When it comes to LinkedIn advertising, digital marketers tend to focus on the niche targeting that it offers. And we should — it’s awesome! However, crafting your targeting is only step one. The LinkedIn Ads space is competitive — advertisers are spending more on ads, and the number of available desktop impressions is shrinking as mobile usage grows. Your targeting alone isn’t going to raise your campaign to the top. In order to really max out the potential of your campaigns, you need to understand the other elements that are determining how often your ads are being shown and the price you have to pay for eyeballs and clicks.
One of the most under-discussed aspects of LinkedIn advertising, in my opinion, is how the ad auction actually works. LinkedIn is not exactly forward about it, and since they don’t provide any insights into the quality of our Sponsored Updates inside of the interface (unlike AdWords, where advertisers can see Quality Score for every single keyword), it is easy to forget about it.
How Does the LinkedIn Ads Auction Work?
Every time a LinkedIn member scrolls through their feed, an auction occurs to determine which sponsored updates the member is going to see and how much the advertiser is going to pay for that impression or click (depending on which bidding method the advertiser selects for that given campaign).
LinkedIn uses two factors when it runs a Sponsored Update auction:
- The advertiser’s bid
- Relevance score of the Sponsored Update
I will go into more detail about the factors that determine an update’s relevance score, but for the time-being, lets focus on what this formula means. Since both the bid and relevance score are equally important, just because you have the highest bid does not mean you will win a given auction. The same holds true for relevance score — just because your ad has the highest relevance score does not mean you will win a given auction.
Check out the example below to see how this would work out in a sample auction. Although Adam had the highest bid of $10 and Scott had the highest relevance score of 9, Ivy still wins the auction because her bid and relevance score have a higher combined score.
In addition, LinkedIn uses a second-price auction, meaning the winning advertiser only has to pay the minimum price in order to beat out the second-highest combined score. So, in the example above, Ivy would only have to pay $6.44 to for the placement, as that bid times her relevance score is all she needs to beat out Scott’s combined score of 45. LinkedIn Marketing Solutions has a great video that lays out how the auction works.
The key takeaway here is that to keep your Sponsored Updates showing in LinkedIn ad auctions, you need to focus on both having a competitive bid and a high relevancy score. For bidding technique, I recommend looking at the suggested bid that LinkedIn gives you and the range it provides for what other advertisers are bidding for a similar audience. For tips on how to achieve a high relevancy score, I recommend you continue reading 🙂
Relevance Score? What’s That?
So what exactly goes into LinkedIn’s relevance score calculation? Relevance score is assigned to each Sponsored Update and is suppose to measure how engaging the update is for that given target audience.
While LinkedIn does not allow advertisers to see relevance scores, they suggest looking at your updates’ engagement and click-through rates (CTR) as an indication of the quality of your ads.
Below are the factors that go into relevance score:
- Click-through rate (CTR)
- Member feedback
- Engagement rate
How Do I Improve My Relevance Score?
Now that you understand the factors that contribute to relevance score, it is time to start thinking about how to apply them to your Sponsored Updates. While there is no way to measure improvements in relevance score in an exact fashion since LinkedIn does not allow you to see relevance scores, conducting tests and focusing on the metrics of CTR and engagement rate can help you determine which ads are performing the best for your given audience.
Below are five tips for writing effective sponsored updates:
- Use high-quality images that will stand out and test a variety of them
- Include promotions and special offers in your ad text, if applicable
- Try including quotes and stats from your asset as “teasers” for learning more, if applicable
- Test shorter post lengths versus longer ones (mobile users may prefer shorter)
- Experiment with different calls-to-action such as Download Now, Sign Up and Buy Now
Testing a variety of text and images will help you gather data and make better decisions about what content your audience engages with and clicks the most. LinkedIn recommends having at least three ad variations per campaign and encourages even more by allowing you to run up to 15 different ads at one time.
Understanding how LinkedIn Ads auction works can help you better approach optimizing your LinkedIn campaigns and gain a leg-up on your competition. The two main components in determining when ads will show and how much advertisers have to pay for them are the advertiser’s bid and the ad’s relevance score. Paying close attention to your updates’ CTRs and engagement rates, while frequently testing new variations of them, is essential to long-term success.
Have any questions or thoughts regarding the LinkedIn ad auction? Start the conversation by commenting below or reaching out to me on Twitter @jcrawford326.