Welcome to the LinkedIn Ads Show.

Resources for this week:

Budget tracking software: shape.io and adstage.io

Chart of how LinkedIn bidding works: https://www.dropbox.com/s/co4fxjg04uy1d67/Economics%20of%20LinkedIn%20Ads%20Bidding%20Slide.pdf?dl=0

LinkedIn Learning (Lynda) Course: http://j.mp/linkedin-ads-course

Contact us at [email protected] with ideas for what you’d like AJ to cover.

 

Transcript:

How to manage your bidding and budgeting strategies on LinkedIn for the best performance. Stick around.

Welcome to the LinkedIn ad show. here’s your host, AJ Wilcox.

Hey there LinkedIn ads fanatics, I get asked all the time about bidding and budgeting on LinkedIn ads. So I know there’s a lot of confusion around the topic. We’ll talk today about how you should bid with each of the different ad formats for the best performance, as well as different strategies based on whatever kinds of objectives you choose. Let’s hit it. Okay, first, a little bit of news. I’m fresh back from a slate of meetings with the heads of product at LinkedIn, and I’ve got some things to catch you up on, especially considering in Episode 03, we talked about some of the roadmap stuff coming out. Alright, so number one here is the integration between Sales Navigator and LinkedIn Campaign Manager, that I was so excited about, is officially dead. This is called Project Stereo. And if you don’t remember, this was where you could have sales reps who use Sales Navigator tag individuals to be placed into an advertising audience within campaign manager. And this is unfortunately for whatever reason it got cut. And we have, you know, two different clients in this beta, it tends to work really well. So those who are currently in the beta apparently can still use the integration, at least as of the time we tested last week, but it won’t be rolling out to everyone, like we mentioned in Episode 03 in the roadmap section. Unfortunately, this is something that I think a lot of people were hoping for. I also heard from one source that LinkedIn sponsored content frequency cap has changed a little bit. So it is normal with sponsored content that you will only show one ad to each member per 24 hour period, and it’s a it’s a one in 24 hours type of thing. And then If you put at least four ads into a campaign, it used to become eligible to be shown four times in 48 hours. And from one source, this may or may not be a rumor, I’ll still have to confirm it, but one LinkedIn employee told me that it’s now five times in 48 hours. So if your goal then is to get as many impressions as quickly as possible, what you’ll want to do is put four ads into a campaign rather than the two that I normally recommend. And then you’ll theoretically be able to show to the most active members five times every 48 hours. And then the last one here is Engagement Retargeting. We mentioned how it was possibly coming out in March. What I found out is that the closed beta is actually starting in April. So this pushes us out a little bit. I was really hoping that this would be going out to the general audience in March, but closed beta starts in April. So if you have a LinkedIn rep get talking to them now, but realize it is a very competitive beta, probably because this is functionality that everyone wants. So it may be difficult to get your company in unless you have a really influential rap internally. So it probably won’t be until October when it goes out to everyone. But stay tuned, I’ll give you updates there.

