LinkedIn Ads, Part 1: Setting Up a Campaign
Wondering if LinkedIn ads are worth the cost and effort? This step-by-step post shows you how to set up an efficient, cost-effective campaign.
Relative to other social media platforms, it is expensive to advertise on LinkedIn. But for many businesses, LinkedIn offers a number of advantages and is well worth the cost. One major benefit of LinkedIn advertising is that you are reaching an audience that is seeking professional solutions. They’re not surfing LinkedIn for cute cat photos. So if you offer a compelling product, LinkedIn users are usually receptive to that.
So how do you create a LinkedIn campaign that generates revenue and produces a great return on investment? This post, the first in a series, shows you how to (1) determine how much you really need to spend on your LinkedIn ads and (2) forecast the results of your campaign. We’ll do this by setting up a dummy campaign.
One tip before we begin: As you follow the steps below, consider taking screen shots of your work. This will be very helpful later.
Ready? Let’s go!
Step 1: Set up a dummy campaign in LinkedIn ads dashboard
The more advertisers competing for your particular target audience, the more you will pay per click. To project your costs, set up a dummy campaign in the LinkedIn Campaign Manager dashboard.* For our purposes, you can create a new campaign with placeholder text, or you can use one of your old LinkedIn posts. Remember, it’s just a dummy campaign, so don’t spend too much time on this step.
Step 2: Select Target Geography
Once you’ve set up your dummy ad, you’ll arrive at a page prompting you to “target your audience”. I spend a lot of time on this page because it’s central to the success of one’s ads.
First, you’ll need to specify what geographic areas you want to target. Say you want your LinkedIn ads to be seen by users in New York and San Francisco. On the right side of the screen, a counter will estimate the size of your audience based on the geographic areas you select, as in the image below:
While seemingly simple, this step deserves careful consideration. For example, one of my clients had customers in Europe as well as the U.S. I thought about targeting their European customers, but we were advertising a webinar that was scheduled to take place on U.S. time. It would be a waste of my small budget to target them, unless we changed the time of the event.
Step 3: Select Audience Criteria
Next you are going to narrow down your target audience by selecting from a dozen criteria. Several of these, like age and gender, are usually irrelevant for my purposes. Others, like company name and job function, are appealing, but they often narrow my audience size too much. You need to figure out what works for you.
Example: I was creating LinkedIn ads to target professionals in the investment management industry. When I selected investment management as my target industry, my projected audience size shrank from 10 million to less than 300,000. If you are creating a Sponsored Update, which I suggest you do, LinkedIn advises that you keep your target audience above 300,000. So my two options were to target additional geographic areas or add another sub-industry. I decided on the latter and chose “Capital Markets”. This got my audience size up to 319,000.
Step 4: Set Your Bid
Your next step is the bid screen, where LinkedIn calculates a suggested bid based on your audience targeting selections.
You can choose to bid on the basis of cost-per-click (CPC) or cost-per-thousand-impressions (CPM). In my case, the success of my campaign hinged on people clicking on my content to register for an event — so I wanted to bid on a CPC basis.
LinkedIn quotes you a few numbers: Minimum bid, suggested bid and bidding range. The image above shows you a few things:
- Competing advertisers are paying between $6.58 and $10.42 per click to reach the same audience you’re targeting.
- The suggested bid amount is $6.58. This is just the lower bound of the bidding range. This amount will enable your ads to reach the majority of your audience. Bid more, and you’ll reach more than the majority; bid less, and you’ll reach less than the majority.
- There is a minimum acceptable bid amount — in this case, $3.75. If you deal with huge target audiences (i.e., in the millions), going with the minimum bid amount makes sense. You can review your results after a couple of days and see if you need to modify your bid. My previous LinkedIn ads have been targeted at very niche audiences, so I will often bid higher than the minimum.
Remember: If you are following the steps in this post within LinkedIn, record all of your targeting and bid numbers by taking screen shots.
If you haven’t done so already, now is the time to take screen shots of all your work — you’ll want to have a record of your targeting selections and all the relevant figures provided in the bid screen. Then, save your dummy campaign as a draft so you can come back to it later.
If you followed the steps below, you’ve done a lot of important work: You’ve thought through your audience targeting parameters and reviewed the potential cost of your campaign.
In part 2 of this post, we’ll discuss how to:
- Project how many clicks you’ll get on your LinkedIn ad
- Devise a reasonable budget for your LinkedIn ads campaign
- Project the cost of your campaign per visitor
- Project how many sales (conversions) your LinkedIn ads will generate
- Project cost per conversion
In the meantime, leave me a comment if you have any feedback or questions. I would ♥ to hear from you.
*To complete the steps in this post, you will first need to set up your advertiser account on LinkedIn if you haven’t already done so. The process is pretty self-explanatory. Note that you must have a LinkedIn Company page to place ads on LinkedIn.