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How are your LinkedIn Ads performing? Good? Bad? How do you know? It’s benchmarking time.
Welcome to the LinkedIn Ads show. Here’s your host, AJ Wilcox.
Hey there LinkedIn Ads fanatics! I get asked all the time from advertisers if they’re doing well or not. And imagine that people wanting to know if their efforts are paying off. So today we’re diving into all the benchmarks so you can know how your efforts are stacking up. We’ll cover the ad format averages, as well as what you should be paying and seeing with engagement and your conversion rates as well. Also, if you want to share this topic with someone who doesn’t listen to podcasts, check out the video in the show notes that I did with Social Media Examiner. Okay, let’s hit it.
In the news, the most interesting thing that I’ve heard is that LinkedIn Learning has seen a 3x in people taking their courses. And so this is recorded in COVID isolation right now, which was so interesting to see that people are taking advantage of the time when they’re home alone, and maybe even laid off from work, and they’re using this time to better themselves and improve. I thought that was great. That’s one of those feel good statistics. I wanted to share a few of the reviews that you guys have left in your podcast players or on the podcast network. So Leonardo Bellini says “Ichiba, it means number one in Japanese. I think AJ is a fantastic trainer about LinkedIn Ads. Nobody knows LinkedIn Ads better than this guy”. Oh, that is so awesome. Leonardo, I know him, he’s from Italy. So Leonardo, shout out to you. Thanks so much for leaving such a kind review. Someone with the username Wolf STGT from Germany says excellent, valid information and hands on tips, keep rocking. Oh, thanks so much, Wolf. I appreciate that. Then there’s Billy Boy UK in Great Britain says “great as always, consistently great, useful info from AJ”. So thank you so much. And absolutely to anyone else listening, I want to feature you. So leave a review. Even if you don’t rate me all the way up. I’d still love to feature you. So shout it out, put it on whatever podcast player you’re going for. And I’m dying to hear your feedback on the show.
Okay, so now as we get into the benchmarking, first of all, LinkedIn does not publish their information about benchmarks, about averages. So it’s really hard to actually tell if you’re doing well or not. So if LinkedIn is not publishing this, that means someone else has to. Someone has to work from their limited data set. Well, we’ve managed hundreds of LinkedIn Ads accounts across every ad format, and about every industry that we can think through. So certainly 400 accounts as compared to the 10s of thousands that LinkedIn has. It’s a small data sample size, but what we find is our benchmarks that we’ve found from our own clients. All of the accounts we’ve managed, overseen, even consulted on tend to be pretty accurate. So I wanted to share those with you, even if they are not a 100% representative. And I do wish that LinkedIn would publish their benchmarks, I would be happy if they came and smashed all of our data apart and proved it wrong. Since their data set is 100% complete, I would much rather be accurate than praised. So our limited data set seems to be more complete than anything we’ve seen out there. So I’m eager to share and a note on just the importance of benchmarking. If you don’t know how you’re doing, you won’t be able to improve. And my biggest fear is that marketers who aren’t in the know could be blindsided. There could be a situation where a marketer is complacent, thinking everything’s fine. And then the account gets audited by someone where they point out a whole bunch of flaws or inefficiencies, and it could make the marketer look bad. So I think there’s a need to gauge and be aware And be educated about the best things that you can do for your account for protection. So you can make sure that you don’t get blindsided. It protects your job protects your reputation. And I also think because of that this is the most important episode for the show that we’ve come out with yet.