3:13
Okay, now on to bidding. There are five different bid types on LinkedIn ads. And we’ll go through just simple definitions of each. The first is CPC, which is what I recommend most of the time, it stands for cost per click. And it’s essentially when you know a different objective will have a different definition of what a click actually means. But cost per click bidding, you are only going to pay when someone takes some kind of definite action on your ad, which is pretty great. Most of the time, that’s a click to your website, to a landing page of yours, but that can differ as well. The next we have CPM, which literally stands for cost per mil, which means cost per thousand. That’s how we interpret it here in advertising. That’s when despite how many people click or not, you’re going to pay just for every thousand times that LinkedIn shows your ad. Then you have an automated bid type, which all it is, it’s just a fancy version of CPM. This is where you’re paying per thousand impressions. You’re not paying per click on automated, but it’s one that you don’t really have to babysit, you don’t actually set a bid, it just tries to maximize whatever your objective is. Then some specialty ones you have CPV or cost per view. This is only applicable when you’re running a video views campaign. And this is one you probably want to bid low on. You want to pay the least amount per video view possible. And then the final one, you have a CPS or cost per send. This is only applicable when you are running a we used to call it sponsored in mail, I believe they’ve now called it message ads, where it’s a cost per sending the initial message. Alright, so let’s hop into the different objectives and maybe a suggestion about how you should consider bidding, If you’re running a website visits objective, website visits, what it is, is you’re saying I only want to pay per click when someone actually clicks to go to my landing page. It’s named a little bit funnily because they’re calling it website visits. But really, it should be website clicks, because it’s possible for you to get charged for that click when someone clicks on your link, but they don’t actually end up registering on your landing page. If your site takes too long to load, or they change their mind while they’re waiting for it to come up. It doesn’t actually result in a session as recognized by your analytics. You can bid website visits either as a cost per click, which would be a great default place to start. You can also change that to a cost per thousand impressions, a CPM bid. Now the way you want to optimize this, especially this is great for sponsored content. You want to bid cost per click, until you are at least two and a half times the benchmark average of whatever that ad format is. So with sponsored content, you’re around a point 4% click through rate as benchmark. And so this really starts to make sense when you get above about 1%. It’s actually closer to, it’s actually usually between about 0.8% to 1%, depending on how competitive that audience is. So above that, you want to bid by cost per thousand impressions because that’s the cheapest way to get your effective cost per click. If you do bid by cost per impression, you don’t want to take my strategy of bidding low on CPC, you want to actually bid high on CPM. The reason why is because the higher you show up in the newsfeed, the more likely you are to get a high click through rate. And that’s the reason you are bidding CPM is because you had a high click through rate in the first place. If you’re uncomfortable with kind of switching your bids around trying to find that magic area, you can choose auto bidding here and that’s a really easy, don’t even need to babysit it kind of way.

6:58
All right. Next, we have the what I call the legacy website visits objective. So if you have an account, and you had built website visits campaigns back before, like, I want to say November of 2017, you will have created some legacy website visits campaigns in your account. And you could actually go and rename them, change the targeting, and still preserve this, but you can’t create these fresh anymore. The way that this worked is it was just like website visits now. You only paid when someone actually clicked on either the link in the intro or to go to your landing page. And it was about 35% cheaper than website visits are currently. So I still like to if I have a client who is bidding anywhere near the floor, I like to revive an old legacy website visits campaign so that I can take advantage of the floor price being 35% lower These can be bid exactly the same way as current website visits. So you’re going to be able to bid by CPC or CPM or auto.

8:09
Okay. Next one you want to know about is the engagement objective. So engagement is really interesting for a few reasons here. You pay per click for any click on that ad format. So if someone clicks on the company page, then you’ll pay for that click. If someone clicks the button to follow your company page, you’ll pay for that. If someone clicks, like, comment, or share any of the social actions, you’ll pay for that as well, as well as if they click to go to your landing page. So this actually doesn’t sound like a great deal, does it? You’re paying anytime someone clicks on the ad. Well, here’s my little challenge here. I really like engagement objective, again, because it’s priced actually like the legacy campaigns, which means it’s 35% cheaper than website visits. So if you take a look at your current website visits objective campaign, and fewer than 35% of the clicks are coming from social actions, let’s say the call to action is Click here to download this white paper or something like that, then it’s actually a better deal to run an engagement campaign that is pushing people to your asset because you could get it priced, like legacy website visits. So that one’s worth a try just to make sure that you’re not missing out by paying more for a website visits objective.

9:34
Alright, next is lead generation objective. And what this is, is this is any sort of campaign that’s attached to a native lead generation form, which again, it’s like Facebook lead ads, a form comes right within the ad, and someone can have an opportunity to convert without ever coming to your website. You can skip the whole landing page experience altogether. And these can be bid on also buy cost per click or cost per impression. Nothing super strange there, except when you do run these as sponsored messaging or message ads sponsored inmail, I’m going to trip over those for quite a while here, then you can pay by a cost percent there are I think that’s really your only option. So lead generation, it’s, you’ll know, anytime you’re using this objective, it’s because you want to use that native form integration. And there’s really no trick here. That’s your only option. And it’s quite good. We have probably 60% of our clients using lead generation. Alright, next we have the conversion objective. Now, I should mention this is exactly the same as website visits as an objective. It’s priced the same way. And what it is, it’s just like the old if any of you remember back before objectives, when you had a website clicks campaign, there was a little checkbox that said I want to optimize towards conversions. It’s just the like that. It’s a website visits campaign where LinkedIn is purposely trying to show your ads to those that they think are most likely to convert. And after the break here in a little bit, we’ll talk about how LinkedIn gets this data and how they can successfully optimize.

