How Much Do LinkedIn Ads Cost?

  • Last update: 01/11/2023

Benjamin Poirrier

Digital Marketing Expert

LinkedIn ads monetization icon

LinkedIn is a social network connecting professionals worldwide. Job seekers and employers use it for career development purposes. People also visit LinkedIn to follow up on business trends and find sales leads.

Here are LinkedIn platform statistics (worldwide):

  • 900 million LinkedIn users.
  • 310 million monthly active users.
  • 57% male and 43% female.
  • 59 million companies are listed on LinkedIn.
  • 2 million active publishers.

For Vietnam, check these noticeable figures:

  • 3,8 million LinkedIn users.
  • 65% are 25-34 years old.
  • 30% are 18-24 years old.

This article focuses on LinkedIn ad costs from A to Z. It deals with the main LinkedIn advertising component factors, and how to run ads to maximize your Return On Investment (ROI).

LinkedIn Ads Cost
LinkedIn Ads

Getting Started with LinkedIn Ads

Before running any ads on LinkedIn, make sure this channel is suitable for your business. For example, if you sell apparel, you are better off advertising on Instagram, Google, or TikTok.

LinkedIn is a business-to-business (B2B) channel. Companies run LinkedIn ads to target professional people, as a B2B lead generation strategy. Brands sell products or services that benefit business owners.

Advertisers must be aware that LinkedIn ads are more expensive than on other channels. Therefore, they need to be careful before launching any campaigns. LinkedIn advertising is worth it for specific markets only.

The main objectives of LinkedIn ads are:

  • Brand recognition.
  • Service awareness.
  • Website traffic.
  • Lead generation.

There are 4 main billing models on LinkedIn ads:

  • Cost Per Click (CPC).
  • Cost Per Mille (CPM) or Cost Per Thousand Impressions.
  • Cost Per Send (CPS).
  • Cost Per View (CPV).

The CPC model is most efficient for engaging the target audience and getting conversions. The CPM, like Google Display Ads, works for visibility and brand awareness. The CPS model is powerful when businesses get precise insights about their target audience. The CPV looks like the YouTube ads format, it counts video views after a 3-second watch.

We go into detail about the LinkedIn advertising targets and billing models below.

LinkedIn Ads Costs Factors

The LinkedIn platform charges advertisers based on the following criteria:

  • Campaign objective.
  • Type of ad.
  • Ad relevance score.
  • Target audience.
  • Bidding.
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Linkedin Ads Bidding Process

The campaign objective is the first important factor that impacts LinkedIn ads costs. As we will see later in this article, the fees for lead generation ads are much higher than what businesses pay to run a brand awareness campaign.

The 4 main types of LinkedIn ads that we introduce in the next section directly affect the costs. We make it clear in the average fees section below.

LinkedIn’s algorithms calculate an estimation called “ad relevance score.” It determines if users would find the ad both useful and engaging. The higher this metric, the lower the cost. An advertiser with the best ad relevance score will pay less than all competitors.

The target audience impacts the LinkedIn ads cost because of the potential clients’ value, the market demand, and the competition.

LinkedIn advertisers never pay more than their bid for a click. Since the auction’s winner pays $0.01 USD less than the next highest bid, businesses must be careful when setting this amount.

Different Types of LinkedIn Ads

There are 4 main types of ads on the LinkedIn platform:

  • Sponsored content.
  • Text ads.
  • Sponsored InMail.
  • Dynamic ads.
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LinkedIn Dynamic Ads

Depending on the model, the bidding options and costs change, as we explain below.

Sponsored content is the ads appearing in the audience’s newsfeed. They are the most common kind of ads on LinkedIn’s channel. They can be text, images, interactive carousels, videos, or job postings. It means they can apply for all kinds of bidding models, except the CPS which is specific to Sponsored InMail.

Text ads are display ad banners that show up on various locations of LinkedIn’s user interface. There are 4 formats: horizontal, long, tall, and square. For example, there are text ads on the right sidebar. Besides the text, we can display a 50×50 pixels image, but this is optional. Text ads are mostly useful for brand awareness and consideration purposes.

