What’s the Cost of LinkedIn Ads? (+ How to Optimize)

LinkedIn ads’ average cost per click is between $5 and $10. The rate depends on your ad objective, target audience, bidding strategy, and relevance score. Learn the factors that determine cost and how to optimize it.

Here, you’ll find:

• What is the average LinkedIn ad cost?
• How do LinkedIn advertising costs work?
• What factors affect this cost?
• Different types of LinkedIn ads
• How to lower the cost of LinkedIn ads
• Frequently asked questions

LinkedIn is one of the best ad platforms for B2B brands. But it’s also comparatively expensive.

We spoke with HawkSEM President Rambod Yadegar about this.

“Even though LinkedIn might be pricier than platforms like Meta, the better ROI usually offsets that cost,” says Yadegar. “LinkedIn offers strong targeting options and other advertising capabilities.”

Our team has consistently helped clients achieve excellent results from LinkedIn ads at a low cost by using detailed audience segmentation, specialized content formats, and other optimization tactics.

You have to understand these features to enhance the effectiveness of your campaigns.

So, how much does a LinkedIn ad cost? Let’s get into it.

What is the average LinkedIn ad cost?

LinkedIn ads have three main pricing models: CPC (cost per click), CPM (cost per thousand impressions), and CPS (cost per send).

• CPC: The average cost ranges from $5 to $10 per click. You pay each time someone clicks on your ad.
• CPM: The average cost ranges from $6.50 to $35 per thousand impressions. You pay for every thousand times your ad is seen.
• CPS: The average cost is between $0.50 to $1 per send. This model is used for Sponsored InMail campaigns, where you pay per message sent.
• Typical Campaign investment: From our experience, clients typically invest between $3,000 and $25,000 each month on LinkedIn Ads.

In subsequent sections, we’ll discuss these pricing models (and how average LinkedIn ad cost is determined).

How do LinkedIn advertising costs work?

LinkedIn relies on an auction system to determine which ads to display and how much you pay.

When you set up an ad campaign, it competes against other ads targeting the same audience. This auction decides which ads get shown and their cost.

Here’s how it works:

When a LinkedIn user fits your targeting criteria (the specific traits of your ideal audience), LinkedIn runs an auction to decide which ad to show them.

Your bid (how much you’re willing to pay), the relevance of your ad (how well it matches the user’s interests), and competition (the number of other advertisers) affect the auction’s outcome.

For example, if you’re targeting senior executives in a specific industry, your ad enters an auction against other ads aimed at the same group. The auction system ensures the ads most likely to engage the user are displayed.

Let’s examine the factors that decide how much you pay for LinkedIn ads.

What factors affect this cost?

There are four factors that affect the cost of LinkedIn ads:

• Ad objective
• Target audience 
• Bidding strategy
• Ad relevance score

1. Ad objective

Your objective is the action you want users to take after seeing your ad. It shapes how LinkedIn optimizes and charges for your campaign.

Objectives also affect which ad formats, optimization goals, and bidding strategies are available for your campaigns.

They’re grouped into three categories: awareness, consideration, and conversion.

Here are the specific campaign objectives:

• Brand awareness: Focuses on increasing your brand’s visibility through impressions. This can be more expensive because it aims for maximum reach, showing your ad to as many people as possible.
• Website visits: Drives traffic to your website by encouraging users to click on your ad. The cost depends on the number of clicks your ad receives.
• Engagement: Encourages users to interact with your posts through likes, comments, shares, or follows. Costs vary based on the level of interaction your ad generates.
• Video views: Optimizes for getting users to watch your videos. You’re charged based on the number of views your video receives.
• Lead generation: Uses LinkedIn forms pre-filled with user data to capture leads. This can be costlier per interaction but often provides high-quality leads.
• Website conversions: Tracks and optimizes for specific actions on your website, such as downloads or form submissions. This objective typically involves higher LinkedIn ad costs since it aims to drive high-value user actions.

Different objectives affect costs in distinct ways.

For instance, brand awareness campaigns can be more expensive because they aim to reach a broad audience. In contrast, website visit campaigns usually have lower costs per click, but these clicks may not convert into leads or sales, potentially lowering the return on investment.

Understanding these cost dynamics helps you budget properly based on your ad objective.

2. Target audience

More specific and in-demand audiences tend to be more expensive. Because when many advertisers target the same audience, LinkedIn’s auction system becomes more competitive.

Advertisers must bid higher to win impressions or clicks.

For example, if many companies want to show ads to CMOs in the finance sector, they all bid for the same limited slots. This drives the cost higher.

So, the target audience you choose directly impacts your LinkedIn ad costs.

You’ll find a range of targeting options on LinkedIn campaign manager:

• Demographics: Target users based on location, age, gender, and education level
• Job details: Narrow your audience by job titles, functions, seniority, and company size
• Interests and traits: Target based on skills, group memberships, and follower interests

Understanding how LinkedIn targeting works can help you better strategize your campaigns to balance between cost and audience specificity.

