April 16, 2019
Boost Ecommerce Growth With New Pinterest & Instagram Advertising Features
So, you just set up a new campaign on LinkedIn. You’ve got your targeting all squared away, your ad units all built out, and you’ve decided on budgets for the month, but WAIT…
How should you bid?
This is a question many B2B advertisers struggle with, and for good reason—there are a number of LinkedIn bidding options. Should you bid CPC or CPM? Should you use a manual bid or an automatic bid? How high should you bid? Should you enable conversion optimization?
Do not fret! We will cover all of these very valid questions, so by the end of this post, you’re going be a LinkedIn bid MASTER.
First things first, you have to decide how you are billed. When bidding CPC (cost per click) you are billed on a per click basis, while CPM (cost per thousand impressions) bidding bills you based on the number of users who see your ad but have not necessarily clicked on it.
In most cases, we recommend bidding CPC, as this gives advertisers more control over performance. If you know the rate at which users convert post-click, then you can easily back into an appropriate CPC bid that gets you to your goal using the following methodology:
CPC Bid = Historical Conversion Rate * CPA Goal
So, when is the right time to employ a CPM bid? If your campaign has a CTR well above LinkedIn’s average (anything above 1%), a CPM bid will be more effective and will result in more impressions and clicks overall. In this case, CPC bids are ineffective because they lead to exorbitantly high CPMs, missing out on potential incremental traffic to your site. Let’s look at a good example:
Since campaign 2 has a relatively high CTR and is billed on a CPC basis, this advertiser is paying exorbitantly higher CPMs on this audience compared to campaign 1. Also, even though campaign 2 has spent more than the first campaign, it is actually delivering fewer impressions because of the high CPM for this audience.
Assuming the same CTR of 1.47% and an $80 CPM bid, this would result in an average CPC of $5.44 (compared to our current average CPC of $7.03). This ensures that we avoid overpaying for clicks, and ultimately gets us more clicks and conversions within the same budget.
Another instance when you should consider CPM bidding on LinkedIn is for campaigns focused on brand awareness. If you are trying to reach the maximum number of possible people in your audience, and you are less concerned with clicks and CPA goals, then CPM bidding can make sense.
On LinkedIn you should opt for a manual bid 9 times out of 10. Why? While many advertising platforms will not charge you more than the next highest bidder, LinkedIn tends to overcharge for clicks. Autobidding on LinkedIn essentially gives LinkedIn the green light to charge you whatever they want, which we do not recommend.
That said, there are certain scenarios in which an automatic bid may be appropriate. For example, if the LinkedIn audience you are targeting is a very qualified list of opportunities in your pipeline, and you want to stay top of mind for these users to ensure that they close, then an automatic bid can help ensure that you capture the bulk of the impression share for that audience.
Deciding where to start your bid when launching a new campaign can be tough, especially if you do not have any historical performance data on the campaign you’re launching. When launching a new campaign, we always recommend starting with the suggested bid level. After you have a couple weeks of performance data, check how consistently you are capping out on budgets.
Are you capping budget consistently? If so, try bidding the audience down 10%, and after another couple weeks, reevaluate your volume levels. Did bidding down result in a significant loss in impressions or make it impossible to spend your budget? If not, consider bidding down another 10%. Continue with this process until you find that bidding “sweet spot.”
The last decision you have to make is whether to optimize for clicks or conversions. When launching a new campaign, we recommend optimizing for clicks to start with. If your campaign has a significant number of conversions within any one week period (at least 15), we recommend enabling conversion optimization for the campaign.
Enabling conversion optimization changes the way LinkedIn serves ads to your audience by prioritizing impressions delivered to users LinkedIn finds more likely to convert. LinkedIn bases this on behavior of users that have previously converted. Additionally, if LinkedIn determines that a given user is highly likely to convert, it may charge you a CPC slightly higher than your bid.
That said, if you do not have significant conversion volume in any one-week period, we recommend keeping conversion optimization disabled to ensure that LinkedIn does not overcharge you for clicks that are not actually high quality.
Whether you decide to bid CPC or CPM, automatic or manual, LinkedIn bid strategies play a key role in the performance of your campaigns, and understanding when to leverage which strategy can really take your paid social strategy to the next level!