Ep 126 - LinkedIn Ads: What's the Ideal Budget for My Campaign?
SHOW RESOURCES
Here were the resources we covered in the episode:
DoubleVerify says 99% of LAN traffic is valid
Bidding/Budgeting Deep-Dive Episode
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SHOW TRANSCRIPT
How much should you budget for your bright, shiny, new LinkedIn Ads campaign? That’s what we’re covering on this week’s episode of the LinkedIn Ads Show.
Welcome to the LinkedIn Ads Show. Here’s your host, AJ Wilcox.
Hey there, LinkedIn Ads fanatics. As he said, I’m AJ Wilcox. I’m the host of the weekly podcast, the LinkedIn Ads Show. I’m thrilled to welcome you to the show for advanced B2B marketers to evolve and master LinkedIn Ads and achieve true pro status.
The topic of today’s episode is a question that I get at least weekly. It comes in many different flavors, but boils down basically to what’s the ideal budget for my campaign?
You might be wondering this about how to set the daily budget for a new campaign. You might be wondering about how to set the budget for advertising, let’s say, an upcoming event. Or maybe you’re just wondering, how do I budget for my LinkedIn ad spend period?
We’ll cover all that.
The LinkedIn Ads Show is proudly brought to you by B2Linked.com, the LinkedIn Ads experts.
B2Linked is the ad agency 100 percent dedicated to LinkedIn Ads, and we have been ever since 2014. You know, back before it was cool. We’ve mastered the LinkedIn Ads platform, and have figured out how to get you the very best traffic at the very lowest costs. Which, on a platform that charges a premium like LinkedIn, is the best way to increase your ROI. We’ve built reporting capabilities that even LinkedIn themselves don’t offer, so we can provide our clients the very best insights. If that sounds good to you and you want to explore working together, schedule your free discovery call at B2linked.com/discovery.
All right, first off in the news, we got a little bit more information about the European economic area and Switzerland changes that I talked about on the last episode. LinkedIn said, you may notice fewer conversions reported based on how we apply modeling to report conversions for members residing in the European Economic Area and Switzerland. Or if they use certain targeting facets, such as inferred targeting or retargeting from the company page visits and events, they may observe decreased audience sizes that could result in changes to ROI. The changes you observe are a reflection of members in the EEA and Switzerland who have either not yet engaged with the new consent experience or have chosen not to connect their marketing solutions feature to their core LinkedIn experience. The impact is highly variable based off of consent rates, targeting usage and behaviors, budgets, and more.
So all of this goes to show that if you’re targeting the European Economic Area and Switzerland, which I’m imagining is Switzerland plus anywhere that uses the Euro, if I’m not mistaken, then you may see your conversions numbers be affected here. Personally, I absolutely hate modeling for conversions. I would be absolutely embarrassed to report to a client if I said we got six conversions and they look in their CRM and see only four, and then all of a sudden I look like a liar. So be aware of these changes so that they don’t make you look like a liar.
Next one’s really interesting. You’ll see a link down in the show notes below to an article that LinkedIn wrote about trusted experiences for advertisers. They talk specifically about LAN, or LinkedIn Audience Network Traffic. Now, if you’re like us, you may have questioned the validity and the effectiveness of LAN traffic.
Well, LinkedIn did a study with DoubleVerify on LAN traffic. DoubleVerify determined the traffic that comes from LAN to be 99 percent valid. I don’t know how I feel about this, so I’m calling out to all of you. Have any of you done in depth analysis of your LAN traffic? Please reach out, let us know what you found. I’m curious specifically about, do you agree with this stat? Does the traffic all look real and human? Do you see any effective possible bot or spam traffic? Please let us know. Reach out to us at Podcast@B2linked.com. Or you could reach out to me personally on LinkedIn in my DMs, my DMs are open.
