Rumor has it that LinkedIn Ads are expensive.
Maybe you’ve considered investing in the platform, but the thought of incurring high costs constantly sits at the back of your mind.
Here’s a little secret:
LinkedIn Ads are more expensive than other platforms when it comes to front-end costs, like clicks and impressions.
But LinkedIn Ads are also cheaper than other platforms for B2B when it comes to back-end costs, like SQLs and ROAS.
So now we know where the rumor comes from, but just how expensive are they? How much do LinkedIn Ads cost?
The Cost of Advertising on LinkedIn
Let’s take a step back because the word “expensive” is relative.
Costs-per-click (CPCs) in North America range from $8 – $14 on LinkedIn Sponsored Content Ads (see benchmarks for every LinkedIn ad type here), where other platforms may be charging you closer to $3 – $5. So yeah, if we’re only talking about front-end costs, LinkedIn loses every time.
But let’s put this into perspective:
With other paid media channels, you’re casting a wide net in hopes that your ideal target audience may represent part of where that net lands.
With LinkedIn, we can get so specific with our targeting, that we make sure only our ideal customers see our ads.
On LinkedIn, we’re paying a higher rate to reach only the ones that matter to our business.
Though we typically see front-end costs being 3 – 5x higher on LinkedIn, by the time those leads shake out into a Cost per Sales Qualified Lead (SQL) on the back end, they’re typically less than half the cost compared to Facebook. This is because lead quality is so much better coming from LinkedIn and this is, again, attributed to the platform’s powerful targeting potential for B2B marketers.
If you want to learn more about how to target your ideal audience on LinkedIn Ads, check out this podcast episode.
That said, those front-end costs are high enough to price some advertisers out. Sure, LinkedIn Ads can be cheaper on the back-end, but if your lifetime value (LTV) is less than what you’re spending, it’s obviously not profitable.
When our Founder and CEO, AJ Wilcox, first started The LinkedIn Ads Show podcast in 2020, the average CPC was $6 – $8 (and was even $2 back when he started running LinkedIn Ads in 2011). More are recognizing the value of the platform and so costs are definitely rising due to the increase in competition.
But the end result remains the same: Regardless of how high front-end costs are, the cheaper back-end costs can make advertising on LinkedIn well worth it if you have a high enough LTV (more on this in a moment).
Are LinkedIn Ads Worth It?
Despite the intimidating front-end costs of the platform (and regardless of whether those costs are rising), advertising on LinkedIn is well worth it.
Still not convinced? Here are just a couple of cases where LinkedIn Ads have proven fruitful:
An SMS short code provider for political candidates identified LinkedIn as an effective channel for reaching their target audience (politicians). So they partnered with B2Linked to generate more qualified leads from within this audience segment.
Here’s what we did:
- Targeted relevant LinkedIn groups that our persona would belong to
- Tested several different creatives to find which resonated most with those in politics
- Crafted and promoted a new offer relevant to those in politics
- Strategically leveraged the LinkedIn Audience Network to better reach our persona on political affiliate sites
- Implemented a multiple-ad-format strategy, utilizing LinkedIn’s Single Image Lead Form Ads, Dynamic Ads, and Single Image Website Visit Ads.
The result was 9 paying customers (a 299% ROAS) and a better Cost per SQL than either of the other two channels being leveraged. Our SQL/MQL ratio is now consistently outranking Facebook and Google’s by about 50%.
An eQMS software company wanted to generate a high volume of qualified leads at a low cost. Their product is best suited for those in the MedTech, BioTech, and Pharmaceutical industries. With the capacity to target by company industry, LinkedIn was identified as the channel to invest in and B2Linked was the agency to partner with.
Here’s what we did:
- Tested between different offers and ad variations to find which combination resonated most with our target persona
- Promoted offers tailored to our audience’s needs
- Utilized additional targeting methods, such as top-of-funnel (TOF) and bottom-of-funnel (BOF) retargeting and ABM targeting
The result was qualified leads consistently generated between $20 – $60 per lead. The client opted to scale their ad budget by 60% in order to continue generating a high volume of leads at an optimal cost. This led to a 52% increase in pipeline, 2 closed-won deals, and 550% ROAS.
A Word of Advice
If you’re looking to get started on LinkedIn Ads, we recommend a monthly ad budget of $5,000 in order to prove out the quality of traffic in exchange for the cost. We also recommend testing the platform for at least as long as your sales cycle and a LTV of at least $10,000.
Are LinkedIn Ads expensive? Maybe. It can also be the most profitable channel for B2B marketers.
We debunk 5 other LinkedIn Ads myths in this episode of The LinkedIn Ads Show. If you’re hesitant about the platform, definitely check it out.
And if you want to jump into the channel but don’t have the time or expertise to do it yourself, consider booking a discovery call with us.
We’ll build, execute, and manage a holistic, custom-tailored LinkedIn Ads strategy for you to help you get more sales opportunities with your ideal prospects.
Written by Eric Jones