Establishing a good bidding strategy on LinkedIn is key to maximizing results within your campaign budget. Some strategies will give you more control over your ad spending, while other take a more automated approach.
Today, we will look at all the possible LinkedIn bidding strategies, and how they align with your Marketing goals.
What is a bidding strategy on LinkedIn?
A bidding strategy determines how you spend your budget to reach your goal – by default, LinkedIn will try to get the best results possible for your budget. However, setting a specific performance goal will help algorithms undertake the best strategy in order to achieve it.
In other words, you use bidding strategies to guide algorithms towards how you want your budget to be spent. And how they should charge you for a specific action that the user took in regards to your ad.
To sum it up, there are 4 main LinkedIn bidding strategies: Maximum delivery (Automated bidding), Manual bidding, Enhanced bidding and Target cost. They are usually aligned with your campaign’s objectives, ad formats, and optimization goals.
How does bidding work?
If you already have experience with digital advertising and know how bidding works, you can skip this point. However, if you are new to it, and LinkedIn campaigns are your first encounter, bare with me for a second.
Because I think it is very important to explain how bidding works in Digital Marketing, and especially how LinkedIn bidding strategies work in particular.
In traditional advertising, if you want to place your ad on a huge billboard, you speak to the company that offers it. At the same time, they are probably speaking with other potential advertisers as well.
Usually, the one who is willing to pay the maximum amount is the one who gets the space.
When it comes to digital advertising, the process is very similar but not exactly the same. You see, when you want to purchase ad space from the digital channel, you place a bid. Which is the maximum amount that you are willing to pay for a single click, view, etc.
However, you are not really speaking directly with the channel. Instead, you use the Campaign Manager (in the case of LinkedIn) to communicate this information.
But because thousands of other advertisers are doing the same as you, LinkedIn has to establish an automatic process to decide who gets to appear on users´ feed, and when.
Showing up on your audience’s feed
And this is where bidding comes in place. Every time a user scrolls on their feed, multiple advertisers “fight” for his attention by bidding with the maximum amount they are willing to pay.
However, because they are so many, and some of them have an infinite budget while others a limited one, LinkedIn can’t let always “the big guys” win. If that was the case, small advertisers would never stand a chance against them!
For this reason, LinkedIn bidding strategies take into account the following factors:
- Your bidding strategy (bid type);
- The maximum amount that you are willing to pay;
- And the quality score of your ad.
In other words, how relevant it is for the user.
Your quality score, also called relevance score, is determined by factors such as:
- The Click-through rate of your ad (CTR);
- Engagement rate;
- Member feedback;
We don’t really know what is the particular weight of each factor when it comes to calculating your quality score. However, being able to see the exact score can give you a really good perspective on where you are with your campaign performance.
And now that we have explained how bidding works, it is time to see the different strategies and optimization goals that are available in your Campaign Manager.
Currently, there are 4 main LinkedIn bidding strategies that you can select from for your campaigns:
- Maximum delivery (automated)
- Target cost
- Manual bidding
- Enhanced bidding
But before we talk about them, it is important to know that you can refine each one according to particular optimization goals.
To put it simply, an optimization goal is the end goal that you want to achieve with your campaign.
For example, it could be showing your ad to as many people as possible, driving clicks to your website, or generating as many conversions as possible for the set budget.
With this information, LinkedIn will try to show your ads to members most likely to take the action that gets your desired result.
So now, let’s take a look at the different optimization goals that are available for your LinkedIn bidding strategies:
If you select this goal, LinkedIn will aim to deliver as many impressions as possible according to the bidding strategy that you’ve selected.
One ad impression is basically one ad view – the number of impressions will show how many views were registered for your ads. In other words, how many times was your ad seen on LinkedIn’s feed?
Clicks / Landing page clicks
If you select this goal, instead of measuring impressions, LinkedIn’s algorithms will aim to show your ads to the people who are the most likely to click on them.
With this optimization goal, algorithms will try to deliver your ads to users who are more likely to engage and interact with them.
On LinkedIn, engagement is measured with social actions, landing page clicks, LinkedIn page, LinkedIn page follows, or social pill).
By selecting this optimization goal, LinkedIn’s algorithms will aim to show your video ads to those members who are more likely to watch them for 2 continuous seconds or more, in order to get as many video views as possible.
This optimization goal is unique for the Lead Generation campaign objective, and it will deliver ads to LinkedIn members who are more likely to submit a Lead Gen form.
This goal is unique for the Website conversions objective, and it will tell algorithms to show your ads to people who are more likely to perform a valuable action on your website, aka conversion.
As we explained previously, a conversion can be a form submission on your website, an ebook download, etc.
With this goal, LinkedIn will optimize towards the number of unique member accounts that see your ads. In other words, it will try to not show your ad more than once to a single user.