Now the same rule applies. I want to hear from you no matter what you have. If you have a question for us on the show or a review of the podcast or feedback on anything we’ve talked about, feel free to send it over as a message on LinkedIn or email us at Podcast@B2Linked. com. But one thing I would love for you to do, we’ve done this once so far, is I’d love for you to attach an audio file of you either asking this question or giving this feedback. And I would love to play them right here on the show. I’m happy to keep you anonymous or share your details and shout you out. So go ahead, record yourself giving any of this feedback or asking a question, and I’ll aim to include you right here in the show.
Okay, onto the subject at hand. Let’s hit it. So how do you set a budget for your campaign? Well, there are three different kinds of budgets that you can set. There’s a daily budget, which is my absolute favorite, but there’s also a lifetime budget and a daily and lifetime budget.
So, when you do a daily budget, what you’re doing is you’re telling LinkedIn, I’m going to run this campaign forever. Now, you don’t actually have to run the campaign forever. That’s just the expectation here that you’re setting a daily budget. And when you don’t want to be spending that anymore, you’re going to go and shut the campaign off.
Since I live in the LinkedIn Ads platform, I’m always here. Of course, I’m going to see something and be able to shut it off. So, I prefer these daily budgets. But you might be in the situation where maybe you don’t live in the platform. Maybe you want to set a budget that once it’s used up, LinkedIn automatically shuts the campaigns off.
You can do that with a lifetime budget. So you could say something like, I only want my campaign to spend $3,000 and then shut off. Then you would set a $3,000 lifetime budget. Now one risk that you could run into, what if you set this lifetime $3,000 budget, but what if that $3,000 budget is all spent in one day? Would that be okay with you, or would that put your job at jeopardy? You never know. So that’s where this third option kicks in, is what if you could set a daily budget to make sure that it paces out over the speed that you want it to, plus a lifetime budget.
So you might say, I have a daily budget of $30 and a lifetime budget of $3,000. And if I’m doing the math correctly, this would mean that your campaign could run for about 100 days before running out of budget. And this could be nice if this is something you want to run for a quarter or something like that.
Alright, so let’s say that you’ve determined what kind of budgeting you want to do, whether it’s daily or lifetime or a combination of the two. How much your campaign is going to spend is totally dependent on five things.
And not all of those five things. Do you really have control over, or you might not know about. So first off is audience size. As you create a campaign, LinkedIn is going to tell you what your audience size is. So that’s great. This is something that you can actually plan around. If you have a very small audience, like 300 to a few thousand people. Or if you have a very large audience, like a million or more, that’s going to give you a clue as to how much this campaign can spend.
The next piece though is something you don’t have control over, which is your audience activity level. Because the inventory available on LinkedIn for ads is highly dependent on how often that audience comes to LinkedIn and how much time they spend on LinkedIn. So you could have this giant audience of 4 million people.
But it spends next to nothing because who you’ve selected, let’s say it’s mostly retired people. They don’t spend their time on LinkedIn. And so it’s, they’re not going to come back, create inventory for you to advertise it. Conversely, you can have a very, very active group. Let’s say it’s a 2000 people, but they are very active on the platform. Come back often and create a lot of ad inventory. And now all of a sudden you have this 2000 person audience. that is capable of spending more than a 4 million person audience
So obviously an extreme example, but keep this in the back of your mind that so much of the performance is going to come down to the audience activity level, and that will be the, we’ll call it the average activity level of this audience.
But how much you spend is also going to be determined by what you’re bidding. That’s number three. So we’ll spend a little bit of time talking about that. But essentially, if you are bidding really aggressively, you’re telling LinkedIn every time one of these people comes online and is capable of being shown an ad, I want mine to be there.
So you can do that and say, even though this is a small audience, I want to get the very most out of them and you can bid high to do that. So that is within your control.
Budgets are number four. That’s also within your control. And we’re going to talk a lot about that. I’m going to give you specifically a walkthrough of here’s how I adjust my budgets over time.
But number five is something that if you haven’t launched yet, you won’t know. And that is the engagement rate of your ads. Because if you have exactly the same audience, with really terrible performing ads and really great performing ads, you’re going to have very different experiences. It could be the same audience, the same bids, the same budgets, but if you have a really bad performing set of ad creative, let’s say click through rates are in the, like, .2% to .4%, you’re going to have a really hard time spending budget. Whereas if you launched ads that have like a 1 percent click through rate or higher, then it’s going to be no problem getting that out of an audience.
