LinkedIn Ads Cost Structure Breakdown

While Facebook, Instagram, and even TikTok might come to mind first when thinking about social media advertising, popularity and trends aren’t the only factors you should be considering when designing your campaign strategy. Your target audience is most important when it comes to where you want to invest your time and, more importantly, your marketing spend.

If you target professionals or business managers, you may be more successful advertising on LinkedIn. And while figuring this part out is one big step in the right direction, understanding exactly how much marketing spend will be needed to make your campaign a success is something else entirely. 

That’s why we decided to put this cost structure breakdown together in order to make budgeting easier and help marketers like you be on your way to using LinkedIn ads to reach your bottom line in no time.

It’s Not One Size Fits All

While LinkedIn advertising costs will vary based on the advertiser, here are three factors that could help you get a general understanding of what you’ll be paying:

1. Your Bid 

LinkedIn’s ad auction has the auction winner pay one cent more than the next highest bid, which means that even though you won’t ever exceed your bid, you will have to pay a portion of it. Basically, this affects your overall ad spend based on how much your closest competitor is willing to spend.

2. Target Audience

LinkedIn advertising can be expensive depending on the audience you’re targeting. If your audience is highly sought after, you can expect to pay more for their attention. Understanding this will help you make better decisions about where to allocate your advertising budget.

3. Ad Relevance Score

Ad Relevance Score is LinkedIn’s way of measuring how well your ad is targeted to your audience. The higher your score, the more likely your ad is to be shown to people who are interested in what you’re selling. This could drastically lower your spend because it’s in LinkedIn’s best interest to serve relevant and engaging ads to its users.

Types of LinkedIn Ads

Understanding what types of ads you want to run will help you gauge how much you’ll need to spend to reach potential leads. There are four types of LinkedIn ads:

1. Sponsored Content

LinkedIn displays these native ads most frequently in the news feeds of your target audience. You bid to place them there, and in many ways, they look like any other LinkedIn post.

2. Sponsored InMail 

A paid service that allows businesses to send messages directly to LinkedIn members via the messaging feature. Messages can be customized and targeted to reach potential customers or partners. 

3. Text Ads 

These are simple PPC or CPM desktop ads that appear on LinkedIn users’ sidebar. Text ads can include a headline, a description, and a CTA (call to action).

4. Dynamic Ads

Allows businesses to target their audience based on data gathered from LinkedIn. This type of ad is especially beneficial for businesses that are looking to create a custom message for each individual they target.

LinkedIn Ad Pricing Models

There are three bidding options available for LinkedIn ads:

1. Cost-per-click (CPC)

You’ll only pay when someone clicks on your ad. This is the best and most common ad form if you want to drive valuable traffic to your page and earn leads.

2. Cost-per-impression (CPM)

You pay for people to view your ad, but not interact with it. With this model, you pay per every 1000 impressions. The goal with these types of ads is to drive brand awareness and should not be your option for directly generating more leads.

3. Cost-per-send (CPS)

This is the model used when targeting LinkedIn members through targeted InMail. Your information goes directly to leads in their LinkedIn mailbox and is a great way to get your message in front of those who matter most to your end goals.

Chart Summaries

We know that it can be difficult to remember all of this information, so we created two essential charts that you can refer back to when budgeting for your LinkedIn advertising strategy.

LinkedIn Advertising Costs

Bidding Options for Specific Ads

Isaiah Shelton

Isaiah Shelton