The metrics we’re going to be benchmarking are going to be things like your click through rate, your cost per click, and your conversion rate. Those tend to be the unifying metrics that we see. Now, as we talk about each one of these, certainly each one individually is not the end all be all. For instance, when we report click through rate to clients, we constantly hear, okay, that’s great and everything how often people are clicking on our ads, but that’s not our goal. It doesn’t tell us whether we’re doing a good job or not. And certainly that is the case. Click through rate does not necessarily mean anything to our clients. But, it does mean something to us because it has a profound effect on the costs that you’re going to get. If you’re being smart on LinkedIn where you’re bidding by the click, your click through rate really doesn’t dictate much, because you’re only paying when someone clicks anyway. So as long as you’re spending your budget, everything should be fine. But when you’re trying to improve when you realize that getting a higher click through rate can significantly lower your cost per click, then all of a sudden it starts to matter a lot. And conversion rates, this one’s really important. But, certainly if you’re not paying very much per click, then even if you had a low conversion rate, you might still be happy with your overall cost per conversion. Your conversion rate will vary depending on the level of perceived friction, and the level of perceived value in what you’re asking someone to do. So if you’re asking a lot of someone or asking something big from a cold audience, you’re going to see a low conversion rate. And if you’re offering something with a lot of perceived value, and it’s perceived as being free, then you’ll probably have a very high conversion. rate. So we’ll go over the types of things that affect those. Like we talked about your cost per click will increase if your click through rates are bad. But we know that your cost per click is also going to be higher if you’re going after extremely small audiences, or more competitive audiences. So these very much go hand in hand. If you have a low click through rate, you will be punished with really high cost per click, I get asked a lot about industry specific benchmarks and audience specific benchmarks. And what we’ve found is these benchmarks that we’ve defined, really don’t change very much by industry, or really by audience. So if you’re worried about your specific industry or your specific audience, don’t worry, go ahead and take these benchmarks the same way they should still be pretty indicative. One of my early observations when I was using LinkedIn Ads was I had a campaign targeting manager level, another targeting director level, another targeting VP, and my last campaign targeting C level people. And in my mind, I hypothesized, well, of course, I’m going to pay more per click to reach the C level person than I would at the manager level. And what was so interesting is their cost per click, we’re actually within about 30 cents of each other. And to add to the complexity here, the cost per click of the C level was 30 cents less than reaching the manager audience. So what this goes to show is your cost per click really doesn’t change very much across personas, across industries. You’re probably going to pay an average right now of about $8 to $11 per click, regardless of who it is. Now, this changes a little bit, because if you’re going after the CEOs of Fortune 500 companies, yeah, you’re probably going to pay $15 or $20 per click. But in general, for audiences that aren’t super, super tight and super in demand, you’ll pay about the same Conversion rates and click through rates also tend to be quite similar in the same way. We do find elevated costs when we’re trying to bid on enterprise sized companies. And that makes sense. They’re quite a bit more competitive. When evaluating ad performance, I’m imagining two hurdles that our ads have to get over. The first hurdle is when we put up an ad, we need someone to click on it. And then once they’ve clicked on it, the second hurdle is we need them to convert. And based off of the efficiency metrics about how people are getting over the first and second hurdle, it lets us know what needs to be improved specifically. So we’ll go over those efficiency metrics and how to actually audit your account here in a little bit.
First off definitions. We’re going to be talking about, click through rates, which is the number of times people took action on your ad out of the number of times that people saw them. This will probably sound very elementary to many of you, but there’s a reason that I’m going over the definitions because it’s going to be important as we talk about sponsored messaging ads.
We’re also going to be talking about conversion rates, which is the number of conversions out of the number of times that people took action and clicked on your ads. This usually is a form fill, but sometimes people have different definitions for what a conversion is. Okay, our two hurdles. So if you’re having a hard time getting people to click on your ads, you will know because your click through rate will be low. And then if you’re getting a lot of clicks, but you’re just not seeing the leads or conversions happening, you’ll know this because your conversion rate will be low. So figure out which of those two hurdles you’re stumbling over. And then here at the end, we’ll go over the actions that you can actually take to fix and rectify these.
