Are LinkedIn Ads Worth It?

How Much Do LinkedIn Ads Cost?

LinkedIn sells ads through an auction, and LinkedIn says the cost to win it “depends on the bid and the desirability of your target audience”, so there is no fixed price per click or per lead.¹ The floor is low: LinkedIn’s minimum daily budget is $10 for any ad format, and a new campaign set up with a lifetime budget needs at least $100.²

You pay for whatever your campaign objective counts, such as a click to your website, and because the price follows how desirable the audience is, a narrow group of senior buyers that many advertisers want will cost more per click than a broad one.¹ We don’t quote an average cost per click here, because the published figures come from agencies’ own accounts without a stated method, and they say little about what your audience will cost.

The more useful number is the most you can afford to pay, which you work out from your ceiling, the most you can spend to win one customer: multiply it by the share of leads that become customers to get the most you can pay for a lead, and by the share of visitors who become leads to get the most you can pay for a click. The cost-ceiling calculator on the Channel Selection page does this arithmetic, and the Channel Selection page explains how to choose channels around it.

How Do You Measure the ROI of LinkedIn Ads?

Divide what you spent on LinkedIn by the customers it won, counted in your own sales records, and set that cost per customer beside what those customers are worth in gross profit over the time they stay. LinkedIn’s own reports can’t give you either number, because they stop at the leads and conversions LinkedIn can see.

Check it in this order:

1. Work out what a customer from LinkedIn is worth, using their annual revenue, your gross margin and how long they stay, because LinkedIn can reach larger accounts than your other channels, as it did for the contractor.
2. Pick a review period at least as long as your sales cycle, since LinkedIn reaches people before they’re shopping, so they can take longer to sign.
3. Count the customers who signed from LinkedIn in your CRM, and ask every new customer how they heard about you, rather than relying on the conversions LinkedIn reports.
4. Check what LinkedIn is counting as a conversion, because the campaign learns to find more of whatever you count, and a downloaded guide is not a qualified buyer.
5. Divide spend by customers won, and compare the result with both your ceiling and the value of those customers.

Step 3 is where LinkedIn’s report and your sales records usually part ways, because each ad platform credits itself with deals the buyer also touched elsewhere. The Channel Selection page shows how to set up a source of truth you control.

Are LinkedIn Ads Better Than Google Ads for B2B?

Neither is better in general, because they reach buyers at different moments: Google reaches people who are already searching for what you sell, and LinkedIn reaches people by who they are, such as their job title, company size and industry, before they start looking.³ LinkedIn earns its keep when your most valuable buyers rarely search, and Google usually wins when they do.

That’s why the comparison has to include what each channel’s customers are worth. In our answer to whether Google Ads are worth it, the question is mostly whether the steps after the click are costing you customers; on LinkedIn, the question is whether the customers it reaches are worth enough to carry a higher cost to win them.

LinkedIn won because the larger property management firms rarely search for a contractor, and it could find their managers by job title. For many B2B companies the answer is both, with each judged on its own cost and value per customer.

How Much Should You Spend on LinkedIn Ads?

Spend enough to win several customers in one review period, so a single deal doesn’t decide the verdict, and raise the budget in steps only once your cost per customer has held below your ceiling. The platform minimum is no guide, since a budget near it rarely buys enough clicks at LinkedIn’s prices to produce customers you can count.

How much a customer is worth spending to win depends on your business, including how long customers stay, how early their profit arrives and how much cash you can tie up, so set your own ceiling rather than borrowing someone else’s rule. When you scale, watch the cost of each added customer rather than the average, because the average stays low long after the newest customers have become expensive, as the Marketing Action Plan page explains.

When Are LinkedIn Ads Not Worth It?

LinkedIn usually doesn’t pay back when your customers are worth too little to carry its cost, when your budget can’t produce enough customers to judge, or when you have nothing your buyers would stop scrolling for, and in those cases the money does more work elsewhere.

• When buyers are consumers or low-value accounts, because a narrow, desirable audience costs more to reach, and a customer worth a few hundred dollars in gross profit can’t carry that cost.
• When the budget can win only one or two customers in a review period, since one deal either way swings the cost per customer so far that you can’t tell a good channel from a bad one.
• When there is no offer worth stopping for, because people on LinkedIn aren’t shopping, and a “Contact us” or “Book a demo” ad asks a buyer who isn’t looking to start a sales conversation; a useful, specific offer, like the contractor’s free five-year HVAC replacement forecast for one building, gives them a reason to raise a hand.
• When your best buyers can’t be described by title, company size or industry, or the audience is too small to run, since LinkedIn needs at least 300 member accounts in an ad set,³ which how to build a target list for LinkedIn Ads shows how to check before you spend.

For high-value accounts you can name, ads are often one part of a wider approach. In the high-ticket B2B accounts we work with, a short list of the right companies, each with its own page and sales follow-up, has often beaten broad advertising, with LinkedIn ads supporting the outreach rather than carrying it.