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

The average cost per click for LinkedIn ads is between $5 and $10. However, the total cost is influenced by factors like your campaign objective, target audience, bidding strategy, and relevance score. 

With over 1 billion members, LinkedIn is one of the most powerful ad platforms for B2B brands to connect with their target audience.

But this precision comes at a cost.

LinkedIn ads are typically more expensive than other paid social platforms — making it crucial to understand what you’ll pay and how to make the most of your budget.

“LinkedIn might be pricier than platforms like Meta,” says HawkSEM co-founder and President Rambod Yadegar. “But the better ROI usually offsets that cost.”

In this guide, we’ll break down those costs as well as how to optimize campaign performance for the highest return.

What is the average LinkedIn ads cost?

On average, Linkedin ads cost:

• CPC (cost per click): $5 to $10 per click
• CPM (cost per thousand impressions): $6.50 to $35 per thousand impressions
• CPS (cost per send): $0.50 to $1 per sponsored message sent
• Typical campaign investment: From our experience, clients typically invest between $3,000 and $25,000 each month

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

How the LinkedIn auction system works

When you set up an ad campaign, it competes against other ads targeting the same professional 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 influences the cost of LinkedIn ads?

Key factors that affect LinkedIn campaign costs are campaign objective, target audience, bidding strategy, and ad relevance score.

1. Campaign objective

Your campaign objective is the action you want users to take after seeing your ad. They are grouped into three categories: awareness, consideration, and conversion.

LinkedIn uses these goals to charge based on the actions you want to achieve.

For instance, brand awareness campaigns aim to increase your brand’s visibility through impressions. This objective often comes at a lower cost but aims for maximum reach to show your ads to as many people as possible.

A lead generation campaign uses LinkedIn forms pre-filled with user data to capture leads. This can be costlier per interaction but often provides high-quality leads.

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

2. Target audience

Highly specific and in-demand audiences lead to a more competitive ad auction — and higher costs.

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.

That said, more targeted ads tend to yield higher quality leads (and a higher ROI).

LinkedIn advertisers can target their audience based on:

• Demographics: Location, age, gender, and education level
• Job details: Job titles, job function, seniority, and company size
• Interests and traits: Skills, group memberships, and follower interests

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.

Manual bidding: The advertiser sets the bid value for each click, impression, lead, or sale.

This strategy requires more hands-on management and is beneficial for those who want to control spending.

Maximum delivery bidding: With machine learning, LinkedIn uses automation to adjust bids to maximize results — like clicks, impressions, leads, or sales — within your ad budget.

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

This is an effective strategy to control spending and keep costs predictable. It’s particularly helpful for small businesses with a limited ad budget.

4. Ad relevance score

Ad relevance score measures the likelihood of your target audience to engage with your ad compared to other ads.

In other words, it predicts how well your ad will perform and affects the visibility of your ads and the cost you pay.

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 reduces the bid amount needed to win auctions and lowers overall costs.

Conversely, a low relevance score may require a higher bid.

“Effectively managing these elements is key to leveraging LinkedIn’s full potential for business growth,” says Yadegar.

“This takes time, experience, and technical skill. More brands should consider getting help from experts.”

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

Is there a minimum spend for LinkedIn Ads?

The minimum daily budget required for LinkedIn ads is $10, regardless of the ad format.

For a new, inactive campaign, the minimum lifetime budget is $100.

After launch, the lifetime budget shifts to the minimum daily budget of $10 — multiplied by total days scheduled.

LinkedIn ad formats (+ how they affect cost)

LinkedIn ad costs depend on more than just targeting and bidding — they are also influenced by the type of ad format you use.

Different ad types compete in different auctions, appear in different placements, and drive different engagement rates.

Some offer richer media, more prominent placements, or direct inbox access, all of which demand higher bids and CPCs.

LinkedIn offers four broad types of ads:

1. Sponsored content

Sponsored content appears directly in the LinkedIn 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.

Cost impact: These ads typically have higher CPCs because they appear in the main feed (as opposed to right-rail ads). However, they tend to deliver stronger engagement and conversion rates.

2. Sponsored messaging

Sponsored messaging lets you engage your audience directly through LinkedIn’s messaging platform.

Sponsored messaging includes two main formats:

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

Cost impact: Messaging ads generally come at a higher cost per send or click because they offer a direct channel to your target audience. These costs can easily be offset due to the ad type’s higher conversion rates for event promotions, demos, or gated offers.

3. Lead gen forms

Capture leads directly from your ads with pre-filled forms, making it easy for users to submit their information without leaving the platform.

You can use lead gen forms with various ad formats, including single-image ads, video ads, and sponsored messaging.

Cost impact: While CPCs may be similar to other formats, cost per lead (CPL) often decreases because the friction is lower. This format can significantly improve conversion rates for B2B campaigns.

4. Text and dynamic ads

Text ads are simple, cost-effective ads consisting of a short headline, description, and a small image, appearing in LinkedIn’s right rail.

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 member’s LinkedIn 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.

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.

Cost impact: Dynamic ads tend to cost more than standard text ads because of the personalization capabilities and higher visibility — but they are generally still less expensive than sponsored content.

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

What is a good budget for LinkedIn ads?

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

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

At HawkSEM, our clients typically invest between $3,000 and $25,000 in LinkedIn Ads each month.

How to lower the cost of LinkedIn ads

LinkedIn advertising is generally more costly than other PPC platforms; however, there are ways to lower, control, and manage the cost.

Here are six tips:

1. Refine your audience targeting

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

Spend time defining your buyer persona and then 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. Optimize ad creative

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 days of the week when your target audience is most active to drive a higher return for a lower cost.

Dedicate more budget to peak days while pulling back on lower-performing days. 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 for conversion tracking and insights into key metrics to optimize your strategy.

Further reading: 10 Proven Steps to LinkedIn Ads Success

Example of LinkedIn Ads success

HawkSEM partnered with Radar, a geolocation platform, to transform LinkedIn from a brand-awareness channel into a high-performing lead generation engine.

By revamping creative messaging, highlighting real-world use cases and testimonials, and implementing full-funnel campaigns with retargeting and native LinkedIn lead gen forms, we improved engagement and lead quality.

The results:

• 154% increase in CTR
• 100% more leads
• 61% decrease in cost per lead.

Within a single quarter, we also doubled conversion rates and increased clicks by 1,282% while lowering CPC and cost per conversion.

The takeaway

When it comes to B2B advertising, LinkedIn ads are one of the most effective ways to reach the right audience, see a higher ROI, and start generating leads quickly.

But LinkedIn marketing isn’t cheap — especially if you don’t have experience planning and optimizing your digital marketing campaigns.

Target the right users, bid thoughtfully, use high-quality ad assets (text, image, video), and A/B test to find the optimal combination and avoid wasted ad spend.

Looking for some help with your PPC marketing strategy?

At HawkSEM, we’ve helped brands like Honda, Microsoft, and Verizon make the most of their marketing efforts through social media ads that capture more leads, highlight thought leadership, drive higher sales, and accelerate business growth.

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.

This article has been updated and was originally published in June, 2024.