11:15
Alright, next objective here is video views. The video views objective is really where you have to use a video as your creative and you can bid either by a cost per view, or cost per impression. And so the best way I found is to bid low on cost per view. But if you end up with a click through rate that is significantly higher than the average like my two and a half times the benchmark is a good a good guide here, then it can be better to bid by impression, just like normal sponsored content. And there’s a little bit of a bonus here. You can run a website visits campaign with a video as the creative and then that will unlock the potential of being able to pay Per website visit, like basically paying cost per click on a video view campaign. And that’s pretty cool. So that’s three separate ways to bid for video views. And so what I will do is when I’m running, I’m trying to find the best way to price this, I will try bidding all three and just see whichever one gets me the lowest effective cost per click, then I settle on that one. So it’s a little bit more work, but I love that level of control.

12:26
Finally, there’s an objective called awareness. And my recommendation here is don’t use it. It’s the only option you have for bidding here is bidding by cost per impression. And so there’s no control or flexibility. It’s literally just a, I’m going to stick my bid up. And that’s it. So don’t use awareness. Instead, try to use engagement or website visits whenever possible. Okay, here’s a quick sponsor break, and then we’ll dive into the good stuff.

12:58
Thank you for listening to the link. Been edge hungry for more AJ Wilcox, take it away.

13:09
Alright, let’s jump into how LinkedIn optimizes towards your data. So the conversion pixel lead gen forms know when someone’s converted. So these are some signals that LinkedIn has to work with. And this is how they’re pulling in data and deciding how to optimize your campaigns. It’s important to understand that the conversion pixel itself is I kind of question how well LinkedIn can optimize towards conversions from the conversion pixel. Because this data has only existed since 2016. If you remember from our our history of LinkedIn ads, Episode 03, and it relies on the advertiser having set them up correctly, or even bothered to set them up at all. And I would say half the advertisers I’ve consulted with have some kind of issue with their conversion audience being set up properly. So I don’t know it at least right now, there’s not a ton of data in my mind around the conversion pixel. Ah, but lead forms, the lead forms are totally different. Because LinkedIn sees right on their own platform. Anytime someone opens, whatever they type and, when they submit. So this is probably much better for them to optimize towards. If they know that a member has submitted multiple lead forms, they know that they can be put in this category of likely to convert. So this probably is pretty good, but I would say not many members on LinkedIn have interfaced with it. And that’s relatively a number like probably millions of people have. But it’s because they’re really only a couple years old. They came out in 2017. And I’ll mention Facebook ads has had these lead ads for a long time. And even their engineers recommend only running conversion optimization campaigns on an ad set that has had at least 50 to 100 conversions per week to optimize properly, but there’s enough data. And I can literally count on two hands, the number Advertisers that are spending enough on LinkedIn to get 50 plus conversions per week. So certainly I think this is worth testing into. But for me, it’s been a coin flip as to whether the CPLs that you get from turning this optimization on or off, whether they fall or rise. So certainly, I would say, try running for a week or two without maybe as like a website visits type of campaign, then try pausing that, launching a conversion focused objective campaign with the same ads and everything for another week, and then just see, did your CPS go down? Or did they go up, and that can give you a clue as to what you should continue using in the future.