Sponsored InMail are messages that advertisers send directly to their desired customers. Most LinkedIn businesses use this to reach candidates or inform them about industry events. Each user can receive such ads once every 60 days, to avoid overwhelming them. By its nature, sponsored InMail is the only ad type having a CPS model.

Dynamic ads use LinkedIn members’ personal information to target them more accurately. They appear on the right-hand side of the member page and can be removed. They are valuable at establishing brand-client trust.

Average Costs of a LinkedIn Ads Campaign

LinkedIn ads costs depend on a lot of factors. We listed a few of them above. There are more below. Before we dig into details, here is the first list of average costs for LinkedIn ads:

  • $0.1-0.2 USD per view.
  • $3-5 USD per click.
  • $5-20 USD per 1,000 impressions.
  • $20-50 USD per message.

Businesses must take those averages carefully as they strongly vary based on these factors:

  • Country.
  • Industry.
  • Audience seniority.

For instance, the CPC is three times more expensive in the U.S. than in Vietnam. We also notice, for example, that running LinkedIn ads in the technology field implies higher costs than in education.

Target users’ professional level also impacts the fees. Senior people may be up to two times more expensive than juniors for companies willing to reach them.

To control this variance, companies should use the forecast results available in the LinkedIn Campaign Manager. It anticipates the ad costs based on the targeting options selected. It also provides estimations on the campaign metrics and Key Performance Indicators (KPIs).

Keep in mind that, depending on the industry, a cost per lead can be as low as $1 USD or as high as $100 USD. Before running the ads, make sure to have a clear idea of what cost would imply a successful campaign. For example, a Cost Per Lead (CPL) of $100 USD is acceptable if your average basket is $400 USD.

To make estimations on LinkedIn ad costs, businesses must also anticipate the Click-Through Rate (CTR). Having 10,000 impressions does not mean that 10,000 people will click on your ad and enter your sales funnel. 10,000 impressions certainly do not mean 10,000 sales.

With sponsored content, advertisers can expect a CTR of 2%. It means that, for 10,000 LinkedIn members viewing the ad, 200 of them will click on it. This ratio increases with popular brands and companies.

The Click-Through Rate is much lower for text ads, at around 0.05%. This makes 5 clicks for 10,000 impressions.

InMail messages have a high open rate with businesses experiencing a nice 50%. After that, depending on the offer’s attractiveness and the Call-To-Action (CTA) button, the CTR is about 3%.

Once the LinkedIn user reaches the landing page, the conversion rate (for example on the company website) is somewhere around 5-6%. Make sure your estimations are realistic to anticipate the campaign’s performance.

There is a minimum budget amount to run ads on LinkedIn:

  • $2 USD (minimum bid for 1 click).
  • $10 USD (minimum daily media spending).
  • $10 USD (minimum campaign lifetime budget).

Based on experience, it is hard to run a successful campaign on the LinkedIn ads platform with a monthly budget of under $2,000 USD. Consider investing $5,000 USD per month to see reasonable results. For shorter campaigns, never go for below $250 USD which should be a bare minimum.

Launching LinkedIn Ads

The steps to run ads on LinkedIn are like the other media channels:

  • Set campaign objectives.
  • Choose the ad type.
  • Set audience targeting.
  • Define a budget.
  • Upload the ad content (text or visual).
  • Launch the campaign.
  • Follow up, measure, and optimize.

On the LinkedIn ads platform, businesses set the ad frequency (which is the average number of times a LinkedIn member sees the same advertisement) at around 1.5 to 1.8. The best audience size is somewhere between 50,000 to 400,000.

The LinkedIn Campaign Manager allows specific professional targeting options:

  • Country and location.
  • Industry.
  • Company name and size.
  • Job title and function and seniority.
  • Education.

By selecting the most relevant ones, companies should find the right balance: not too broad and not too narrow. A broad audience results in wasting the budget to target irrelevant people. A narrowed audience means the advertiser applied too many filters.

