How Much Do LinkedIn Ads Cost in 2024?

Advertising on LinkedIn is one of the most effective ways for B2B and many B2C companies to reach a business-minded target audience. However, just like other paid ad platforms, understanding your ads' costs can be challenging. Keep reading to learn all the moving pieces involved in your LinkedIn pricing so you can make the most of every dollar.

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How Are LinkedIn Advertising Costs Calculated?

LinkedIn Ads use an auction-based process for determining ad placement, similar to most paid ad platforms. The auction itself is automated, so having a solid understanding of the moving pieces helps maximize your ad spend.

The costs of your LinkedIn Ads are hard to estimate because of all the factors involved in calculating the cost of every click, impression, and send. However, understanding the core KPIs involved in LinkedIn’s ad platform helps us start making sense of how much your future ads might cost.

LinkedIn’s paid ads focus on three specific bidding options, and which one you choose is a significant factor in determining your costs. These options are:

• Cost-per-click (CPC): CPC remains popular throughout all major advertising platforms. You’ll pay when someone clicks on your ad, which takes them to your site, app, or opt-in form to hopefully become a lead or customer.
• Cost-per-send (CPS): Have you ever received an ad in your LinkedIn inbox, InMail? CPS is what those advertisers are paying — every recipient costs a certain amount, regardless of what actions they take after receiving the ad.
• Cost-per-impression (CPM): This bidding option is ideal for companies looking to improve brand awareness and are less concerned with earning clicks, although they may still happen. You’ll pay a specific rate per 1,000 people who see your ad.

Additionally, let’s quickly touch on the different types of ad formats available for each option:

• Sponsored Content: CPC, CPM
• Text Ads: CPC, CPM
• Sponsored InMail: CPS

We’ll talk more about these options, your budget, and other factors influencing your costs below. But, for now, it’s worth defining these terms before diving into the specific benchmarks to help you understand your costs.

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Overall Benchmarks for LinkedIn Ads Cost

Now that we know what each bidding option means, what will each cost? The overall benchmarks for each bidding option are: 

• CPC: $5.26 per click
• CPS: $0.80 per send
• CPM: $6.59 per 1,000 impressions

We need to highlight that these benchmarks are for any advertiser in any industry, country, and device. They are a comprehensive way to consider your future costs.

That’s why Varos offers real-time benchmarking for each option and metric so you can understand what your peers are actually paying. From there, you can refine your spending and campaigns to outpace the competition without simply increasing the bid.

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Key Factors Influencing the Cost of LinkedIn Ads

So far, we know that your bidding option impacts your ads on LinkedIn cost, but what else is involved? Let’s dive into every other moving piece that creates your final bill so we can then identify how you can make the most of your ad spend.

Bid Options and Budget

We explored the bid options earlier: CPC, CSP, and CPM. Your option should reflect your overall business objective, which may be generating new leads or extending brand reach.

After your bid options, you’ll determine the budget. LinkedIn offers three choices for determining how much you’ll pay for each click, send, or impression:

1. Lifetime budget: Many advertisers won’t run a campaign indefinitely, so LinkedIn offers the capability to set a lifetime budget for the entire campaign duration. You’ll set the start and end dates, your total budget, and the other factors we’ll explore below. Once a campaign is active, you can also change the total bid by a minimum of $10 for each day remaining. LinkedIn considers the lifetime budget to automating ad placements.
2. Daily budget: Setting a daily budget is ideal for any campaigns you may want to run indefinitely or aren’t sure when you’ll want to end them. The minimum budget per day is $10. Similar to other options, the platform automates how to spend your budget to make the most of your ads.
3. Setting bids: Experienced advertisers may want to set specific bids for each bidding option, such as clicks or impressions. With this option, you’ll never pay more than the set amount. For example, the minimum bid for CPC campaigns is $2.

The type of budget and amount significantly determines how the platform decides when to display your ad or when another advertiser will win the spot. 

However, don’t fall into the trap of thinking spending more translates directly to better performance or conversions. Instead, choosing the right objective, improving audience targeting, and enhancing ad relevance are better ways to improve performance.