So those are the five things that determine how much a campaign can spend. Your audience size, your audience’s activity, your chosen bid or method of bidding, your budgets that you’ve set, and the engagement rate of those ads.
Now, there are a few different methods here for how you can set a budget and work towards it. The first is my favorite, and this is what I would call an economical approach. This is where you want to spend the right amount for the campaign and not overpay for access to that audience.
The next though is an accelerated approach. This is where you may need eyeballs on this stat or you have a high budget that you need to spend on something or you’ll lose it.
And then of course we have to mention there is a third approach, which is arbitrary, which is my boss told me I have X number of dollars for this campaign. And whether it’s economical or accelerated, that’s what I have to use.
All right, so like I mentioned, economical is my favorite. Now, the economical approach is my favorite, and that’s because LinkedIn ads is a really expensive platform. But over the last bunch of years testing, I’ve figured out through my last 13 years of testing everything I can think of on LinkedIn, I’ve figured it out. I figured out what the equation is to spend the least amount possible on LinkedIn and still get the best traffic.
So that’s what I’m going to present to you today. If you have prior experience with an audience, you have a big advantage here. It’s those five things that determine whether your ads are going to spend their, their budgets or not. And if you know any of those five, or let’s say you know most of those five, you’re going to be a lot more accurate with your estimates and start in a better place. But if you don’t know your audience activity level or you don’t know how your ads are going to perform, you really have to start somewhere. Since most of the advertising I do is in North America, which is by far the most competitive area of the platform, then I’m going to share with you some of these. But if you are advertising in less competitive areas, then Feel free to drop some of these numbers and not have to bid and budget so high. So what I might do, if I have to start somewhere, I’m probably going to start with something like a $20 per day, daily budget, linkedIn will allow all the way down to a 10 per day budget, so feel free to adjust, but I like $20 as a daily budget minimum, because if traffic is going to cost like $10 to $16, I want more than just one click per day.
And then I’m going to start with a very low cost per click bid. In North America, I call that $7. If I launched with $7 as a bid. I would say it’s kind of rare where I find out I can pay less than that. Most of the time I have to bid it up a little bit. That’s a good place to start finding the very best way to bid to get the best traffic at the lowest costs.
So what you do is you launch your new campaign and your new ads on first thing on a Monday morning, if you can. What I love about this is that you’re going to be evaluating the performance of this campaign. Over the next many days. And it’s so nice to have five business days all back to back to evaluate because business days act differently on the platform than weekend days. So I’m going to launch on Monday and then on Wednesday, I’m going to go take a peek at that campaign and I’m going to see, did it spend its full budget on Monday? Did it spend its full budget on Tuesday? If yes, I’ve got a decision to make, I can decide if I want to spend more or if I’m happy with what I’m spending and I want to just get cheaper traffic.
So let’s say I actually want to spend more. $20 per day is not what I want to spend. I actually want to spend considerably more. Well, I hit that $20 every day or both of those days or maybe just one of them. So what that tells me is I am with my current bid. I’m incentivizing LinkedIn enough to spend that full $20 or close to it.
So what I’m going to do is increase my daily budget. So let’s say I take it from $20 per day to 40, but I leave my bid exactly where it is. Then I’m going to let this go until Friday. And on Friday, I’m going to look and see what my performance was like. Did I hit my budget on Wednesday? And did I hit my budget on Thursday?
If it continues every day to hit the daily budget, I know I have to keep increasing my budget to find, okay, how much, with this current $7 bid, how much could I actually spend per day?
And every two days, every two business days, I’m going to keep raising that budget until I find out what that $7 bid is going to land me in terms of amount spent that day.
But let’s say that you just want to spend $20 per day. That’s how much you’ve been given or what you actually want to spend for pacing. Great. What you do is you find out, are you actually hitting that $20 per day? Then, okay, great. That’s what we want to spend. Let’s see if we can back our bids down. And see if we can pay less for our traffic.