Let’s go over how to actually check out your performance. So you’re logged into LinkedIn’s campaign manager where you can see all of your different campaigns or maybe you’re even at the ad level, you can see it there as well. Right above the list of campaigns, you’ll see an option for columns. And if it’s already selected with performance, then you’re in a great place to see your click through rate and your cost per click. If you want to view your conversion rate, you have to select that columns and drop it down to where you can see leads and conversions. It’s difficult because we can’t customize the columns so we can see all of this on one page. So you will need to toggle back and forth as you’re analyzing. It’s very important for you to understand that when we talk about click through rate and cost per click, those metrics will be meaningful for every single type of ad, just as they’re written in the ad platform. Except if you’re using sponsored messaging, if you’re using sponsored messaging, these metrics are lying to you, and you’ll have to figure out a different way. We’ll go over all that. But the reason why this is is because there’s an extra step in the advertising process, when you’re using sponsored messaging ads. We still have impressions, which is someone seeing the ad. But on sponsored messaging ads, that’s a send, that means it was sent to someone, but not necessarily viewed. So we’re departing from our definitions a little bit. The first action someone can take is opening it. And so LinkedIn calls an “open” a “click”. And the average open rate of a sponsored messaging ad is like 50%. So if you’re believing these metrics, as you’re looking at them, sponsored messaging ads look really good. They’re gonna have a 50% click through rate, looking at the dashboard. And your cost per click is also going to look really low because half of the people open it. LinkedIn is reporting to you that that’s a click. So your cost per click quote, unquote, is usually just about twice the cost of your cost per send. So these look really good if you don’t know the metrics you’re looking at. You’ll look at it going, “wow, we’re paying less than $1 per click, and our click through rate is 50%”. That’s incredible. So keep in mind, these are definitely lying to you, the real click that you want to care about is in a different column. So we’ll come to that as we covered sponsored messaging specifically.
But let’s talk about what type of conversion you’ll see come through. When you are running lead gen form ads, the native forms right within your ads, you won’t see any metrics show up in the conversions columns, but there will be a column for leads. And there’s also another column for lead form opens. The nice thing about lead generation forms is you don’t actually have to set up anything for this. Because the conversion occurs on LinkedIn and LinkedIn understands it. They will just do all of the conversion tracking for you. There’s no setting up pixels, there’s no really anything you could do wrong to screw it up. Of course, the hard part with lead generation forms is you have to figure out how to get those leads out of LinkedIn by using an integration partner.
Okay, let’s talk specifically about each ad format and what you can expect benchmarking wise. So starting with sponsored content, which is by far my favorite ad format, this encapsulates single image ads as well as carousel as well as video ads. The click through rate that we normally see, and LinkedIn actually even shares this information if you ask your rep. They see about a .4% click through rate on average. When we launch ads, according to our own conventions and strategies, we generally average between .8 and 1.2. So it’s not difficult to outperform the average. But as long as you’re over .4%, you’re at least beating the average. If you’re underperforming there, absolutely we’ll talk about the things you can change. For costs per click, we expect sponsored content to land anywhere between about $8 to $11. If you’re paying under that you’re doing fantastic. If you’re paying over about $11 a click, unless you are targeting a super small audience, or a really, really important enterprise level, like account based marketing list, you’re probably bidding too high or bidding incorrectly. Then we get to the issue of conversion rates. I abbreviate this CVR. There’s a little bit of a departure here based on what you’re asking someone to do. So I split this into low friction offers and high friction offers. Low friction offers would be an example of like, here’s a free piece of content that’s really valuable, really interesting to you. And in exchange, all we’re asking for is your contact info. If you’re offering a low friction offer like that, we usually see between about 10 to 15% conversion rate, and anything over 15%, we call rockstar content and we want to go all in on that and generate as many conversions as we can while it’s hot. But then you have high friction offers, like, hey, talk to our sales rep or buy something or take a demo or try a free trial of something. This is where of a cold audience, you’re asking too much too soon. And because of that, people aren’t going to be willing, or at least not as many people are going to be willing to take that actyion. So they’ll click because they’re interested or curious, but they will only convert between about 1.5% to 4%. Mostly on the lower end of that though, unless you’re a big brand.
