When you hear the words “social media” it’s probably safe to say LinkedIn isn’t the first platform to come to mind. Instead, Instagram, Facebook and increasingly TikTok probably dominate. But despite (or perhaps because of) its inherently professional flavor, LinkedIn is just as much a social network as any, and its unique place at the intersection between work and relationships make it a fantastic platform for advertising under the right circumstances.
What’s the cost of advertising on LinkedIn?
Now, it’s important to address the elephant in the room. Ad campaign CPMs on LinkedIn can be notoriously high. In 2016, Salesforce Marketing Cloud took a look at CPMs across various platforms and found that the average CPM on LinkedIn was a whopping $29.37. Compared to the Facebook and Instagram averages of $5.75 and $4.44 respectively, it seems nearly impossible to justify a LinkedIn strategy that was over 5x more expensive for the same number of impressions.
If you tried marketing on LinkedIn in the past, it’s possible you were horrified by these initial costs and quickly backed away. The fact is, however, CPMs since 2016 have changed, a lot. Firstly, LinkedIn CPMs have decreased considerably.
I recently overheard a colleague state “LinkedIn is the new Facebook” as they eagerly checked the latest thought leadership posts being shared, jobs announcements and connection requests on their LinkedIn news feed. I too have often found myself more interested in what career paths former co-workers were taking than the latest pet-centered updates Instagram had to offer.
What has the more expensive CPM, LinkedIn or Facebook?
It seems these experiences are not unique and it’s being reflected in the pricing. One 2020 report lists average LinkedIn CPMs all the way down to $6.59. It seems that as more people spend more time on the platform the increased advertising inventory has brought prices down. While the COVID-19 pandemic has changed the advertising landscape for the time being, over the last few years Facebook CPMs have been increasing. The same report has Facebook CPMs at $7.19, even higher than LinkedIn!
And this is just the pricing for impressions. The fact remains that the inherently professional nature of the platform makes it one of the best places to advertise to the b2b market. With targeting options including job titles, industries, seniority levels and even specific skills, the ability to connect with those users who explicitly want your product for their business is unmatched.
To look at it another way, you’re paying a premium in CPM for access to these qualified and targeted audiences. What ultimately matters is your return on ad spend (ROAS) and an expensive impression can be very well worth it if it leads to more clicks on your ads, higher conversion rates and a higher ROAS. The B2B customer generally has a higher price point and longer buying journey than their B2C counterpart and LinkedIn ads lean into this.
LinkedIn has always been a unique place to connect professionally but as it increases its active user base and brings down its costs, it becomes an even more powerful B2B advertising platform than before. Now that you’re convinced to advertise on LinkedIn, how can you set yourself up for campaign success? Stay tuned for “How to Advertise on LinkedIn”, Part 2 of our 3 part LinkedIn series!