Further reading: LinkedIn Ads Audience Targeting: Everything You Need to Know

3. Bidding strategy

LinkedIn offers three main bidding strategies: maximum delivery, cost cap, and manual bidding. These strategies help you control your budget in the ad auction.

(I) Manual bidding

Manual bidding gives you complete control over your bid amounts. You set bid value for each click, impression, lead, or sale.

This strategy requires more hands-on management.

It’s beneficial if you clearly understand the value of your results and want to control your spending directly.

(II) Maximum delivery bidding

Maximum delivery bidding (automated bidding) uses machine learning to automatically adjust your bids. It aims to maximize your results — like clicks, impressions, leads, or sales — within your ad budget.

This strategy is useful if you want LinkedIn to handle bidding for you and focus on getting the most out of your total budget.

(III) Cost cap bidding

Cost cap bidding lets you set a maximum cost per result (such as per click, impression, or lead). LinkedIn will try to keep your costs below this cap by targeting the lowest-cost events first.

This strategy helps control spending and keeps costs predictable. It’s particularly helpful for small businesses with a limited ad budget.

When you set a cost cap, LinkedIn’s system learns and adjusts to optimize performance while staying within your cost limits.

4. Ad relevance score

The ad relevance score measures how likely your ad is to engage your target audience compared to other ads. It affects the visibility of your ads and the cost you pay.

LinkedIn uses this score to predict how well your ad will perform.

When your ad competes in an auction, LinkedIn calculates its predicted click-through rate (pCTR) based on its expected engagement. This pCTR is compared to other ads targeting the same audience.

Then, LinkedIn averages these scores from multiple auctions to create your campaign’s quality score, which ranges from 1 to 10. A score of 10 indicates the highest expected engagement.

A high relevance score suggests your ad will likely be shown to your selected audience. This reduces the bid amount needed to win auctions and lowers overall costs.

Conversely, a low relevance score may require you to bid higher to achieve the same visibility.

Further reading: How to Build Full-Funnel Marketing on LinkedIn (+ Why You Should)

Different types of LinkedIn ads

The way your ad objective, target audience, bidding strategy, and ad relevancy score affect your ad cost depends on your LinkedIn ad type.

Each type interacts differently with the auction system, influencing the overall cost of LinkedIn ads campaign.

For example, some ad types might be more expensive because they offer richer media formats or more prominent placements, which typically engage users more and drive higher bids.

LinkedIn offers four broad types of ads:

• Sponsored content
• Sponsored messaging
• Lead gen forms
• Text and dynamic ads

1. Sponsored content

Sponsored content appears directly in the LinkedIn news feed, appearing as regular posts. This helps increase user engagement because the ads feel less intrusive.

This ad type supports single image, video, carousel, and document ad formats.

It’s useful for various objectives, including brand awareness, driving website visits, encouraging engagement, generating leads, and tracking website conversions.

With these ads, you can use automated bidding to maximize results, set a cost cap to control spending, or manually adjust bids for more control over your budget.

2. Sponsored messaging

Sponsored messaging lets you engage your audience directly through LinkedIn’s messaging platform. This ad type helps you start conversations with professionals more personally and directly.

Sponsored messaging includes two main formats:

• Message ads: These ads send direct messages to your target audience’s LinkedIn inbox.
• Conversation ads: These ads offer a more interactive experience where you create a branched dialogue that guides users through different options based on their responses.

Sponsored messaging is effective for objectives like lead generation and event registration.

You can apply the CPS bidding strategy to control your budget effectively.

3. Lead gen forms

Lead gen forms involve capturing leads directly within LinkedIn ads. These forms are pre-filled with LinkedIn profile data, making it easy for users to submit their information without leaving the platform.

Lead gen forms are ideal for collecting contact information, such as names, email addresses, job titles, and company names.

You can use it with various ad formats, including single-image ads, video ads, and sponsored messaging. To encourage users to provide their contact information, you can also offer documents like whitepapers, reports, or eBooks.

This flexibility lets you pick the best format for engaging your audience and capturing leads.

For lead gen forms, you can use bidding strategies like manual bidding to control your budget.

4. Text and dynamic ads

Text ads are simple, cost-effective ads consisting of a short headline, description, and a small image.

They appear in LinkedIn’s right rail and are ideal for promoting offers and events or driving traffic to your landing page on a budget.

Dynamic ads are personalized ads that appear in the right rail and other prominent locations on LinkedIn.

There are three types of dynamic ads: spotlight ads, follower ads, and content ads.

These ads use the LinkedIn member’s profile information to create a personalized experience. For example, the ad may include the viewer’s profile picture or name, making the ad feel more relevant and engaging.

This personalization can result in higher click-through rates (CTR) and better ad performance.

Both text and dynamic ads can be used for various objectives, including brand awareness, website visits, and engagement. They offer flexible bidding options to control your advertising budget effectively.

Further reading: Best Practices for LinkedIn Text Ads: Full Guide (+ Costs)

How to lower the cost of LinkedIn ads

LinkedIn advertising can be relatively expensive. But there are ways to lower, control, and manage the cost.