Okay, onto sponsored messaging. This includes both message ads, which used to be called sponsored in mail, and the new conversation ads. Like we talked about before, we have to add an extra metric in here. So we’re going to talk about open rate. LinkedIn will call this click through rate, but that is absolutely not accurate. The average open rate is probably going to be about 50%. So if you have a 60% or a 70%, open rate, you know your subject line is rocking it. But then once someone opens, the next thing that you’re going to want them to do is actually take action on something and click internally. Now click through rates are only between about three to 4% on average, and so if you have 7, 8, 9%, you have an amazing offer with great copy. If you do the math here with a 50%, open rate, a 3 to 4% click through rate and you’re probably going to end up paying on a cost per send basis, anywhere between about 20 cents and 70 cents depending on how competitive that audiences. Your average cost per click is going to land somewhere between about $23 to $56. Now that is cost per click, remember I just told you that sponsored content, you’ll average between $8 to $11. So what is sponsored messaging doing for you that it would be worth three to eight times as much. So yes, sponsored messaging is on average, the most expensive ad format on LinkedIn and because of that, you need to be really careful and really strategic about how you approach it. Since the costs are so high on average, we don’t even recommend it to our average client. We only even suggest it to our clients when we think we can get 70% open rates, and 7% click through rates. That requires a very special type of offer. And certainly not everyone has it, it has to be a very personal type of offer. But if you can get this 70%, open rates and 7% click through rates, that will get your overall cost per click somewhere between about $4 and $14, depending on how much you paid. If your audience is uncompetitive, and you’re paying 20 cents per send, it’s around the $4 mark per click, which is great. That’s half of what we would pay using sponsored content. But if you’re paying 70 cents on the high side, then that turns out to be about a $14 cost per click. And if you want any more information on these ad formats, check out Episode 13 where we went really deep into those. Okay, here’s a quick sponsor break and then we’ll dive into the rest of the ad formats coming right up.
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Okay, let’s jump into the other ad formats. So next coming up is text ads. Now most people who run text ads think that they’re doing a bad job because the metrics look really bad, especially click through rate, but these are a hard ad to over perform or even underperform. So the average click through rate on these is .025%. So that’s two and a half clicks out of every 10,000 impressions. Because these are only shown on desktop, and they’re in the right rail, and they obviously look like ads, most people tend to be pretty banner blind to them, they ignore them. So if you have a click through rate over about .03%, you’re doing amazing. Your ads are rock star level, keep it up. And this is LinkedIn’s cheapest ad format. You can bid all the way to the floor of $2 if you want, but most of the time we see people paying between about $3 to $5 per click. So significantly cheaper than even sponsored content. But it’s also really hard to drive a lot of this traffic unless you have a massive audience. If you’re bidding higher, yeah, you can pay all the way up into like the $13 to $15 a click for these, but I probably wouldn’t suggest it. You’re really burning dollars at that point.
Okay, and then conversion rate. This totally depends on the offer. If you have a low friction or a high friction offer your conversion rate is going to vary significantly. But what we find is text ads because they come from people who are on a desktop, they have a full use of the keyboard, you can generally get higher quality leads here, you can generally get a slightly higher conversion rate, because they don’t feel as bad about typing more fields that they might feel bad about on a mobile device, doing lots of thumb typing. And you can usually get them to fill out more fields. So text ads conversions we love. Then you’ve got dynamic ads. Now one ad unit of dynamic ads takes up the space of three text ads. Because of that, you’ll see click through rates that are equal to about three times the average click through rate of text ads. So if you’re performing over a .06 percent click through rate, you’re doing great. We oftentimes see .08, .09, even as high as .1 in some cases. Now your cost per click here, it used to be that you’d pay $13 to $18 per click on these, but LinkedIn had a recent price reduction, like we’ve talked about in Episode 13. And because of that, the cost per click now is usually between about $6 to $8 per click. Because the click through rate is low like text ads. Again, this is an ad format that’s really hard to get a lot of traffic from. So fight the temptation to bid so high that you’re paying over about the $8 mark, because you can probably pay $8 per click on sponsored content and capture a lot more traffic. Just like text ads, your conversion rate on dynamic ads totally depends on the perceived value and the perceived friction of that offer. Okay, so you’re saying to yourself, I found some areas, identified some metrics that are not as good as they should be. So if my performance sucks, how do I go and fix it? Let’s focus first on your click through rate. So if your click through rate is below the benchmarks that I’ve laid out here, it’s probably one of four things. The first is maybe your ad copy isn’t showing the value of your offer properly. Number two is maybe your image is not contrast enough to get people to stop scrolling. Remember, your images job is just to be a thumb stopper. Don’t try to convert someone from the image. That’s the job of your ad copy. So on to the point three here, your ad copy might not be pressing on your pain point hard enough. You might be saying, here’s what you can get, but maybe you’re not telling them, “hey, you have a problem. This is going to solve it”. And your fourth is, and this is usually my last resort, it could be that your offer simply isn’t interesting. And there’s no amount of ad copy rewriting you can do to make your offer seem interesting enough to get over that first hurdle, which is getting someone to click. So if you’re under these, click through rate benchmarks, try refreshing your ad copy, try saying it in a different way, try selling that offer a little bit better and see if you can get that up. We’ll get you sailing over hurdle number one, and then getting towards hurdle number two. Okay, but what if you’re paying too much? What if your costs per click are significantly higher than what I’ve laid out here? If you go back to Episode 6 where we talked about bidding and budgeting, the first reason the biggest reason why people are paying too much, it’s because they’re bidding too high, or they’re bidding wrong. So don’t take LinkedIn’s advice on how to bid here, definitely use the strategy I laid out in Episode 6. The next reason why you might be paying so much though, is maybe you have bad click through rates, which we just went over. So improve those things. If you can get your click through rate higher, your cost per click will come down. The third reason your cost per click might be too high is really something you can’t do very much about and it’s if competition is just so high. If you’re in an area where competition is ridiculous, and you’re paying like $13, $15 a click and you just can’t get traffic at less than that, what you’ll want to do is play with different offers and play with different ad creative. Because if you can get your click through rate up significantly, that will get your cost per click down. And all you have to do is outperform your competitors in the auction by getting a higher click through rate, awarding you a higher relevancy score, and then LinkedIn will let you start getting traffic at lower bids.
