads performing with regard to CTR, engagement rate etc. against other companies in the auction. The cheaper your bid price will be.

** You can also increase your CQS by being relevant with your audience, a way to do this is by using segmented targeting and copy (Article on that here)

3. Objective type

Objective types are just guides for what bidding type is best for you. They’re not gospel.

Test them and see what brings you the cheapest costs for your content. For example, I’ve had some success with clients when I’ve tested the following -

Website Visits Objective for Video Ads bringing me cheaper cost-per-view than the Video Views objective.

Engagement Objective bringing me cheaper conversions than the actual Website Conversions objective.

The above didn't work every time but they did sometimes - and that's the point.

Pick a performance indicator, for me I generally pick CPC. Then test your campaigns using different objectives.

Split your budget and see what works.

How to bring better ROI when measuring post-click?

This comes down to the quality you’re driving from LinkedIn. The targeting and first-party data is what sets LinkedIn aside from other channels. So make sure you’re utilising the Campaign Manager tool to get rid of the fluff and bring you the quality members you need.

1. Lead with Retargeting - make sure you’re converting the leads with highest intent first. The easiest way to do this is to use the functionality LinkedIn provides to capitalise on the signals you’ve got from them. Retargeting options like the below will isolate the members with the greatest intent towards your brand and you won't pay any more for the click than with the rest of your audience.

• Website visitors

• Video Viewers 75%+

• Company page followers / visitors of your target audience

• Groups (technically not retargeting but a targeting option that shows intent)

2. Turn off audience expansion - if you're sure of your target audience, with audience expansion activated you’ll be wasting budget targeting people outside it.

3. Optimise your lead-forms and landing pages - Lead-form completion can range from 1-15%. Yet, a lot of advertisers completely neglect the optimisation of the form. There’s no point in getting people to click your ads if your form doesn’t convert.

• Only include the fields you need (4-6 is optimal)

• Deliver a strong value-prop in the messaging of the opened-form. Rather than something simple like “sign-up to be contacted by sales”, give them another reason to convert after they’re clicked on your ad e.g. “Marketer's increase pipeline by 45% with optimise lead-form fields. See it in action” or whatever message suits your offer.

Small improvements in conversion rates can have a huge impact on costs. Better 20 clicks and 2 leads than 100 clicks and 2 leads.

What to think about when you have a very competitive and expensive audience?

Ok so sometimes after all your effort, your audience is still too expensive and you can’t get around the cost. In this case it’s down to how you approach positioning, content, differentiation, niching and ad formats.

1. Is there a way we can differentiate from our competitors to drive strong conversion?

If you go in with generic creative, content and landing pages. You’ll probably lose and pay a lot for it. Use new formats, different formats or even the same formats but with very different offers.

2. Is there a way you can specialise in a subsection your audience and focus your efforts?

If your competitors are bullying with budget, my advice is to focus on specialising on a certain part of your audience. Rather than spending all your money lightly across a big audience. Focus your targeting, messaging and value proposition towards a subsection.

3. What is the cheapest sub-section of our audience?

The auction or audience that's the least competitive doesn’t mean it’s the least valuable customer for your business. It may just be a blindspot for your competitors.

Use campaign manager to select separate audiences/targeting and check them against your suggested CPC/CPM. This will give you an idea of where you can find the cheapest audience subsections or blindspots of your competitors.

That’s it for this week…

You can reply to this email which comes directly to me or book a call if:

• Have any questions on the content

• Would like to discuss how to get your costs down on Linkedin

• Want me to build a LinkedIn-led social strategy for your business