Cause of course on LinkedIn, if you bid $7, you’re probably going to pay like six and a half or six and three quarters dollars. So what I would do is I would start every couple business days, lowering my bids by let’s say 50 cents to a dollar. And then two days later, I’m going to look and see, did I stop hitting my daily budget every day or do I keep hitting it? If I do keep hitting it, if I keep spending that $20 per day, I can keep lowering my bids every couple of days until I stop hitting it. That’s what I know, I’ve just made a change in my bid that caused me to not spend the $20 and I can always back it up or, find a bid kind of in between where I’m going to land closer to that $20. And of course the goal here is to find the lowest bid that spends your budget naturally. I’ve used this rhyme before, if you hit your daily budget during the day, it means you pay too much for your traffic along the way. That’s what we’re trying to find.
But sometimes you find that you’re not going to have a whole week of being able to test your traffic to find where that sweet spot is. Maybe you have an event coming up, or a budget that absolutely needs to be spent, or you lose it. Or maybe you just have a very small audience and you know that you’re likely going to have to bid pretty competitively just to get anything out of that audience.
Well, in an accelerated manner of spending your budget, there are two things that I suggest, two different ways to approach that. You could do this with manual bidding like we did before, but in this case, we’re going to start with a pretty aggressive cost per click bid. The way I like to do this is take a look at the suggested bid ranges that LinkedIn gives, and obviously, sometimes those are pretty crazy, but if you can see like, Oh, if my bid is in the upper half, or in like the 90 percent range of that bid, it’s probably going to be pretty competitive for this audience.
Now that’s my preferred way to do it, but the alternate route you could use here is using LinkedIn’s default bidding method, which is called max delivery. Now with max delivery bidding, LinkedIn is going to bid as high as it needs to, to spend your daily budget. Now remember, I’ve talked about on past episodes, maximum delivery is the most expensive way to pay for your traffic on LinkedIn, 90 percent of the time. The only time where maximum delivery gives you a lower cost is when your click through rates are significantly higher than the benchmark average. If your ads are in the news feed, the average click through rate is a little bit less than half of a percent. So it’s over 1 percent click through rates where all of a sudden max delivery starts to become a better deal.
So yeah, it can be more expensive, but one really awesome thing about using maximum delivery is that after you’ve used maximum delivery for a few days, you can take a look at your campaigns metrics and LinkedIn’s campaign manager is going to tell you what your average cost per click is. And that tells you likely about how much you need to bid to spend that budget, with the audience to spend the budget that you want. And of course, that’s taking into account the actual ads that you’re running and that audience’s activity level. Maximum delivery bidding is really insanely good at spending your budget.
All right, so we’ve talked about economical campaign budgeting. We’ve also talked about accelerated. Let’s talk about that third, the arbitrary. Now, if you just have an arbitrary budget to spend, you can really go either way on this. It’s kind of a mix of the two approaches. You need to ask yourself, how high is the budget that you need to spend, and how long do you have to spend it? If you don’t have very long to spend, you’re probably going to do more like the accelerated way of delivering and campaign budgeting. But, if you’re kind of in this for the long haul, I would do more like the economical approach, and, just spend your budget as it’s best going to be spent. I will tell you from personal experience, it is very rare if I have a budget that needs to be spent, that if I spend it really unintelligently, like, paying 25, 50 dollars per click. Chances are when we evaluate later, I’m going to lose that budget in the future. So I like the economical approach, even when we have to move fast, but you are, of course, free to campaign budget, however you want.
So, now that you’ve run this campaign, you can actually know what to expect in the future. So, let’s say that your audience has like 80,000 people in it, and your ads are getting like a .6 percent click through rate. And then you find out that you need to be bidding about 9 to spend your 3,000 a month budget.
Okay, that’s a lot of numbers. You don’t actually have to remember those. But, the next time that you actually go to set a budget for a campaign that’s similar. Let’s say it’s targeting a smaller audience. We’re going from 90,000 people down to 50,000. You can actually guess, based off of your previous performance of your ads, how high your bid needs to be to spend whatever budget you have. You now have really solid estimates for how this future audience is going to react.
