Contributor AJ Wilcox discusses what kinds of businesses should be advertising on LinkedIn and those that should probably avoid the platform altogether.
All too often, I hear two complaints about LinkedIn Ads:
- It’s too expensive.
- It doesn’t work.
Generally, when I hear this feedback, it’s from those who don’t have the right business to be advertising on LinkedIn. So I thought I’d share what types of businesses should be using LinkedIn, as well as those that should avoid the platform.
Who should advertise on LinkedIn
The three verticals that tend to work best are:
- high-value B2B products & services;
- recruiting efforts; and
- higher education.
High-value B2B products & services
Subscription services (like SaaS) tend to work well because the predictable revenue over time tends to mean higher profits per customer to the business. Your business model needn’t include a subscription component to be successful, though.
What you do need is for the value of your sale to be high enough to justify the elevated cost per click of LinkedIn Ads over that of other social ad channels. My rule of thumb is that companies whose average deal size is over $15K will likely be very successful here.
Not having an employee in place costs many thousands of dollars in lost productivity, and recruiting that missing talent often leaves companies with large recruitment fees. Recruiting is an expensive game for companies, but not on LinkedIn.
LinkedIn visitors are constantly thinking about their next career advancement, so advertising a hot new position to them is going to catch their eye.
Plus, the platform allows you to target very specific professional traits. For instance, if you’re looking to hire a Marketing Director, you could target job title “Marketing Manager” to attract those who might be willing to move for a title advancement, as well as the job title of “Marketing Director” to get applicants who’ve already proven adeptness in that position.
LinkedIn education targeting is extremely powerful. You can show your ad only to people who have achieved a bachelor degree, but not any graduate degree, target college grads whose degree was in a particular area of study, or even target by which school they attended. And since this data is normal information they’d put on their profiles, you can do it at scale.
Since those visiting LinkedIn tend to be heavily invested in improving themselves, it’s a pretty natural form of communication that should get a positive response.
Who shouldn’t be advertising on LinkedIn
Now that we’ve covered businesses which see success, we should also address those that should probably avoid the platform altogether:
- B2C companies
- Smaller deal sizes (<$10K)
- Broad targets
- Ad agencies
If you’re marketing to consumers, the best targeting available is going to be on Facebook and Twitter Ads. LinkedIn simply doesn’t have the targeting parameters to make the most of your audience. Add to that the fact that LinkedIn clicks are costly (typically around $6 to $8) and B2C orders are generally quite small in comparison to B2B purchases, and it doesn’t sound like a great economic proposition.
Smaller deal sizes
Since the clicks on LinkedIn are more costly than on other platforms, you have to close larger deals to get a similar return. If your deal sizes are small, you’ll likely end up spending more on ads than makes sense.
The magic of LinkedIn Ads is in the targeting. If your target is broad (e.g., all marketers or women), you’re better off using other channels that will allow you to reach more of that segment, at a lower cost per contact.
Users on LinkedIn are generally not surfing around with their credit cards out. So buy-now calls to action are not likely to work.
I’ve run LinkedIn Ads for many ad agencies, and there is a common thread among their performance — it’s insanely hard to get marketers to click on an ad for an ad agency.
This isn’t to say that we’d see poor conversion rates from traffic or anything like that; ads just tend to not receive a high enough click-through rate (CTR) for the platform to continue granting impression volume.
My hypothesis is that we as marketers know so many agencies already that the prospect of getting to know another one feels like a burden. But whatever the cause, I don’t recommend that agencies count on LinkedIn Ads as a significant source of lead volume. That is, unless your agency provides a unique offer that relieves a large pain in your audience.
Such an important part of good ad performance on LinkedIn is securing a good CTR. Commodities (like real estate, bank loans or insurance sales) are rarely able to get good CTRs because the audience has several practitioners of those professional services in their network already.
I’ve found LinkedIn members don’t click on an ad from a real estate agent, because they know they can ask any friend or coworker who they use and get an immediate referral.
If you don’t have an obvious, significant point of differentiation, it’s going to be difficult to get traffic.
Of course, there are exceptions to every rule, so there may be some of these fringe cases who are doing well on the platform. The smartest marketers test everything!
Hopefully, though, this will be a good rule of thumb if you’re considering advertising for your brand.
LinkedIn Ads is too… ?
To answer the initial objections here, clicks from LinkedIn Ads are certainly more expensive than other social clicks — no bones about it. Those who are getting significant returns from their campaigns are those who are reserving their costly clicks for their highest-value customer.
Sure, maybe the bulk of your business comes from small to midsize companies, but you can target upmarket to those large- or enterprise-sized deals with LinkedIn because those are the ones that will provide the biggest return.
It’s much easier to justify higher costs when the leads are worth so much more. These situations are where you realize the elevated CPCs are worth paying.
The vast majority of the time, when I hear from people that “X platform doesn’t work,” it’s because they didn’t understand the platform or user, and therefore, they presented the wrong ad at the wrong time.
Often, I see this from search folks, because they’re used to dealing with search audiences who are essentially begging for a solution to their problem because it’s a very bottom-of-the-sales-funnel type of activity.
Social, on the other hand, is different. Social users haven’t requested to see your offer. No one is surfing their LinkedIn feed thinking, “Gee, I’d really like to hop on a call with a salesperson right now.” For that reason, we need to approach with a more mid- to top-of-funnel offer to start the conversation. Most often, this comes in the form of a gated white paper or other informational asset.
If you understand the frame of mind of your user and present an appropriate offer, you’ll certainly become convinced that LinkedIn Ads do work.
If I described your company in the “Who Should Advertise on LinkedIn?” section, here’s your homework:
- Navigate to http://www.linkedin.com/ads.
- Create an Ads account.
- Create a campaign and explore the various available targeting segments to find your highest-value dream customer.
Next you’ll want to get your assets in order:
- Prepare one or two landing pages with gated content so you can test, as one offer will generally perform better.
- Come up with one to two ads per offer so you can test messaging, as one will likely prove more compelling.
Launch and analyze:
- Launch your campaign with low bid and budget to test the waters as inexpensively as possible.
- Analyze your early results. Even if it’s just comparing CTRs or early lead volume, you should be able to see what has promise and what’s limping.
Approaching LinkedIn Ads properly will ensure that you aren’t wasting money on the wrong platform for your business and that you’re generating the leads that your sales team will shout “Hooray!” over.
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