LinkedIn Advertising for Small Businesses

Organic reach is declining on LinkedIn content. Savvy marketers need new ideas to reach the audience that has been steadily eroding. One of those ideas is LinkedIn advertising.

Too expensive and doesn't work? Read this interview with the world's recognised leader in LinkedIn advertising, AJ Wilcox , taken from a LinkedIn Live with Lynnaire which you can also watch here.

🔷 🔷 🔷 🔷 🔷

What kind of advertising can you do on LinkedIn?

The first type are the ads you see in your newsfeed, otherwise known as sponsored content. They’re the default experience on both mobile and desktop.

They can be:

🔷 an image (my favourite)

🔷 video

🔷 a carousel that someone can flip through to see multiple images

Another type are text ads, which I also favour. These are found in the right rail only on desktop. You share the space with two other advertisers in a little three-pack.

The reason I love these is because they rarely get clicked. They have a very low click-through rate – an average of about .025%. That’s just two and a-half clicks out of every 10,000 times these ads are shown.

They're the cheapest ad format so when they do get clicked, it doesn't cost you very much. They are great for lower budgets because they are a good support to other ads.

Imagine if your prospect has been seeing your logo every time they load a page on LinkedIn and every time they visit someone's profile – for weeks. By the time they see your ad, they're going to be a lot more likely to click it because they feel they know who you are, which adds legitimacy to your brand.

Another type of LinkedIn advertising is also in the right rail, where text ads go. These are called dynamic ads because they put your profile picture into the ad to help get your attention.

You may have seen an ad showing your picture and using your name that reads: ‘Hey, Lynnaire, are you interested in working at this company?’ They are best used to get more followers for your company page.

And finally, there is sponsored messaging but this is being discontinued. This involves paying to send an InMail message or a decision tree where someone can hit yes or no and then be asked more questions. These are conversation ads that are likely to be replaced in the next two or three months.

How much does LinkedIn advertising cost?

(The costs mentioned below refer to North America, the most competitive market. Costs in New Zealand, Australia, Europe, Asia or South America will be significantly less.)

On average, if you're targeting someone in North America, you’ll pay between $8 and $14 every time someone clicks on your ads. That’s a lot of money to get someone to show a little bit of interest. And it doesn’t mean they're going to become a customer or even that they’ll fill out a form. That's just for the initial click.

If you compare that to other networks, especially Facebook and Google, it can look really expensive.

On Facebook, you might pay $3 to $4 per click. On Google ads, you might pay – depending on the keyword – $1 or $2 per click on the low end, or $50 to $100 on the high end. If you’re going to pay $8 to $14 for a click on LinkedIn, when you could get a click for $4 on Facebook, how does that make sense?

Here's how it works. Facebook doesn't have information about who you are professionally which, if you're trying to sell in the B2C market, is fine. Facebook is perfect for targeting people by their age, interests and activity.

In B2B, there's only a small sub-segment of people who will buy your product. With LinkedIn, we can be so laser targeted that we show our ads only to them. And that's the real value.

On the front end, it looks more expensive, but when your sales team starts receiving leads they're going to disqualify 95% of those from Facebook because they're not the right person and not the right end user. However, on LinkedIn, because the targeting was perfect, you will only disqualify perhaps 5%.

So, further into your sales funnel, LinkedIn ads start to look really good, but I can’t deny they are expensive at the front end.

Why are ads cheaper in some markets?

You have a certain number of advertisers targeting certain kinds of people and that determines how competitive the market is, which can drive prices higher or lower.

For instance, if you wanted to target school teachers or people in professions without a lot of disposable income, or where they don't operate huge budgets, chances are they're not going to be a very competitive audience. You shouldn't have to pay very much to get in front of them.

But if you're trying to reach CEOs of Fortune 1000 companies, those clicks are going to be a lot more expensive because there is more competition.

What level of company page follower numbers are needed for ads to be effective?

It depends on who your target market is, but if I see an ad from a company that has fewer than a thousand followers, I get the sense that it's a smaller company, or one that is newer or potentially less stable.

The follower ad format is a way to increase your company page followers to 1000 or more. Then, when your sponsored content ads show the number of company page followers, it's an implicit nod that the company is legit.

Having said that, I don't recommend using follower ads if you can mobilise people within the company. If you're an admin on the company page, you get a certain number of invites every month to invite your connections to follow the company page. It is so much easier to gain followers that way than having to pay $8 to $15 for them.

In the past, people have reported that LinkedIn ads don't work. Do you think they work better now than they have in the past?

They absolutely do work but I wouldn't say their effectiveness has been increasing or decreasing over time. I think ads are as effective as they always have been. What seems to be changing is marketers’ understanding of what it takes to capture someone.