15:41
Alright, so how does bidding work? On a future episode, we’ll go into way more depth on bidding. But basically, this is how it works. LinkedIn looks at your click through rate to determine what your relevancy score is. And it’s hard to understand because what your click through rate is compared to your competition is something you can’t see, but the way I do it is just basically according to benchmark. So I know if the benchmark is 0.4%, click through rate for sponsored content. If I come in with with a click through rate of like 0.6%, I can say, yeah, I’m probably comfortably over the average, I probably have a relevancy score slightly higher than average. Alright, and then your relevancy score is determined by LinkedIn according to how your ads get clicked on versus your competitors. And so they take your cost per click bid, and they multiply it by your relevancy score to give you an add score for how you enter the auction, and then whoever’s add score is higher wins the auction. Cost per thousand impressions. bidding is a little bit different. I don’t believe that relevancy score plays as large of a role. It takes the risk out of it for LinkedIn when you bid CPM because they know as long as they show, their ad they’re getting paid. There’s no like, hey, what are the chances of this one getting clicked so we can get paid. And then auto bidding is just the same like we talked about. It’s the same as CPM. It’s just one word it can change your bidding based off of however it feels that it’s going to be able to hit your objectives. So if you are bidding CPC, I generally recommend bidding low. And by low, I mean, significantly below the suggested bids. And this is if you have a small budget, one that you could pretty easily spend, then bid really low, maybe even down to the floor. And again, we’ll talk about this in a future episode. If you have a large budget, though, chances are you won’t be able to spend it at minimum bids and so you’ll have to consider raising and even with, let’s say, large budgets, or even if you just have small audiences, you may need to bid up to the recommended bid and sometimes even higher, depending on how you want that audience to see your ads. From our experience, we know that we probably can’t can’t fill a whole budget with traffic that is just bidding the very floor if someone’s spending more than about $10,000 a month. But if someone’s spending $5,000, $7,000 a month, chances are pretty good that we can probably spend their whole budget just bidding all the way to the floor. And that’s the way to get the best cost per. So I’ve heard people talk about a strategy. And this is actually something I used to do. How about bidding high to start out with to show LinkedIn that you’re all in to try to get rewarded with a high relevancy score, and then backing it down over time. Doing this, you can actually pad your relevancy score, but I don’t tend to recommend it much anymore because of how much wasted money happens during that that first initial period of high bids. Usually, what happens is you’ll have a lowish type of daily budget, and you’ll maybe spend, you know two, three clicks worth and then it hits your budget for the whole day and you’re done. You’re out of the auction. So it’s really difficult to explain for us to explain to a client why we only got two clicks for the first couple days because we were trying to pad their relevancy score for the future. So I don’t suggest doing it, but you certainly can. Relevancy score will eventually shake out from my experience. Even if you’re bidding really low, LinkedIn will still give it a chance, usually over the first 24 to 36 hours. You’ll have plenty of impressions to prove that out. And if not, if your ads are actually okay, but LinkedIn just didn’t give them a shot, I would just relaunch exactly the same ads. Not the same exact ad, but you go and create the ads from scratch. LinkedIn doesn’t know that they’re exactly the same ones as those that got a poor relevancy score, and ended up just failing miserably. You can start from scratch, use the same exact ad copy and give them another shot. If they fail two or three times in a row. Oftentimes, that just means the ads themselves were no good, people didn’t like them, and you probably want to try something new anyways. But if your ads are good, and your audience is tightly targeted, performance should be good and you shouldn’t have to try to pad the algorithm or trick it into giving you a higher relevancy score than it would normally have. All right, let’s talk about budgeting. So I think this is really a misconception in a lot of people’s minds. Your budget is really just a safety net, that shuts your account off and takes you out of the auction. It’s important to understand that it doesn’t affect your efficiency at all. If you hit your budget during the day, your campaign essentially just stops bidding. You drop out of the auction. And that’s it. It’s a safety net to make sure that you don’t get fired because you way overspent your your monthly budget during day three. It will spend up to 20% over your daily budget. So if your job is on the line, based off of hitting a budget exactly, then you’ll probably want to set your daily budget, maybe 10% under where you’re comfortable with it. My recommendation, at least at the beginning of a campaign, is to set your initial daily budget really high so that you can get it out of the way. Because if you find that your your campaign reached its daily budget during like, let’s say the first half of the day, and then you’re out for the whole rest of the day, it probably means you, you paid too much for your clicks. And definitely watch throughout the day, and try to analyze what time of day are you hitting your daily budget if you are hitting it? is it happening in the morning? is it happening the night before, because LinkedIn uses the UTC time zone. So your campaigns are all going to turn back on. You know that the night before the actual day starts if you’re in the negatives of time zones, and if you are hitting it during the day at all, basically before nighttime, try lowering your bids, or you could raise your budget if you have the budget, but I’m not telling anyone that they should weigh overspend. And you can actually check to see if you’re hitting your daily budgets by going to the performance chart option. So if you hit performance chart for any individual campaign, it’s just the button there at the top of campaign manager, and you turn it to total spent as your metric. If you will see a flat line like a flat top that tells you a flat line that is right at your daily budget. So if you have let’s say $50 per day budget and you see that you’re you’re spending exactly $50 every day, that’s your first clue you are hitting your your daily budgets during the day, and I use this nice little rhyme you know, it’s true because it rhymes. If you hit your daily budget during the day, it means you paid too much for your clicks along the way. So use that as a guide. Definitely don’t hit your daily budgets, unless you have set your budgets high to begin with, you’ve tested by lowering your bids, raising them only until you are spending as much as you want, and then you can lower your daily budget cap down to basically be a safety net just so nothing crazy happens.