Okay, and finally, conversion rate, this is the second hurdle. So you’re getting a lot of traffic, you’re getting people clicking, but you’re not seeing a lot of conversions. There are lots of things that can affect your conversion rate. Let’s go through each of those. Very first off, most of the time, it’s your offer. If you’re telling someone give us your personal information. If someone’s going to be willing to give you that information, that better be good, it better be worth their time and potentially opening themselves up to getting spam. So don’t try to give them a product brochure. Don’t try to offer them something like a white paper from eight years ago. It has to be interpreted as valuable, otherwise they’re not going to convert. Okay, so assuming you have an offer that people actually would care about that is exciting is perceived as valuable. If you’re still not converting, maybe it’s because your ad didn’t prep them well enough when they got to that form. So if the ad is telling them, here’s the pain point, here’s the value that you’re going to get by moving forward here. And then they get to the landing page. It could be that your ad didn’t prep them well enough to convert. So maybe the landing page itself is saying fill out this form, and we’ll give you this but maybe the ad didn’t tell them that there was going to be a form on the other side. Maybe the ad didn’t give them a call to action. It just said, “hey, you’ve got this problem, click here to solve it”. And then when they get to the page, they’re disappointed because it’s asking for their information and it feels like a bait and switch to them. Then there are lots of things about the landing page that could be wrong here. So maybe your landing page doesn’t instill trust. You could have all of the right stuff on your landing page, it could look good, but if for some reason someone is looking at it going, oh, I’ve never heard of this company before, this could be shady, you could have all the right elements, but your conversion rate would be next to nothing and you wouldn’t know why. So make sure you concentrate on those trust signals. Put badges and here are the customers we’ve worked with. And here’s where we’ve been featured. That type of information will help instill that trust and get people to move forward. Sometimes the landing page doesn’t have all the right stuff, and maybe it’s hindering your conversion. Imagine what happens when someone goes to click on your ad. And then your page takes three, four or five seconds to come up and load. You’re not sticking around and neither is your prospect. So sometimes here it’s a page load speed issue. So make sure your landing pages are loading fast. So you don’t lose people before they even get there. Maybe your form comes first, but you didn’t actually sell the offer well enough. There’s no text telling them here’s the value, here’s the benefit to you. So make sure that you lead with the value. By reading this PDF, you will learn X, Y, and Z, you will be able to do A. The three things that we really want to see on a landing page. Number one, we want the form to be front and center. So as soon as the page loads, people are in the mindset, you’re going to be asking something of me and I’m in that mindset. Number two, you want the text telling them here’s the value, here’s the benefits to you. Third, you want these trust signals. You want something telling them instilling that trust. And if you have all three of those things, but you’re still not converting, chances are you’re asking too much. Your offer isn’t actually valuable, which hurts to hear, but maybe you are just not providing as much value as you thought you were. Or maybe the offer is pretty good. But your landing page is asking for too much stuff. If you’re asking for more than like four, maybe five fields, people are going to look at that. And even if they are interested, they’re going to say, they’re asking for my social security number and a license to my firstborn. I, this just isn’t worth it, and they’ll leave. So try to keep your form fields down to preferably first name, last name, email converts the highest, you may have to ask for phone number. So one cool little hack here is, as of recently, LinkedIn allowed the lead gen form ads to pass someone’s profile URL from a field. And what’s so cool about this is if you have access to their profile URL, you don’t need to ask them things like what their job title is, or what company they work for, or what industry they’re in, or what their company size is. You don’t have to ask that because It’s all available on their public LinkedIn profile. So as my little hack here, if I’m using