In the past we marketed or advertised to get a potential client to download a guide, white paper or ebook, or to join a webinar. Then once you had their email address, you reached out to them and started a sales conversation. Maybe that never worked or maybe user behaviour has changed, but we're finding many people in B2B are having a tough time getting someone into a meeting who has downloaded a piece of content.

So, we have to take a step back and ask:

🔷 How do we buy how? 

🔷 How did a brand you’d never heard of nurture you to the point where you then bought their product? 

It's a lot easier in B2C with smaller deal sizes. But in B2B this is really significant. What we've found works is repetitive touches over time, being able to show people in the early stages how a brand is different, how it’s differentiated from its competitors, pointing out the benefits of the product. Try to get their attention and let them take it at their own pace.

Could informational or educational posts work together with ads to boost them both?

Definitely. On LinkedIn you can target people by their job title, geography and industry plus the preferred company size.

In fact, there are 28 different ways you can target people whereas organically, when we post, we're usually only getting access to a broad but sparse group. Ads get us access to very specific people we would probably never be able to reach organically.

It's a new audience and it's a very premium one. I love the concept of using posts and ads side by side to back each other up.

I have a podcast and you have a series of LinkedIn Lives. These are subscribable events which we can't track with ads.

People say, ‘Oh, I'm a listener of the podcast’, and while I have no idea where they originally heard about us, I do know they're a much better lead because they've heard our content so many times.

Don't be afraid to draw attention to the subscribable items on LinkedIn, even if it's really hard to track, because it all feeds back into the organic content. With LinkedIn and company page newsletters, for example, you can see who has subscribed and can follow up with either a message or an invitation to connect.

For small businesses, what is the best format to start with when wanting to venture into LinkedIn advertising for the first time?

I think for a small business, which usually means a very small budget, the first thing has got to be text ads.

You have all the same targeting available to you and could even show your ads to the CEO of Apple if you wanted to or anyone else. Plus, you can bid all the way down to $2 per click so this is a great place to start. You’re never going to spend too much money, but very quickly you'll probably say, ‘I've got a little bit more money and I wouldn't mind spending more’.

The next format I would try is single image sponsored content ads. When you go through the process of setting this up the first time, LinkedIn tries to gouge you. So beware, do all your targeting but make sure you uncheck the box that says Enable audience expansion. That gives them licence to target whoever they want, rather than just obeying the targeting that you've set.

Also, in the bidding section where you say how you want to pay, the maximum delivery option is set by default. They're trying to get as much out of you as possible and it’s the most expensive way to pay for traffic on LinkedIn about 90% of the time. Instead, click on Show additional options, one of which will be manual bidding. This will give you a crazy range of what they think you should be bidding per click. It might say something like, ‘Others in your industry are bidding $20 to $80 per click.’ Ignore that and put in a much lower number. I like to start at $7 here in the North American market because you can always spend more if your ads aren't spending any money. But if you start bidding at $30 per click or something that LinkedIn recommends, you may only get one click a day and that’s your whole budget spent.

💡 Pro tip – Start with text ads and single image sponsored content ad formats.

In the past you've recommended a monthly budget of $5000. Would a small business really have to allocate as much as that?

Yes. The reason I recommend $5000 is if you're testing the platform, if you're trying to figure out what works and what doesn't, being able to run at least one test every month is critical. By doing so you can definitively say yes, the audience likes this, or no, they don't, so let's do less of that.

That said, it doesn't mean you have to spend that $5000 every month. You could split that over two to four months if you want. It just means you have to exercise some patience.

I tell people if they're only spending $1500 per month, they’ve got to be in it for the long run, for three or four months at least, to make sure they are getting enough data. The more budget you have, the faster you can test.

How long should you run a campaign for?

We know that in a buying cycle we need multiple touches to the same person to remind them of our product or service, to stay top of mind, to get their attention and then eventually to convert.

So, we want an ad campaign to be going for a reasonable amount of time. But realistically, once you've spent about $5000, you've likely reached enough of your target audience to see some results.

What would the lifetime value of your sale need to be to make LinkedIn advertising worthwhile?

You want the lifetime value of your sale to be at least $10,000. That's because if you're paying $8 to $14 per click up front and you need a lot of clicks to nurture someone to become a sale, you want to make sure you have a large enough deal size on the back end to show a return on your investment.

That said, if you are running ads in an area of the world where you don't have to pay $8 to $14 a click, let's say it's New Zealand where you might be paying $4 to $6, or South America where you might be paying $2 to $3, obviously you can decrease the value proportionately.

For quite a few businesses, selling a product is not the goal of their advertising and there are lots of different things you can use LinkedIn ads for. It might be:

1.    Showing ads to people who are already leads but in the consideration phase. They might be deliberating with the buyers’ committee and haven't yet purchased. You can show ads to them and the whole buyers’ committee to stay top of mind and help move a deal along.

