LinkedIn advertising is one of those things you know are freaking great.
However, it’s intimidating. You might have heard any sort of opinion about advertising on LinkedIn, and you feel in doubt.
Should you be doing or not? Are you missing out on opportunities?
When it comes down to deciding whether LinkedIn advertising is an investment worth trying, there’s some simple math you need to consider, just like any other form of marketing: RETURN has to be > of the INVESTMENT.
Who should and who should not do LinkedIn Advertising
I spent quite a lot of time trying to find out who is the ideal advertiser on LinkedIn.
In a nutshell, what I have found is that, in general, LinkedIn advertising is ideal for a B2B type of company, that’s trying to generate leads from a specific kind of professional user.
As long as you have a lifetime value or an Average Close Deal Size of over about $15,000, then probably you’re going to be successful if you decide to advertise on LinkedIn.
If you are more alike on the $10,000 deal size, you can still be successful on LinkedIn, but it’s more of a rarity.
If you’re a dentist, you probably shouldn’t be doing Linkedin ads. Anything business to consumer is not great because Linkedin has terrific targeting for B2B, but not for targeting consumers.
What would be a good example of a B2B that should be using LinkedIn advertising?
Saas software businesses do quite well.
Usually, because Saas has a per-user licence, they generally have a more significant purchase.
Plus, they have the subscription factor.
Customer Life-Time-Value (LTV) becomes crucial when forecasting the ROI.
Let’s say the Saas company has average customer retention of two and a half years, with an LTV of $18,000.
As long as the company can afford to spread the ROI in 2.5 years, it makes sense to advertise on LinkedIn.
Let’s say you fall into the above type of business and decide to go ahead and test some LinkedIn advertising.
Probably, one of the first questions that you should ask yourself is: “what is the time frame I can afford to get my ROI?”
If you know that you’ll have the return but it’s five years from now, are you ready to accept that risk?
The time frame entirely depends on your business.
What is LinkedIn Advertising
Linkedin Ads is just another type of PPC.
If you’re considering B2B advertising or recruiting, LinkedIn tends to rock.
LinkedIn ads, if you don’t know, is a similar platform to that of like Google Adwords are.
What that means is it to a self-service platform that anyone can get on creating ads to find who you want to show them to.
If your campaigns work well, then you can crank the budget up. On the other hand, if they don’t work, you can pause or stop.
LinkedIn advertising platform is a very controlled type of environment where you can set bids and budgets, just like Facebook Ads and Google AdWords.
As I said, LinkedIn is perfect for B2B advertising, and here’s why:
– because of the audience
– it’s ideal for recruiting because of how you can reach people
– it’s a form of advertising but, as opposed to Google Adwords or Bing Ads, does not show an ad to someone based on what they’re searching for. It shows it to the right people, despite what they’re looking for.
LinkedIn advertising is a form of display advertising which means that you tend to saturate an audience every time, so you have to be keen on keeping things updated and refreshed.
Type of LinkedIn Ads
The most popular is Promoted Content.
This ad placement shows up in the news seed of LinkedIn.
There are a few different types of sponsored content that you can do: the traditional link post which is a 1200/628 px image, align with the headline and intro text.
Carousel Ads are quite new. They come with square images, similar to Facebook carousel ads.
Another LinkedIn sponsored content comes in the form of Lead Generation forms. This is actually a Lead form that pops up on the click on the ad in the LinkedIn newsfeed. This creates less friction as you don’t have to visit a website to fill out a form. It usually gives you a cheaper cost per lead.
We also have Dynamic Ads which are display placement on the right-hand side of the LinkedIn newsfeed.
Those are only available if you spent $25K minimum within a quarter. That’s considered an exclusive placement.
There are also Text Ads which are placed above the news feed and also to the right-hand side.
We also have Sponsored InMail, which basically you’re paying to send messages to people. It’s similar to email marketing.
Targeting an Audience on LinkedIn
In my opinion, LinkedIn is the best way to reach a very specific audience.
When you’re in B2B, ideally, you want to reach a very specific person, in a very specific type of role in a company. If you know who you want to reach, you don’t want to spread broadly.
If you did want to spread broadly, you should do other types of display or you just use billboard or something like that.
My very favourite part about LinkedIn is that allows you to really reach anyone.
The targeting on LinkedIn lends itself very well to targeting people by things like their job title, by their job function or the department they work in:
- their level of seniority so you can make sure you’re getting the right person as a Decision Maker
- the groups that their members of
- the skills that they have listed on their profile
- also targeting by what industry they work in
- the company size make sure that you’re targeting other enterprise or SMB
- the company name you can do account level targeting
- and also personal information about the college attended or what degree they graduated from.
My second favourite part of LinkedIn advertising is the mindset of the user.
When someone is on Facebook, they’re probably on their way to look at pictures of their family or play FarmVille or something like that.
As the opposite, when someone is on LinkedIn, you know for sure that they’re thinking about work or their career.
When your advertising to them, based on something that is work-related or career-related, you end up with very high conversion rates, which is fantastic.
Once you start advertising you need to decide what type of material is it that you want to promote.
Let’s consider this little funnel here that goes from a low friction type of offers to something that’s high friction.
If you’re sharing an article or infographic, nothing is required of the users, they just have to be interested enough in my content to read it.
