- Over the years, the professional networking site
- This popular marketing tool is also the most expensive digital advertising platform on the internet.
- We talk to digital ad agencies to find out why it’s expensive if it’s worth it and how advertisers can make the most of it on a small budget.
If you’ve ever tried running ads on the professional networking site LinkedIn, you’ll probably have noticed that they generally cost a lot more per click and per 1,000 impressions (CPM) than Google Ads and Facebook Ads. It is the most expensive digital advertising platform of all in India.
For example, we tried boosting an article on Facebook and LinkedIn with a similar allocated budget of ₹2,000. Facebook’s average cost per click (CPC) was as low as ₹0.51, but LinkedIn cost us around ₹20.
Why is LinkedIn advertising more expensive than other platforms?
After boosting our articles on these two platforms, we found that Facebook uses demographic and interest targeting that targets consumers directly, while LinkedIn focuses more on professional targeting. Thus, LinkedIn is more suitable for B2B commerce and Facebook is generally better for B2C targeting.
While the cost and goals vary from brand to brand, Aashka Mehta, media manager at ad agency Schbang, says, “The cost of advertising on LinkedIn is almost 15 to 20 times more expensive than on Facebook.”
“LinkedIn’s level of targeting is very different from other platforms. It’s a niche and hence the extra cost for the same,” adds Mehta.
LinkedIn makes it easy for a brand to segment their audience and reach a group of like-minded people at once. It offers rich demographic data points such as job function, seniority, company name, geography, industry, interest-based targeting group membership, skills, and more.
Shradha Agarwal, CEO and co-founder of digital agency Grapes, tells us when LinkedIn Ads are commonly used by a brand: “LinkedIn Ads campaigns are typically used for recruitment ads, selling services and products, generating leads, promoting content, increasing visibility and finding a new location for the business. And if we have to compare getting relevant website traffic, Linkedin is at least 5X of Facebook and 2X of Twitter, however, conversions are much better.
For N Chandramouli, CEO of TRA Research, which is a brand intelligence and data insights company, LinkedIn has become something of an “official WhatsApp”.
He gave us an example of the high cost of lead generation from LinkedIn, which is considered its most effective form of marketing on the networking site.
“Per prospect, it can be a person, a company or whatever I am looking for. If you were to advertise, it could go up to around ₹1300 per lead, which is a very expensive lead generation point. But if you use the platform smartly, don’t spend like Facebook – from a few hundred thousand rupees you can reduce it to ₹200 per lead. The amount of expenses can range from as little as $1,000 or even less per month to perhaps $10,000 or even more per month. So it all depends on how active you really want your campaign to be.”
Is LinkedIn getting more attention from advertisers now?
After the advent of social media and the internet, marketers started looking for the return on investment (ROI) of their marketing strategies. They shifted their focus from monthly reports to making decisions based on information.
To understand what ROI on LinkedIn means, as an example, let’s say you spent $5,000 on LinkedIn ads and it generated $10,000 in revenue from those ads. Here’s how to track your ROI:
Marketing ROI (%) = [($10,000 – $5,000) / $5,000] *100
Marketing ROI (%) = 100%
Although LinkedIn is not a low cost medium, it is known to generate positive marketing ROI and marketers say it is worth it.
“It has a promising conversion rate of 6-8%! At $5.26, LinkedIn has the highest CPC compared to other social media platforms. However, that doesn’t mean LinkedIn’s ads are too expensive Rather, it just shows how highly valued ‘clicks’ are on this platform,” says Shrenik Gandhi, co-founder and CEO of digital advertising agency White Rivers Media.
For its ability to deliver a targeted audience and tangible return on investment, Rajni Daswani, director of digital marketing at advertising agency SoCheers, also says expensive advertising on LinkedIn is worth it.
“There’s no other platform that gives you a direct audience with the educated, working-class people who earn their bread in the family genre. Many brands crave this data and are willing to pay the high prices that come with it.
LinkedIn’s growth story and what lies ahead
LinkedIn saw massive user growth after the pandemic.
According to research and analytics platform NapoleonCat, LinkedIn had an audience of 89 million people in India as of April 2022, representing 6.3% of its entire user base. On the other hand,
user base in India in April 2022 was 400 million.
Currently, India is the second largest market for LinkedIn. Around the time the coronavirus outbreak started sweeping the globe, LinkedIn’s user base in India was recorded at 67 million in April 2020.
With 810 million users worldwide, LinkedIn has become the backbone of the global business community. For any working professional, this is a platform to make a first impression on your potential employers, help you build your community and improve your skills.
Advertisers use LinkedIn to avoid shouting into the void. This professional networking platform gives them a targeted B2B audience. Thus, it also monopolizes more and more the budgets of brands.
LinkedIn ad revenue exceeded
$1 billion in 2021 and its overall turnover increased by 37%.
According to LinkedIn, f
our in five of its users have the power to influence business decisions. These movers and shakers also have
2x the buying power typical online audiences. While Facebook has more users than LinkedIn globally, some advertisers find LinkedIn more lucrative than other networking platforms.
Gandhi explains why LinkedIn gets more preference in the brandverse.
“LinkedIn’s competitive advantage is that it is a professional networking site. While Facebook has over 2 billion people, LinkedIn has over 600 million professionals – In digital advertising, quality trumps quantity! Compared to other social media platforms, advertising on LinkedIn is more expensive, but it’s certainly not too expensive for the value it offers.
According to Pranav Ahuja, co-founder and CEO of digital ad agency Xeno, LinkedIn typically lets you choose from four different types of ad formats: sponsored content, sponsored messaging, lead generation forms, and text and dynamic ads.
The first 2-4 weeks of advertising on LinkedIn is generally considered a learning experience for brands and media buyers to figure out what works (or doesn’t). To start, LinkedIn recommends a daily budget of at least $100 or a monthly budget of $5,000.
To get the most bang for your buck, be sure to end your LinkedIn ad with a clear call-to-action (CTA).