2.    You might want to show ads to members of the press in the hope they will write about your product. Then, it's more of a PR move.

How do you target your ads?

We have many ways to target audience members on LinkedIn.

🔷 One of my favorites is job title. If you know the job title you want to go after, you can do job title plus geography plus company size. That's a good way to reach your precise audience.

However, because most people use job title targeting, it becomes more expensive and more competitive. In that case, it's helpful to try some of the other targeting methods.

🔷 Another I really like to use is targeting by job function, which is someone's department plus their level of seniority. If I want to reach marketing managers, I could target marketing as a job function and seniority of manager. It would cost less to reach them than it would to reach them by the marketing manager job titles.

🔷 I also target people by groups. If you're a member of a marketing group, I can layer on a level of seniority that reaches that same marketing manager.

🔷 We also really like targeting specific skills, and then layering on a level of seniority. On all these you can add company size, company name or industry, or all of them.

Note: You can't target an audience that's fewer than 300 people. So, your audience size needs to be big enough that you can still run ads.

Can anyone open an ad account and start advertising?

I'm a huge fan of anyone who's a self-starter and wants to figure it out. However, I spent about $30 million on the platform before things finally started making sense and I understood what was happening and how to get lower costs and higher performance. So, anyone can but it's much better to work with someone who already knows what they're doing to skip that expensive learning curve.

💡Lynnaire’s pro tip: The same can be said for the rest of LinkedIn, too. There are so many changes, and so much happening on the platform, that trying to navigate it all on your own is a nightmare. It’s important to use people who are experts in their field when doing something like this, especially if you're spending somebody else's money. A company wants to make sure the money is being spent wisely and it’s important people realise this is not an easy thing to. It can be quite complex.

The same applies to the ad platform. The longer you leave it, the higher the chances your competitors have got onto the platform and figured it out. They're starting to show a return on their investment. The earlier you can get onto the platform and figure it out, the better, because the more people who join the ad platform, the more expensive it gets.

When I first started doing this back in 2011, the average cost per click was $2. And now it's $8 to $14. It's become more and more competitive as more people have been getting on.

Marketers are getting savvier and we're getting better at tracking the value of our ads. My recommendation is to figure it out even if you just take baby steps because the same test next year or in two years could be $2 or $3 more per click. It's in your interest to start earlier.

💡 Pro tip – There are two excellent tools advertisers on LinkedIn have, especially those at small companies. We can do three special kinds of targeting:

1.    We can target a list of people. You may not know their email address but as long as you know their first name, last name, company they work for and their job title, that’s usually enough to match them.

2.    We can upload a list of LinkedIn connections into the ad platform for targeting. There's some really cool things you can do that way with very small audiences to stay in front of people who may not be checking their email.

3.    We can upload lists of companies. Choose the top 50 or 100 companies that you would best serve and start showing ads just to them by layering on job titles or functions. We call it spearfishing because this is about going after the big deals.

These are all things you can do with very small budgets on LinkedIn.

Do you need to have a company page to use LinkedIn ads?

If you want to use sponsored content ads, which is my main recommendation, you do need a company page because that's where the ads live, on the back end. But you don't need one if you're going to use text ads, dynamic ads, or the message ads that are being discontinued.

It’s really important to have a company page even for yourself, because when you look at someone to see where they work and just see the generic grey building icon, the impression it gives is unprofessional. 

Summary

With the decline in organic reach of content on LinkedIn, advertising offers an alternative that many may not have previously considered. When done the right way, as per AJ's suggestions, this can be cost-effective and successfully reach an entirely new audience for your B2B products or services.

About AJ Wilcox

AJ Wilcox is a LinkedIn Ads pro who founded B2Linked.com, THE LinkedIn Ads agency, in 2014. He's managed over $150M in spend on the platform and his company are official LinkedIn partners.

AJ is host of the LinkedIn Ads Show podcast, and has managed 5 of the world’s top 10 LinkedIn Ads accounts.

Follow AJ and subscribe to his newsletter for weekly tips.

About Lynnaire Johnston

I’m Lynnaire Johnston, an internationally respected LinkedIn strategist, trainer and content creator. I’m the author of Link∙Ability, 4 powerful strategies to maximise your LinkedIn success and co-author of Business Gold – Building Awareness, Authority and Advantage with LinkedIn Company Pages, both available on Amazon. I’m also the creator of the Link∙Ability members community for those who are serious about LinkedIn and am ranked in the top 20 LinkedIn experts worldwide.

To learn more about LinkedIn and how to use it to advance your professional goals, please connect with or follow me. I post several times a week and always with something of value.

If you're looking to leverage LinkedIn to achieve your professional goals and would like to know how I could help you do that, please DM me.

#linkedIn

#marketing  

#digitalmarketing 

#advertisingandmarketing 

#socialmedia

#socialnetworking

#socialselling