Why pay $10 when I can get the exact same thing for $5 (and twice as much) ? That’s the gist of this story, but the marketplace I’m talking about is LinkedIn Ads Bidding.
LinkedIn Ads is just trying to be helpful when they give you the “Bidding Range” that other advertisers are paying for audiences similar to your campaign’s audience. You don’t want to cheap out and look like a chump that can’t even compete do you?
When it comes to LinkedIn Ads bidding, LinkedIn says:
This is the maximum amount you’re willing to pay per click (CPC campaign), per view (CPV campaign), or per 1,000 impressions (CPM campaign).
There’s no set cost for ads because you are competing with other advertisers for clicks and impressions. In general, the higher you bid the:
• More competitive your campaign is in the auction.
• More likely you are to receive clicks and/or impressions.
That seems…OK. But, it’s what is not being said in that little informational snippet that you need to be aware of. Bids really determine the share of impressions that you are eligible to get for the ad audience you are targeting on LinkedIn. If you are focused on lead generation, then ad impressions is not a useful “goal metric.” If you’re more focused on building brand awareness, ad impressions might be the right metric to capture.
Marketers focused on building brand awareness are usually buying ad impressions by the thousands and are doing so with large budget “media buys” to get as many eyeballs (from all target demographics) seeing the ads as possible. Lead generators are more judicious about how they spend those ad dollars with an emphasis on the most efficient spend to reach the exact target audience that can and will buy their product or service.
In the 12 years we have been in operation as an agency, LinkedIn has delivered better lead generation performance than any other ad channel. So why is the most effective online lead generation marketing channel emphasizing metrics that are, at best, a secondary consideration for lead generation marketers? Great question, and the answer really boils down to the motivation of every business – revenue.
Ad bidding is an upward pressure kind of game. If you successfully encourage the winner of 20% of the eligible impressions to bid higher and get 25% more, you then increase the amount of the bid needed for the advertisers getting 50% or 30% need to maintain or grow what they have. That upward pressure can compel all competing advertisers to bid higher to get their share of ad impressions.
The Path of the Lead Generator for LinkedIn Ads Bidding
Advertisers engaged in lead generation should only focus on ad impressions when their bids prevent them from showing enough to spend their daily ad budgets. The idea is to get as many leads as you can for the least amount of money per lead (cost per lead).
To do this you need to maximize clicks for the budget you have available. If your campaign daily budget is $50 a day and you bid $10 per click then you could get 5 clicks a day. If you bid the minimum (we usually see $5 minimum bids on LinkedIn) then you could get 10 clicks a day for that same $50 budget.
In a month’s time, with a 10% conversion rate you could get:
- @ $10 per click – 150 clicks and 15 conversions for a cost per conversion of $100
- @ $5 per click – 300 clicks and 30 conversion for a cost per conversion of $50
If you can spend you daily budget of $50 with the lower bid and maximize clicks and conversions, then why would you ever care about lost ad impressions?
Still Biting the Hand That Feeds Me
I’ve already gone public in saying that lead generation advertisers should NOT take LinkedIn Ads Best Practice advice on ad targeting settings. Now I’m telling you to ignore the cost-per-click carrot on the end of their stick and bid for the bottom instead of the top.
The reality is that I’m the biggest cheerleader LinkedIn has when it comes to lead generation with content marketing. We commonly achieve double digit conversion rates with White Paper, e Book and Webinar campaigns with targeted leads that meet our clients standards for being qualified.
LinkedIn Ads seems to want to be the ad platform for the masses, and as a result they give advice fitting for awareness advertising. They make revenues from both consumer advertisers and B2B advertisers now. But, if you want advice on how to succeed as a B2B advertiser more focused on lead generation than building awareness, you are better off going with advice from an experienced LinkedIn ad agency that succeeds with it than listening to LinkedIn, because LinkedIn’s advice doesn’t fit B2B lead generation goals.