lead gen forms, I will ask for first name, last name, email, and profile URL. People tend to convert nicely on this because you asked them for a profile URL and they say, well, it’s public knowledge Anyway, why do I care, but it has all of the other information that you want to extract and your sales team is going to appreciate a very quick way to look them up and see how to approach them. So your job now, I want you to go take a look at all of your different ad formats and their performance, compare them to the benchmarks, and then figure out are you having trouble over hurdle one, two, maybe even both, or maybe you’re looking at this going oh, I’m having trouble over no hurdles. And that’s great. I hope that you are just killing it and slaying it. But, if you are stumbling over one of those hurdles, I do hope this information has been super helpful for you. I do want to add just one little thing based off of the conversion rate factors. There is a cool way that you can actually test your landing pages to see if your landing page is hindering the conversion or if it’s the offer. So if I’m running traffic to a landing page, and I’m having a low conversion rate, but I feel like my offers good, what I will do is run exactly the same ad to the exact same audience. But instead, I’m going to test it through a lead generation form. And the difference here is that a lead gen form is filled out right on LinkedIn, where all the trust signals are already there, and the speed is there. So if you’re seeing a 2% conversion rate from your landing page, but you see a 15% conversion rate from your lead gen forms for exactly the same thing, that is a screaming signal that wow, your landing page is hindering conversions and you need to fix that landing page, whether it’s speed, whether it’s the right elements, whether it’s selling the asset better on it, something’s wrong with that landing page. But, if you do this test, and maybe you had a 2% conversion rate on the landing page, but a 5% conversion rate from your lead gen form, then you know it’s probably the offer. People just aren’t willing to download what it is that you’re offering them. So that’s time to do some more work on the offer. Okay, with that being said, I’ve got all the episode resources for you coming right up, so stick around.
Thank you for listening to the LinkedIn Ads show. Hungry for more? AJ Wilcox, take it away.
Okay, I mentioned at the beginning about the benchmarks video that I did with Social Media Examiner. It’s on YouTube so hit that link in your show notes. This is an 11 minute video that goes over a very condensed version of what we’ve talked about here. So if someone is not a podcast listener, but you need them to understand benchmarks, send them that video. They’ll watch it and go, “oh, great. You’re right. We should change our landing page” or whatever you’re trying to get them to do. Use that as a tool to help convince. The next is when I present on LinkedIn Ads, I have a slide all about benchmarks. And so I’m going to put that as a JPEG that you can just click on and download it, you can use this as an easy reference. Just print it off, put it up in your office, or I don’t know, make it your desktop background or something. But this will help you have a reference guide. So you don’t have to go back and listen to this and take notes. If you are new, or if you have an employee who is new to LinkedIn Ads, have them check out the course link. This is the LinkedIn Learning course that I did with LinkedIn Learning. And it covers about the first hour and a half of what I train, when teams bring me in. I charge $500 an hour for consulting. And this course is only $25 if you have to buy it, or if you have LinkedIn premium of any kind, you’ll have access to it for free. So a very, very good deal for anyone who wants to learn more about LinkedIn Ads. It takes you from absolutely nothing to all the basics. Open up your podcast player right now and hit the subscribe button whichever podcast player you’re using, I want you to subscribe. I hope I’ve provided enough value that you’ll want to keep listening. I have so many cool plans for episodes coming up. So I want you to be ready for those. And then please, if you do like what you’re listening to, please hit a review, give it a rating and leave us a review. I’d love to shout you out in the review segment. And then finally, if you have any ideas for what you would like us to cover here on the podcast, or if you have questions, feel free to reach out to [email protected] and we will help you out as fast as possible. Okay, see you back here next week. And we are cheering you on in your LinkedIn Ads initiatives.