23:05
So you might ask about budget projection, because this is so hard on LinkedIn, a lot of people really are just screaming for, hey, how do I do this? How can I actually predict where my budgets going to be? And and there’s a really simple way to do it. I have one employee who for his clients, he just does this. He goes, how much do I spend each day on average, and then multiply that by the number of days left in the month? Add that to what you’ve already spent, and boom, you have a simple projection of, hey, how much am I trending to spend? Then there’s one that’s a little bit more complex, where you look at it and say, hey, my weekend days and my weekdays spend a little bit differently. And so I’m going to say, hey, maybe holidays and weekends will spend like a half a week day. So you can do some simple math figure out how many weekdays weekends are left. It’s a little bit more complex, but a little bit more accurate. Then you have what I would call the insane version of budget projection, which is calculating your average spend per week day, your average spend per weekend, and then you solve for a projected amount. This is something you can spreadsheet out. We use Google sheets for this. And it’s a little crazy. But you can figure out how much you are supposed to be spending, how much you are projected to spend, and then look at your actual goals and see if you’re behind trend or above. If you’re behind, you can increase bids or increased budgets. If you’re ahead, you can slow things down by hopefully reducing your bids first. That’s the easiest way. There are some tools out there that can help you. So there’s a tool called shape.io that will link to here and the resources. And its whole purpose is to keep track of the spend on your accounts for you. It integrates with LinkedIn also integrates with Google, Facebook, and the rest. This is great for agencies because you can always make sure that it’s tracking and sending you alerts if you’re trending higher than normal. There’s also ad stage.io that has the ability to track your budget and show you a really cool visualization based on how you’re doing. So that’s cool. I recommend probably both. We even have super metrics feeding into a spreadsheet to help us do our projections. Like I mentioned the insane version on Google Sheets. Alright, I’ve got some great resources for you coming right up after this break. So stick around.

25:30
Thank you for listening to the LinkedIn ad show. Hungry for more? AJ Wilcox, take it away.

25:41
Alright, so I’ve got a couple of great resources for you. First of all, the tools that I mentioned previously for budget tracking are shape.io and adstage.io. So check those ones out. I also am going to put in the show notes, a chart of how LinkedIn bidding algorithm works from something that I put together and I It’s in the presentations when I give public speaking and training about LinkedIn ads. So I’ll include a link to that. So you can visualize, you know, where do I bid based off of where my click through rates are. I also have a video that I did with Social Media Examiner that I hope is live by the time this podcast goes live. So I can link to that. So stand by there.

26:21
Also, I should mention, I have a course that I did with LinkedIn learning or lynda.com. And I’ll put the link to that. That is really the basics. I mean, if you came and hired me for, you know, $500 an hour to come and train your team, the first hour and a half of that would essentially be exactly what you could get in the LinkedIn learning course, about LinkedIn ads. And I think it’s only $25 if you buy it straight out, or if you have LinkedIn premium or something, it’s totally free. So I’ll link you to that. If you’re new to LinkedIn ads. That’s definitely a course that’s worth taking. Also, please, please please, if you’re hearing this for the first time, hit the subscribe button on whichever podcast you’re using and then I would also recommend that you rate and review this podcast. Please Please, please reach out to me at [email protected] with any feedback you’ve got for the show. Let me know any future episode topics that we should include. Reach out and let me know that you’ve rated and reviewed the podcast because that just means the world to me, especially while we’re still so so new. And with all that being said, I will see you back here next week. And I’m cheering you on and your LinkedIn ads initiatives. Thanks so much.