Here are six tips:

1. Optimize your target audience

Narrow your audience to those most likely to engage with your ads.

Use LinkedIn’s detailed targeting options to focus on specific industries, job titles, roles, or skills.

This reduces wasted spend on uninterested users.

Further reading: How to Build a Target Audience: 6 Steps to Find Yours

2. Enhance ad quality

Use high-quality images and clear, compelling ad copy.

Ads that are visually compelling and relevant to your audience can enhance engagement rates and lower LinkedIn ad pricing.

A/B test different ad variations to find the most effective combinations.

3. Set daily and lifetime budgets

Control your spending by setting daily and lifetime budgets for your campaigns.

This prevents overspending by ensuring you have a set limit on how much you can spend each day and over the entire campaign duration.

4. Refine your ad schedule

Display your ads during hours when your target audience is most active on LinkedIn. This can increase engagement rates and lower costs.

Use LinkedIn’s scheduling tools to set specific times and days to run your ads.

5. Take advantage of retargeting

Use LinkedIn’s retargeting options to reach people who’ve already interacted with your brand.

This results in higher conversion rates because these users are already familiar with your business, which can lower your average cost of LinkedIn ads.

6. Monitor and adjust your campaigns

Regularly analyze your campaign’s performance and make adjustments as needed.

Pause underperforming ads and re-allocate more marketing budget to high-performing ones.

Use LinkedIn’s analytics tools to track key metrics and optimize your strategy.

At HawkSEM, we use ConversionIQ in addition to LinkedIn’s in-built analytics.

It’s our proprietary marketing tool that helps us track marketing campaigns at a more granular level. This ensures we’re tracking every step of the customer journey and optimizing the campaign in real-time to deliver a personalized experience.

All HawkSEM clients get free access to ConversionIQ. Contact us to learn more.

Further reading: 10 Proven Steps to LinkedIn Ads Success

Optimize your LinkedIn ad costs with HawkSEM

HawkSEM is a digital marketing agency that works with brands like Nike, Honda, Microsoft, and Verizon. We offer end-to-end social media marketing services.

We’ve helped brands leverage social ads to capture more leads, drive higher sales, and accelerate business growth.

For instance, Feedzai, the world’s first RiskOps platform for financial risk management, saw a 28% jump in click-through rate than the average LinkedIn CTR. Our team increased its conversion rate by 10% and boosted its sales pipeline.

We have a team of social media ad specialists with extensive experience working on LinkedIn advertising campaigns for B2B and B2C clients in industries, such as SaaS, finance, healthcare, ecommerce, and more.

If you need help running and managing successful LinkedIn ad campaigns, book your free consultation today.

“Several ad types and formats, multiple bidding strategies, and many factors affecting ad costs — all these make creating, running, and managing LinkedIn ad campaigns challenging,” says Yadegar.

“Effectively managing these elements is key to leveraging LinkedIn’s full potential for business growth. And this takes time, experience, and technical skill. More brands should consider getting help from experts.”

Further reading: Top 14 LinkedIn Ads Agencies that Drive B2B Success

Frequently asked questions

How much does a LinkedIn ad cost?

The average cost per click for LinkedIn ads ranges from $5 to $10. It’s between $6.50 and $35 per thousand impressions (CPM) and $0.50 and $1 per message sent (CPS). These costs vary and depend on your target audience, bidding strategy, and ad relevance.

Are LinkedIn paid ads worth it?

Yes, LinkedIn paid ads are worth it, especially for B2B marketing.

LinkedIn’s advanced targeting capabilities allow you to reach specific professionals and decision-makers. You can tailor your ads to objectives like brand awareness, lead generation, and engagement. This makes LinkedIn a key platform to achieve your diverse marketing goals.

What is a reasonable budget for LinkedIn ads?

A reasonable budget for LinkedIn ads depends on your advertising goals and campaign duration.

LinkedIn needs a minimum daily budget of $10 and a minimum lifetime budget of $100 for new campaigns.

For new advertisers, a daily recommended budget for LinkedIn ads is $25. Existing advertisers may consider $50 to $100 per day.

Are LinkedIn ads better than Facebook and Google ads?

It depends on your use case and target audience. LinkedIn ads are effective for B2B marketing and reaching professionals.

LinkedIn can provide a better return on ad spend despite being more expensive if your audience is active on LinkedIn, especially for business-related products or services.

Further reading: LinkedIn Ads vs. Facebook Ads: Pros, Cons + Comparisons

The takeaway

With over one billion members, LinkedIn is one of the best advertising platforms.

You can reach out to (and engage) a highly targeted audience to meet a range of your marketing objectives.

But ads on LinkedIn cost high. Especially if you don’t have prior experience planning and optimizing your campaigns.

So, take your time to plan the campaign effectively. Target the right users, bid thoughtfully, maintain quality in assets (text, image, video), and A/B test aggressively to find the optimal combination.

If you need help or want to consult, talk to our LinkedIn ads specialists.