On average, costs per click on LinkedIn Ads are roughly 5 - 8x that of Meta Ads.

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On the other hand, costs per SQL on LinkedIn Ads are about half that of Meta Ads, so it’s worth it in the long run.

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The problem is many advertisers quit the platform too soon because they’re priced out by the high front-end costs (i.e. costs per click [CPC], costs per 1,000 impressions [CPM], costs per video view [CPV], etc.).

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All this said, even though it’s expensive, there are many things you can do to drastically reduce your front-end costs.

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One of these is in the way you bid in the LinkedIn Ads auction.

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Even with these changes, the platform is still expensive on the front-end when compared to other digital ad platforms.

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But lowering your costs can be the difference in your ability to test out the platform for longer without getting priced out.

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Why You Want to Optimize for Lower Front-End Costs

It’s important to note here that clicks and video views are not success metrics.

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We understand that ROI, pipeline, and ultimately revenue are the end goal.

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But front-end metrics should never be downplayed or ignored.

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That’s because, aside from reducing barriers to entry, optimizing for low costs at the top of the funnel can have major implications further down the funnel.

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For example, say we spend $1,000 on a LinkedIn Ads campaign.

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We generate 6,000 impressions and 40 clicks.

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That means our CPC would be $25 and our clickthrough rate (CTR) would be 0.67%.

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If our audience is really interested in our offer and we're seeing a healthy conversion rate of 25%, that means we can expect to get 10 leads at $100 per lead.

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Let's say most of those leads are also sales qualified (80%). That leaves us with 8 SQLs at $125 per.

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If our closed-won rate is between 12.5 - 25%, then that would give us 1 - 2 deals at a cost between $500 - $1,000.

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now...

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Let's say we want to optimize for a lower CPC: $15 instead of $25. We would do that by optimizing for a better CTR (more clicks for the same amount of impressions = lower CPC).

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If we achieved that goal of a $15 CPC, all else remaining the same, our CTR would jump to 1.1% and our click volume to 66.

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With the same conversion rate as before, our lead volume would also jump to 16 at a cost of $62.50 per.

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This would also result in 12 SQLs at a cost of $83.33 per and 1 - 3 closed-won deals between $333.33 - $1,000.

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So, by dropping our CPC by just $10, we have the potential of closing one more deal and saving ~33% in down-funnel costs (in this example).

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Obviously, these are really small sample sizes and these rates are going to differ between businesses, but it's to illustrate this point:

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Optimizing for lower costs at the beginning of the funnel can have major implications further down the funnel.

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You might already be getting a positive ROI on your LinkedIn Ads, but you can get an even greater return if you reduce front-end costs.

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LinkedIn Ads Bidding Strategy for Lower Costs

So how do you actually use your bid to decrease costs on LinkedIn Ads?

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This simple strategy can be broken down into two steps.

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Step one, bid manually for clicks and start by bidding low.

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The platform used to have a minimum bidding threshold (which we called the floor) on Sponsored Content Ads, but LinkedIn removed this threshold, so now you can bid as low as you want, and sometimes bidding too low restricts your ads from being shown at all.

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So we recommend starting your bid either lower than or equal to the low end of LinkedIn’s recommended bidding range.

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If you have a relatively small daily budget per campaign, you should be able to still spend that full budget each day without having to bid as high as LinkedIn recommends.

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The goal at this point is to test out how well your target audience responds to your messaging, while minimizing the risk of overspending on results.

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For example, if you were to start out by bidding Max Delivery (or by the impression), then you would spend regardless of whether or not your audience found your ads engaging.

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Unless you released a stellar ad on your first try, this would result in low volume at high costs.

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This is why it’s important to bid manually first.

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If your CTR is 2 - 3x LinkedIn’s average (0.44%), and you see this consistently for a few days, then that’s a pretty good indication that your ads resonate with your target audience.

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Once you’ve tested and confirmed this through manual bidding, step two is to switch your bidding strategy to Max Delivery.

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This then optimizes your ads for impressions and reach.

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Because you’ve already proven that you can consistently generate a healthy click volume per impression volume, mass distributing your ads through Max Delivery can help decrease costs even more so than if you were to continue bidding manually.

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What Else Affects Front-End Costs?

To optimize for lower front-end costs on LinkedIn Ads, realize that your bid is only half the equation.

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As alluded to earlier, your CTR also plays a big role.

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For the bidding strategy we just outlined to work, you need to get a healthy CTR.

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Otherwise, LinkedIn will require you to bid higher in order for your ads to be displayed, which will increase costs.

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Your CTR is governed by the accuracy of your targeting, the relevancy of your message, and the friction of your offer.

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If you can get these things right, your chances of getting a good CTR (and, by extension, lower front-end costs) are much higher.

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What If My Goals are Impressions and Reach?

Unless you’ve tested your message and audience first, running a general awareness campaign can get expensive really fast.

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There’s nothing inherently wrong with running an awareness campaign. Many advertisers choose to go this route and find success.

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The downside is you have little to no control over your costs and your campaign isn’t optimized for a full-funnel, or holistic, approach.

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By optimizing your campaigns for things like clicks and views, you can quickly build a retargeting pool with which you can continue to nurture and educate those who show interest in your brand, and do so while minimizing costs.

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What Now?

LinkedIn Ads may be a more expensive digital ad platform on the front-end, but with the right bidding strategy, it can be a very cost-effective solution (especially when comparing back-end results).

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For more cost-saving LinkedIn Ads strategies, definitely check out our podcast episodes on audience micro-segmentation and the lowest-cost ad formats.

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And if you value minimizing waste in your LinkedIn Ads account so that you can maximize your return, consider booking a discovery call with us at B2Linked.

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We’d absolutely love the chance to get to work with you!

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Written by Eric Jones