Campaign Objective

LinkedIn offers specific objectives for both CPC and CPM campaigns. LinkedIn breaks down these objectives into three categories:

1. Awareness
2. Consideration
3. Conversion

From there, they are further divided into more specific categories. The overall CPC benchmarks for these sub-categories are:

• Engagement: $2.53
• Lead Generation: $4.22
• Website Conversions: $6.84
• Website Visits: $6.84

CPM campaigns are all charged the same, regardless of objective. CPS campaigns are also straightforward, as you’ll pay for each InMail delivery regardless of your goal for doing so.

Target Audience

A significant factor in determining your overall costs is the target audience. Therefore, your target audience directly influences costs and your ad relevance score.

As a business-focused social network, you’ll have some unique ways to set your audience when compared to other platforms. Options include:

• Industry
• Company name
• Company size
• Field of study
• Degree
• Member skills
• Member schools
• Job title
• Job function
• Job seniority

You’ll also have other options similar to other platforms, such as region and language.

LinkedIn allows you to select 100 options, so you have a lot of ways to focus on precisely the right audience. You can also use the matched audiences feature to cut down some tediousness while benefiting from specific targeting.

Generally speaking, the more specific your audience, your ads will be more effective. Even beyond the direct costs of LinkedIn, you’ll reach the right people by correctly configuring your audience—which impacts your ROAS. If your ads aren’t seen by people who might become customers or leads, you’ll be spending too much.

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Ad Relevance Score

How does your target audience actually impact your costs? The audience is an essential component in scoring your ad for relevance.

LinkedIn wants its users to see ads that encourage engagement. Not only is this the foundation of the platform’s revenue, but it also impacts the overall user experience. Nobody wants to see ads that are entirely irrelevant to their interests.

So, your ads are scored by how relevant they are to your target audience. What does this mean for your budget?

You’ll pay less to win the ad spot when compared to ads with a worse relevance score. This is because LinkedIn directly rewards relevant ads by giving them priority and lower costs. 

It’s well worth putting in the time and effort to craft ads and target the right audience to have relevant campaigns.

How to Maximize LinkedIn Ads Costs

Let’s tie everything together — how can you generate more business with your ads without spending more?

Now that we know the different factors involved in determining your bill let’s explore how to modify them to reach more customers for the same or lower costs.

Have a Strong Understanding of Your Target Audience

One of the best ways to cut costs is hyper-precise audience targeting combined with relevant ads for said audience. Consider your current customers and let them guide how you configure the audience for new campaigns. What industries are they in? Job titles? Average salaries? 

Newer companies without this data may have to experiment, but it’s well worth regularly reviewing and improving results.

Choose the Right Ad Format

What types of ads does your audience respond to? You can look at historical data, industry benchmarks, or make educated guesses based on understanding your typical customers.

Are well-crafted text ads the right choice? Should you consider InMail? Or will sponsored help demonstrate your authority within the industry?

Most companies will need to experiment with this, but research and historical data can also cut down the learning curve.

Fine Tune Objectives and Bid Options

Would you better reach customers with a different option, such as CPM instead of CPC? Generally, this is dictated by your primary business goals, but it’s still worth exploring other options and measuring results. 

Additionally, when considering CPC, your stated objective significantly impacts costs. Engagement is the cheapest, but will website visits better translate into actual revenue?

You can see how testing different options, measuring results, and making changes are essential to maximizing your ad costs. Don’t fall into the trap of just funneling more money into your ads — make sure your campaigns are effective first.

Leverage Varos to Enhance Your LinkedIn Ads Strategy

Understanding every variable involved in determining the final costs of your LinkedIn Ads is crucial. You’ll be ready to modify these variables to cut costs and maximize your ROAS. Simply pouring more money into your ads isn’t always necessary or the right decision — you might end up just wasting even more of your budget.

Industry benchmarking is also a potent way to gauge your spending and the effectiveness of your campaigns. Varos is a unique platform that gives you real-time competitor benchmarking so you can better understand your results. You’ll be ready to identify areas of improvement or the full context behind successful campaigns.

Ready to put Varos to work to better utilize your ad spend? Sign up today to get started.

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About the Author

Yarden Shaked

Co-founder & CEO at Varos

LinkedIn