Promoting engaging content ends up giving you high click-through rates meaning your CPC is going to come down.
However, if you’re not getting an email address or some form of lead from them, it’s probably less worth to you as a marketer.
Then you have something like a whitepaper, where you’re asking for 5 minutes of their time to read it. In this case, you’re asking for an email address.
You could go down a bit more to something like an eBook, which may require a half an hour of their time to consume this piece of contents.
And they have to give you their personal information to download that eBook.
With a webinar, you ask someone to dedicate you 60 to 90 minutes of their time in the middle of a busy workday, but they are also giving you their information so, again, high friction.
Then you have things like hard sells. What you’re asking them here is to get on the phone with a sales rep or buy your product.
What I recommend it sticking higher in the funnel.
I usually tend to start out with an eBook.
When I have some piece of valuable content ready, I like to a/b testing different ads.
Make sure the economics works for your LinkedIn advertising
First of all, a $7-$11 (AUD) CPC is pretty typical on the LinkedIn advertising platform.
If you’re selling a product that sells for $300-500, LinkedIn is probably not for you.
On the other hand, if you selling a product that sells for $10.000 and more, so you are going to be able to afford the $7-$11 CPC, LinkedIn is definitely the place to be.
The lead quality is also extremely high on LinkedIn.
Comparing Twitter, Facebook, Adwords and Bing ads on one side and LinkedIn ads on the other, the conversion rates are quite a bit higher and you’ll actually end up paying less per closed deal and higher ROI with LinkedIn than you do on the others, despite having a higher cost per click initially.
Then again, just be smart about your economic, and make sure this works for you.
Knowing the KPIs of LinkedIn Advertising
Before we jump into Tracking Conversion, you should decide what KPIs are the most meaningful to your business.
Despite the fact that I gave them fancy names, good KPIs could be:
1. Cost per Click
Just like any other advertising platform, a CPC is a price you pay for clicking on one of your ads, regardless that click converts or not.
2. Cost per Lead
In contrast to CPC, a CPL is a cost of getting a conversion. It could be anything from signup, a phone call, an ebook download etc.
3. Cost per Marketing Qualified Lead
Equally important, you need to be getting into your CRM data so if you’re working with Salesforce or similar, you should be able to calculate down to a cost per marketing qualified lead.
Reporting your leads into a CRM is also necessary to make sure that the leads are not duplicate in the system.
4. Cost per Sales Accepted Lead
Maybe they’ve opted in on the phone with a pre-sales person to verify that they are actually interested in having a conversation. You can think of Cost per Accepted Lead like the cost of a real chance of closing a deal. More about the difference between MQL and SAL.
5. Cost per Sales Accepted Opportunity
As reported by Maegan Moraes from FullFunnel
You can lead a horse to water, but you can’t make it drink. In order to close a deal, you need the horse to drink.
6. Cost per Close
This KPI tells the actual cost of closing a single deal. In other words, this is the total cost that incurs from a click all the way to closing the deal.
If you can track all the way down the above KPIs, you’ll be able to calculate your ROI.
Additionally, you will find that there are particular audiences that you end up with a high cost per lead while others have a lower cost per lead.
Once you know the high cost per lead ones or high cost per close or whatever you are tracking down, you can pause those and let the most efficient run.
Tracking results on LinkedIn
You will not be successful unless you are tracking how your LinkedIn ads are performing.
Whether someone converts on mobile or desktop or whether that person becomes a lead after clicking on a picture, with LinkedIn conversion tracking you can know what leads you are getting from your LinkedIn Ads, which lets you understand and improve the impact of your advertising.
Notably, you’ll be able to see who’s converting, based on their professional profile:
- Their seniority
- Job function
- Company size
Once you know what Ads are converting the right people, you can tweak your campaigns trying to lower your CPC, so to reach a higher ROI. A/B testing is a fabulous strategy to increase your LinkedIn campaign effectiveness.
Installing the Linkedin conversion tracking is really easy, just like Facebook Pixel or Google Analytics.
To do so, you have to first log into your LinkedIn campaign manager, then just click on the conversion tracking button on the top-right of the page.
Then input the URL you’d like to track conversions, which is usually your company’s website.
The LinkedIn insight tag is a little piece of code that sends data from your website to LinkedIn campaign manager.
Just like the Facebook Pixel, Google Analytics, Tag Manager etc. installing LinkedIn’s tracking code is a step you need to do once only.
Creating a Conversion Action
A Conversion Action is a rule, decided by you, that tells LinkedIn when to count a conversion for your business.
In other words, you’ll have to tell LinkedIn what “conversion” means to you, like when someone completes a form on your website or download your ebook.
Again, it’s not rocket science.
Keep in mind that it may take from 60 mins to 24 hrs for your website to be verified by LinkedIn. So be patient.
Conclusion: are LinkedIn Ads worth it?
LinkedIn is definitely more expensive than other advertising platforms. However, the CPC is not the KPI you should base your campaign on.
If it were for CPC, none would advertise on LinkedIn.
The reality is, the conversion rate tends to be much higher on LinkedIn due to the specificity of the target audience and the mindset of the users, as discussed above.
Having a higher conversion rate means more clients.
At the end of the day, it really comes down to what a conversion means for you and what value you give to it.
I hope you found this post interesting and would love to know your thoughts in the comments below.