Now, let’s say this 50,000 people is a totally completely different audience. Well, you won’t get to lean on your past performance. You’ll have to learn how the new audience is, how active they are, how they like your ads, that kind of thing. Now, if you have an audience that you actually know how they react, but you launch a completely new offer to them or drastically new ads, you’re going to have to learn how that audience likes those ads. It really is a lot of guess and check, and it’s based off of prior experience and a little bit of insight into how the platform works.
I’m always one who loves benchmarks. I love to be able to predict, but I will tell you, it is impossible to guess. Every new campaign that I launch, I will do my very best to say, Hey, this is about how active I think this audience is, so I think it’s going to spend this and it rarely does. It’s tons of guess and check.
All right, so moving away from budgeting for a specific campaign and moving towards, like, just how much do I need to budget for LinkedIn advertising in general? I’ll tell you, this is impossible to answer definitively without a giant, it depend. We have this so much in marketing, so I apologize, but I’m going to tell you what it depends on.
We do a much deeper dive into this on episode 89, all about bidding and budgeting. So I would highly recommend if you haven’t listened to that episode, or at least listened to it recently, go back and check it out. But here are some guidelines. LinkedIn’s average costs per click are in the 10 to 16 range. You’d need to ask yourself, how much traffic are you going to need to evaluate if something’s working? Or how much traffic are you going to need to push through when it is working to get the number of conversions you need, number of leads, or number of clicks? So if you think that you need at least 300 clicks, or visitors to determine if something’s working, then At 10 to 16 a click, then that means your budget needs to be between 3,000 and 4,800. But let’s say you don’t need that much traffic, or you have less of a budget available to you that you can’t afford $3,000 to $4,800. Well, then you can lower your budget, or you can spend that budget for longer, let’s say over the course of two or three months, to then evaluate. But I will warn you, if you don’t have the patience for advertising for multiple months, the same thing, not getting data super fast, I wouldn’t suggest advertising on LinkedIn with really low budgets. LinkedIn is a platform that really performs well with lots of money to spend and being able to learn very quickly. And so if you’re just kind of sprinkling your budget out there, you may not ever learn what it is you’re trying to learn. And you’ll probably not see the volume of conversions or traffic that you’re really hoping for a big result on. But if you are on really low budgets, if you haven’t listened to the last episode, episode 125, That’s where I lay out the $10 per day strategies. So go check that out. The by far the most efficient way is to spend your budget on LinkedIn.
All right, here are the resources that we talked about. There’s a link in the show notes for the double verify study. I would love to hear your, your opinions. on land traffic from LinkedIn, how it performs for you. There’s also episode 89, all about bidding and budgeting. It’s a masterclass. So check that out if you have any questions about the bidding and budgeting that we’ve talked about today. Episode 125 is the $10 per day strategies. It was just the last episode. So you might’ve already heard it, but if not, make sure you go take a listen. If you’re not already a member of the LinkedIn Ads fanatics community, what are you waiting for? Go to fanatics.b2linked.com and sign up. For a very low monthly cost, you’ll get access to all four of our courses, taking you from LinkedIn Ads zero to LinkedIn Ads hero. Plus you’ll have access to the entire community of some of the most experienced thought leaders on LinkedIn Ads at your disposal. We’ll all be passing around ideas for testing and what we’ve learned and what’s working really well for us. So make sure you come join us.
Now, if this is your first time listening to the show, welcome. We’re so excited to have you here. Make sure to hit that subscribe button. But if this is not your first time, let’s say you’re a loyal listener. The very best thing you can do is go and rate this podcast on Apple podcasts. I read every single one and it would mean the world to me. It’s by far the best way that you can say thank you for us putting together this content week after week. With any questions, suggestions, or corrections, reach out to us at Podcast@B2linked.com. And with that being said, we’ll see you back here next week, and I’m cheering you on in your LinkedIn Ads initiatives.