LinkedIn bidding strategies
When it comes to bid types, the first thing that you need to know is that not all of them are available with all LinkedIn ad formats.
They are also aligned with the different ad objectives that Campaign Manager offers. So, not all types are available for all objectives:
If you are not familiar with the concept, an objective is the goal that you choose for your campaign. In other words, what are you trying to achieve with it? Generate more leads, get users to download a brochure, invite them to an event, or obtain more video views?
And now, let’s see our LinkedIn bid types in detail:
1. Maximum delivery (Automated bid)
LinkedIn bidding strategies #1: Maximum delivery
If you select automated bid, instead of manually selecting the maximum amount that you are willing to pay per action, LinkedIn will do it for you.
Automated bidding uses machine learning to try and get the best results for your budget. Of course, these results will depend on the optimization goal that you’ve selected – such as website conversions, landing page clicks, or engagement clicks.
For example, if you select Website conversions as your optimization goal, LinkedIn will try to get as many conversions as possible within your budget limitations.
On another hand, if you select Landing page clicks, LinkedIn will try to drive as many clicks as possible to your landing pages, and so on.
In my opinion, not setting a cap for your bid might not be very efficient for your results. Because you are leaving your bid in the hands of LinkedIn, and there is no limit, your Costs per Click might increase if you aren’t monitoring them closely.
For this reason, the next bid type that we are going to see will be one that gives you more control over your spending.
2. Manual bidding
LinkedIn bidding strategies #2: Manual bidding
Next on our list of LinkedIn bidding strategies is Manual Bidding, an option that gives you more control over the cost per action of your campaigns.
Usually, LinkedIn will give you a recommended bid amount, which is calculated taking into consideration:
- Your campaign segmentation – some audiences are significantly more competitive than others, which means that the average bid would also be higher.
- What other advertisers are bidding – the Campaign Manager is going to give you a range of the minimum and the maximum amount that other advertisers are spending per click for a segmentation similar to yours.
It is completely up to you to set your bid depending on your budget and goals. However, I strongly suggest that you intend to bid at least above LinkedIn’s recommendations.
If you try to bid lower, the chances that your campaign will under-perform (not show up as often) are higher.
3. Enhanced bidding
LinkedIn bidding strategies #3: Enhanced bidding
In Manual bidding, when you enable the option “Enable bid adjustment for high-value clicks”, the strategy converts to Enhanced bidding.
Enhanced bidding is practically the same as Manual bidding, except that there is one key difference.
If you select Enhanced bidding, LinkedIn will automatically adjust your bid up to 45% higher if it considers that a click is more likely to lead to a valuable action, such as a form submission or an e-book download.
How does LinkedIn calculate who is more likely to engage or convert? The algorithms look into the historical data of their members, and whether they have converted or engaged with content similar to yours in the past.
If they are generally active on LinkedIn, and show interest in other ads or organic publications like that, they are considered more likely to convert.
4. Target cost
LinkedIn bidding strategies #4: Target cost
While Manual bidding allows you to control your bids in the campaign auction, Target cost allows you to set a maximum cost that you don’t want to exceed from the perspective of your optimization goal.
It may sound confusing but it’s actually quite simple.
For example, if your optimization goal is Landing page clicks, it simply means that the maximum that you are willing to pay for a click is an X amount of money. This is your target cost.
In another example, if your optimization goal is Website conversions and you set this goal to 5 dollars, it means that the maximum amount that you are willing to spend per conversion is 5 dollars.
As a result, LinkedIn’s algorithms will aim to generate conversions without exceeding your target cost.
And that is basically all from me, folks! Thank you for taking the time to read my article on the top LinkedIn bidding strategies, and I hope to see you in the next one!
Do you want to become an expert in LinkedIn advertising? Get my ebook “The Complete Guide to LinkedIn Advertising!”
And last but not least, let’s answer some of the most common questions regarding LinkedIn bidding strategies:
How much should I bid on LinkedIn?
While recommended bids may vary depending on the advertiser, target audience, industry and the quality of the campaign, it is always better to bid above the price recommended by LinkedIn. If you bid lower, your campaign will be at risk of under-performing.
What are the types of LinkedIn bidding strategies?
Currently, there are 4 main LinkedIn bidding strategies: Maximum delivery (Automated), Manual bidding, Enhanced bidding and Target cost. You can also adjust them according to different optimization goals, including Impressions, Website conversions and Landing page clicks.
Which is the best LinkedIn bid type?
While different advertisers may find success with different LinkedIn bid types, the best bidding strategy for having more control over your budget and ad spending while getting great results is Enhanced bidding.
How do LinkedIn bids work?
LinkedIn bids work by taking into account the maximum amount that you are willing to pay per action, such as click or conversion. If you win the bid, you will only pay the minimum amount necessary to beat the second-highest bidder.