linkedin ads budget

How Much Should I Budget for LinkedIn Ads?

LinkedIn ads are an excellent tool for primarily business-to-business (B2B) and peer-to-peer marketing to generate leads, build backlinks, create unique advertising opportunities, and increase overall traffic and sales on your website.

However, if you don’t appropriately budget your LinkedIn ads to scale with your business, the ads won’t be optimized to be effective and can quickly become more of an expense than an advantage.

linkedin ads budget

This article will help you understand the LinkedIn ads ecosystem, determine if LinkedIn ads are a good fit for your business, and decide how much money you should budget for LinkedIn Ads.

What are LinkedIn ads?

With over 690 million professionals in a wide variety of fields, LinkedIn ads offer many businesses an exceptional opportunity to advertise to industry peers alongside other businesses.

Using a unique Objective-Based advertising system LinkedIn lets advertisers choose between seven unique targeting models including Brand Awareness, Website Visits, Engagement, Video Views, Lead Generation, Talent Leads, Website Conversions, and Job Applicants. 

Within these advertising models are unique payment models enabling LinkedIn ads to be effective for any sized business. These unique payment models include cost-per-click (CPC), cost-per-impression (CPM), and cost-per-send (CPS).

With over 690 million professionals in a wide variety of fields, LinkedIn ads offer many businesses an exceptional and flexible opportunity to advertise to industry peers alongside other businesses for a variety of prices.

Objective-based LinkedIn ads explained

Brand Awareness: The objective of a brand awareness campaign is to increase overall brand awareness rather than necessarily drive sales or clicks. Thus, this campaign is priced depending on impressions and reach, on a CPM payment model.

Website Visits: The website visits campaign can be situated in a combination of the CPM and CPC model or a CPS model. Website visits are extremely flexible to budgets and different types of advertising.

Engagement: Similar to the website visit objective-based ad structure, the engagement payment structure is simply based on CPM, CPC, or a CPS model depending on what the business prefers. 

Video Views: The videos views campaign type is based only on a CPS or CPC payment structure. There’s no option for a CPM structure.

header bidding

Lead Generation: Lead generation is paid for by using the CPC or CPS model. Similar to video views, the lead generation objective-marketing strategy doesn’t have an option for CPM payments.

Talent Leads: Talents leads are a special case that you likely won’t use for your first LinkedIn campaign. Only available to companies with an active LinkedIn recruiter contract, the goal of talent leads are to create leads of individuals who may be interested in working at your company, for your company. These are based on either a CPC or CPM payment model.

Website Conversions: The goal of website conversions is to bring active leads to your business. Website conversions are based on any of the three models: CPM, CPC, or CPS.

Job Applicants: The objective of the job applicants advertisement model is to create interest in applying to your company. On a B2B platform like LinkedIn, this model of advertising, in particular, can be extremely sucessful. This objective-based advertisement is most often based on CPS but can be based on the CPM payment model.

How much money should you budget for LinkedIn ads?

Overall, the cost of LinkedIn ads will vary widely depending on a business’s objectives. On top of objective-based ads costing different amounts, the advertisement’s cost will also be influenced by factors such as target audience, ad relevance, competitors, and your region. 

On average, businesses currently advertising on LinkedIn budget between $1,000 – $5,000 per month depending on these varying factors and their size.

Generally, the price breakdown is as follows:

  • Cost-per-impression (CPM): Using the CPM model, per 1,000 impressions LinkedIn ads cost an average of $6.59.
  • Cost-per-click (CPC): Using the CPC model, LinkedIn ads cost an average of $3.99 per click.
  • Cost-per-send (CPS): Using the most effective and expensive model, the CPS model, LinkedIn ads cost an average of $0.8 per send.

To have a good gauge on your spending the Performance tab will help you calculate not only the conversions but also the conversion rate and conversion cost. This is the most important metric when doing a cost-benefit analysis to determine wether your ads are profitable.

Using a creative mixture of these advertising models and sticking to your ultimate campaign goal is extremely important during the first few months of creating advertisements. 

It can be discouraging not seeing an immediate return on investment, but realistically you’re likely not going to make money from LinkedIn ads every month. 

Finding unique advertising opportunities, constantly making your marketing campaign more effective, and continuing to grow your business both organically and through advertisements will be important factors to continue as you advertise on LinkedIn.


Written by
animitevabg
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2 comments
  • HI Animit,
    How do you know if the ad is working when you cannot prove clicks or sales? The GA looks different than what the LinkedIn Ad platform says about the number of clicks. Thank you!

    • Hello Lisa,

      You can measure clicks and sales both on LinkedIn and GA. It’s important to keep in mind that the way platforms measure metrics is different (it has to do with attribution models), so it may happen that the leads/clicks you see on GA and the ones you see on LinkedIn are slightly different. The problem happens when the difference is too big.

      Please let me know in case you need help troubleshooting with an issue you have – I will be happy to help.

      Best regards,
      Ani

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