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Launching LinkedIn Ads

Media Spending Optimization on LinkedIn

LinkedIn ads can be a powerful tool to reach potential customers or clients, but if not managed properly, the costs can quickly become unmanageable. Fortunately, there are several strategies you can use to effectively optimize LinkedIn ads costs.

LinkedIn Ads Costs | General Rules to Know

Firstly, it’s important to set clear goals and objectives for your LinkedIn ad campaign. Determine what kind of return on investment (ROI) you’d like to see from your campaign before you begin setting up your LinkedIn ads. This will help ensure that the campaigns are built with measurable goals in mind and that their performance is evaluated accordingly.

Also, consider targeting specific LinkedIn audiences rather than broad demographics. Targeting allows you to create tailored messages for different types of users, potentially increasing click-through rates and conversions. LinkedIn also offers campaigns that are directed at specific job titles or industries, which can be effective in reaching the right people with your message.

Finally, consider using LinkedIn’s A/B testing feature to optimize your LinkedIn ads costs and better understand how users interact with your ads. This allows you to test different versions of an ad and compare their performance metrics before launching a full ad campaign. By running A/B tests and analyzing the results, you can make more informed decisions about the best way to structure your LinkedIn ads for maximum impact.

By following these guidelines and taking advantage of LinkedIn’s features, you can cost-effectively manage LinkedIn advertising campaigns and ensure maximum ROI from your efforts.

Prodima Pro Tips to Optimize LinkedIn Ads Costs

Prodima Vietnam has long expertise in running ads on LinkedIn. From hundreds of campaigns, we recommend the following hints to optimize media spending on LinkedIn:

  • Post organic content daily.
  • Test ads (A/B test creatives).
  • Rotate ads monthly.
  • Design visuals with human people.
  • Run promotional and discount ads.
  • Give away something for free.
  • Polish your landing page.
  • Meet LinkedIn members’ needs.
  • Use the LinkedIn retargeting tool.

There is no direct correlation between the organic posts and the ad copies. Despite this, we noticed that advertising tends to perform better for brands that have consistent publishing on their business profile. Looking genuine makes the difference.

We will never insist enough on the necessity to A/B test the content and visual creatives. Companies may have good results with one text copy, but if they do not try variations, they will never know if changing the wording would improve their campaign.

Ads fatigue quickly on LinkedIn. Businesses should never run the same ad for more than 1 month, even if this advertisement is successful.

Images including real people, especially human faces, always do better than those having a company logo or generic design. Go photo shooting or use image stocks to reduce your ad costs.

LinkedIn users are the same people that go to social media such as Facebook. Everyone is offer-sensitive. Ads mentioning promotions or discounts always look more attractive, and so get higher engagement, which reduces the campaign’s cost.

Following the logic above, free offers get huge members’ attention. It can be a valuable resource (document, video) or a one-time giveaway with limited time. The feeling of urgency is powerful, in the ad campaign world.

Companies using landing pages, such as a website’s destination Uniform Resource Locator (URL), should invest in having good design and content. An appealing and relevant landing page increases the ad relevance score.

Market surveys help understand the target audience’s expectations. The LinkedIn platform is a professional environment where it is usually hard to meet members’ needs. Doing so significantly decreases ad costs.

In 2020, LinkedIn introduced a new retargeting and audience network tool. It reaches audiences who have interacted with previous ads. For example, a feature serves sponsored ads based on past video views or time spent on lead generation forms. If the user reached a certain duration, LinkedIn would target him. This tool increases the conversion rate and consequently decreases the LinkedIn ads costs.

LinkedIn Expertise

LinkedIn is one of the most professional network channels in the world. On this platform, advertisers recruit new talents and brand their products and services as well. For this, they focus on senior employees, company top executives, and decision-makers.

This targeting comes at a cost. LinkedIn ads are around ten times more expensive than Facebook ads. On the other hand, the leads’ value is higher and they are more likely to generate quality conversions.

Prodima Vietnam is ready to share expertise on the subject. If you need to run LinkedIn ads, contact us so we craft a digital strategy to get the best out of your ad campaign.