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Why is LinkedIn Advertising so Expensive?

LinkedIn, the powerhouse social media platform that emerged as a professional networking haven, has undeniably evolved into an advertising hotspot for businesses aiming to reach decision-makers and professionals. The buzz around LinkedIn advertising often centres on the question: “Why is LinkedIn Advertising so expensive?”

While not one of the big 3 social media platforms to advertise on, LinkedIn is super powerful. In this blog, we’ll delve into the reasons behind the seemingly higher costs and why they can be a smart investment when harnessed correctly.

What Influences LinkedIn Ad Costs?

LinkedIn Ad costs will differ based on how you set up your ad, but on average, the costs for ads on LinkedIn fall within the range of R100.00 to R200.00 per click and the cost per thousand impressions (CPM) ranges from R130.00 to R700.00. Sponsored InMail campaigns typically cost between R10.00 and R20.00 per send. LinkedIn’s cost per click is almost 50% higher than on Instagram.

There are four primary factors that influence your LinkedIn advertising costs:

Campaign Objective

The cost of advertising will depend on the kind of campaign you conduct on LinkedIn. A campaign intended to raise brand awareness, for instance, can have a different cost structure than one intended to boost website traffic or create leads.

Target Audience

When you advertise on LinkedIn, you compete with other advertisers for your ad to be seen by the selected audience. If the target audience is in high demand, you might face increased costs due to increased competition for their attention.

Bid Amount

LinkedIn Ads require you to bid against other advertisers targeting the same audience. The bid you place impacts your LinkedIn ad costs. While you’ll never exceed your bid amount, you will pay a portion of it due to LinkedIn’s ad auction system. The auction winner pays a cent more than the next highest bid.

Ad Relevance Score

LinkedIn uses an ad relevance score to determine the quality and relevance of your ads. Higher scores can help reduce your advertising costs as LinkedIn prioritises serving users with engaging and relevant ads.

Even though the higher costs on LinkedIn is an undisputable part of advertising on the platform, many advertisers prefer and recommend this platform for their business-to-business (B2B) ads. Below are a few reasons why LinkedIn Ads are still so attractive to so many advertisers:

A Platform Built on Professional Relationships

advertising on linkedin

LinkedIn, with its inception dating back to 2002, was designed to facilitate professional connections. Over the years, it has expanded to a user base of 875 million individuals, with more than 310 million users engaging monthly. It’s not merely a job search tool; it’s a hub of professional collaboration, learning, and networking. This unique audience base, composed of professionals and decision-makers, sets the stage for impactful B2B advertising.

Advanced Targeting Capabilities

One of LinkedIn’s key strengths lies in its advanced targeting features. The platform’s filters allow advertisers to tailor their outreach based on criteria like company, industry, location, and job title. This precision is pivotal for businesses with specific target audiences, ensuring that their content reaches the right eyes. In comparison to other platforms, LinkedIn’s refined targeting minimises wastage and enhances the efficiency of your advertising spend.

InMail Advantage

LinkedIn’s InMail feature enables users with premium subscriptions to send direct messages to professionals they’re not directly connected with. This capability magnifies outreach potential, fostering connections and conversations that could otherwise remain untapped. The higher cost of LinkedIn advertising extends to such features that grant you access to a broader, more receptive audience.

LinkedIn Learning and ProFinder

The platform’s premium packages come bundled with valuable tools, like access to LinkedIn Learning courses. For job seekers, this enhances skills and employability, while for advertisers, it offers a unique channel to provide value and engage their audience.

LinkedIn ProFinder aids freelancers and contractors in identifying potential clients, making it a two-way street for businesses and professionals alike.

Quality Lead Generation

LinkedIn’s user base primarily consists of professionals, making it an ideal ground for B2B lead generation. By offering valuable resources in exchange for contact information, businesses can generate high-quality leads that are more likely to convert. The investment per lead can be justified by the higher conversion potential and quality of the audience.

Integrated Marketing Synergy

LinkedIn advertising seamlessly dovetails with other B2B marketing strategies. The integrated approach, combining LinkedIn Ads with email marketing and direct outreach, nurtures prospects through the sales funnel more effectively. This synergy ensures your investment is working across channels, reinforcing your brand’s presence.

ROI and the Professional Landscape

When evaluating LinkedIn advertising costs, the Return on Investment (ROI) holds the key. LinkedIn’s cost per click and CPM may be higher than on other platforms, but they are justified when targeting a professional audience that values quality and relevance. Businesses selling high-priced products or services often find the ROI compensates for the initial costs.

Content Alignment for Credibility

LinkedIn has carved its reputation as a platform for insightful and credible content. To maximise ROI, it’s essential to align your ad content with this ethos. Your content should demonstrate expertise, offer value, and resonate with the platform’s professional nature. By adhering to these principles, your ads can become an integral part of the LinkedIn experience, increasing engagement and conversions.

using linkedin advertising

Understanding Your Goals

Before embarking on a LinkedIn advertising journey, a profound understanding of your marketing goals is crucial. Are you aiming for brand visibility, lead generation, or direct conversions? The platform’s benefits are more pronounced when they align with your specific objectives.

In conclusion, the initial perception of LinkedIn advertising as expensive should be reframed as an investment in a platform that can deliver highly targeted, professional leads and connections. It’s a dynamic landscape where the costs align with the rewards. When used strategically, LinkedIn advertising can propel B2B companies towards lead generation, brand recognition, and industry credibility. So, while the price tag may be higher, the value it brings to the table is equally significant – especially in a niche, high-value market that thrives on LinkedIn’s professional ecosystem.

Reach out to Digital Squeak so we can create and walk through a digital marketing strategy that would work for your company and determine whether LinkedIn is the right platform for you – pippa@digitalsqueak.co.za

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