If you have a business, you need to be on LinkedIn. It’s that simple. Yet, understanding how LinkedIn Ads work and how much they cost is no easy matter.
We are halfway through the year, and LinkedIn Ads are becoming more popular and costly.
If you want to be in the foreground, you need to understand how the platform works and how much you should be spending on ads.
In this blog post, we’ll look at the current state of LinkedIn Ads and how much you can expect to pay for them in 2023.
Factors Affecting the LinkedIn Advertising Cost
According to LinkedIn, three factors affect your LinkedIn advertising costs:
1. Target Audience
When advertising on LinkedIn, you must compete with other advertisers to have your ad seen. If you target an audience that is in high demand, you can anticipate higher costs due to the audience’s value and the increased competition for that audience’s attention.
Moreover, your target audience can also affect your cost if they are located in a specific region or country that is more expensive to advertise in.
Likewise, the interests and demographics of your target audience can affect your cost, as LinkedIn charges more for ads that are targeting people with specific interests or who fall into certain demographic categories.
2. The Bidding
Your bid will also affect the cost of your LinkedIn ad. You will pay a portion of your bid even though you will never pay more than you offered. Due to the fact that the winner of LinkedIn’s ad auction pays one cent more than the next highest bidder, this is the case.
Each time you create a LinkedIn ad, you’ll need to set a bid – this is the amount you’re willing to spend on each click on your ad. Your offer will affect your LinkedIn advertising cost in a few different ways.
The amount you offer will directly impact how much you’ll pay per click on your ad. LinkedIn uses a bidding system called cost-per-click (CPC), which means that you’ll pay a certain amount for each person who clicks on your ad.
The CPC bidding system means that the amount you’re willing to pay per click will directly impact how much you’ll pay overall for your LinkedIn ads.
Not to mention, your offer influences your ad’s placement on LinkedIn. LinkedIn uses a bid system called bidding zones to determine the order of your ads.
Come to think of it as a simple eBay-style auction. The merchant is LinkedIn, and the products you’re selling are your brand’s reputation and access to potential clients.
Each zone has a minimum bid amount, and if your total exceeds the minimum, your ad cost will increase.
3. Ad Relevance Score
In terms of LinkedIn advertising costs, ad relevance scores play a significant role.
Ad relevance score is a metric that LinkedIn uses to determine how well your ad aligns with the interests of the LinkedIn member who sees it.
The higher your ad relevance score, the more likely your ad is to be shown to members who are more interested in what you’re advertising.
LinkedIn members who see your ad will also rate its relevance on a scale of one to five stars. The more stars your ad receives, the lower your ad cost will be.
Due to LinkedIn’s desire to serve relevant and engaging advertisements to its users, a high ad relevance score can reduce your expenditures.
Bidding Options Available for LinkedIn Ads
The three bidding options available for LinkedIn ads are cost-per-click (CPC), cost-per-impression (CPM), and cost-per-engagement (CPE).
CPC is the most common bidding option and allows you to pay for each click on your ad.
CPM is a less common option and allows you to pay for every thousand impressions your ad receives.
CPE is the least common option and allows you to pay for each engagement with your ads, such as a like, share, or comment.
How Much Does LinkedIn Advertising Cost?
LinkedIn requires corporations to bid a minimum of $2 for cost-per-click (CPC) and cost-per-impression (CPM) campaigns, yet, advertiser-specific fees vary. Meanwhile, businesses spend an average of $5.26 per click, $6.59 per thousand impressions, and $0.80 per send for Sponsored InMail campaigns.
How Can You Manage Your LinkedIn Advertising Budget?
There are techniques to restrict advertising expenditures on LinkedIn:
Start with a $10 Budget
It is the perfect approach if you need a campaign delivered on time for a fixed budget. A minimum of $10 must be spent to run a single advertisement.
A daily budget is necessary if you want to create an active campaign. Similarly, at least $10 per campaign is required for this choice.
This option allows you to specify the amount you are willing to spend for clicks, impressions, and other alternatives. You never pay more than the sum of the bid. The minimum bid for each click is $2.
Choose Your Advertising Plan
Choose your advertising spending plan. Your pricing model should coincide with the objectives of your campaign.
For instance, if you want to generate new leads for your firm, establishing a bid amount will produce the best campaign outcomes. You will only be charged when people click on your ad, indicating that they are interested in your business.
No matter which ad kind you select, the amount you pay is determined by your budget. If you’ve ever run a pay-per-click (PPC) campaign, you’ll be informed how LinkedIn advertising functions.
You have a fixed budget and spend no more than that amount.
LinkedIn Ads will continue to be a tool for companies to connect with professionals and generate leads in the future. The cost of LinkedIn Ads will continue to escalate as the platform becomes very popular.
Anyhow, the return on investment for LinkedIn Ads will still be high because of the targeting options and the ability to reach a professional audience.
To know more about this, check out the LinkedIn advertising cost and pricing.