LinkedIn is the most expensive digital advertising platform but is it worth it?

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LinkedIn is the most expensive digital advertising platform but is it worth it?
Why is Linkedin the most expensive social media platform for advertisers?Unsplash
  • Over the years, the professional networking site LinkedIn has managed to carve a niche for itself in the business-to-business segment.
  • This popular marketing tool is also the most expensive digital advertising platform on the internet.
  • We speak to digital advertising agencies to find out why it is expensive if it is worth it and how can advertisers make the most of it on a small budget.
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If you've ever tried running advertisements on the professional networking site LinkedIn, then you probably will have noticed that they generally cost a lot more per click and per 1000 impressions (CPM) than Google Ads and Facebook Ads. It is the most expensive digital advertising platform of them all in India.

For example, we tried boosting an article on Facebook and LinkedIn with a similar allocated budget of ₹2,000. Facebook’s average Cost Per Click (CPC) was as low as ₹0.51 but LinkedIn cost us around ₹20.
LinkedIn is the most expensive digital advertising platform but is it worth it?
Linked vs Facebook advertising cost

Why is LinkedIn advertising more expensive than other platforms?

After boosting our articles on both these platforms, we found that Facebook uses demographic and interest-based targeting that directly targets consumers, while LinkedIn focuses more on professional targeting. So, LinkedIn is more suited for B2B commerce and Facebook is generally better for B2C targetting.

While the cost and objectives vary from brand to brand, Aashka Mehta, media lead at advertising agency Schbang, says, “The cost to advertise on LinkedIn is almost 15-20X more expensive than on Facebook.”

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“LinkedIn’s level of targeting is very different from other platforms. It is niche and hence the additional cost for the same,” adds Mehta.

LinkedIn makes it easy for a brand to segment its audience and reach one like-minded set of people at a time. It offers rich demographic data points such as job function, seniority, company name, geography, industry, interest-based targeting group membership, skills, etc.

Telling us when are LinkedIn ads commonly used by a brand, Shradha Agarwal, ceo and co-founder of digital agency Grapes, says, “LinkedIn Ads campaigns are usually being used for job recruitment ads, service and product sales, lead generation, promoting content, increasing visibility, and reaching for a new company location. And if we have to compare getting relevant traffic to the website, Linkedin is at least 5X of Facebook and 2X of Twitter. However, conversions are way better.”

For N Chandramouli, ceo of TRA Research, which is a brand intelligence and data insights company, LinkedIn has become ‘official WhatsApp’ of sorts.

He gave us an example of how expensive LinkedIn’s lead generation can be, which is considered to be its most effective form of marketing on the networking site.

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“Per lead could be a person, a company or anything that I'm seeking. If you were to advertise, this could go up to about ₹1300 per lead, which is a very expensive lead generation point. But if you use the platform intelligently, not wildly spend like Facebook -- from over a few lakhs of rupees, you can get it down to ₹200 per lead. The amount of spends can go from as low as $1,000 or even lesser per month to maybe $10,000 or even higher per month. So, it all depends on how active you really want your campaign to be.”

Is LinkedIn gaining more attention from advertisers now?

After the advent of social media and the internet, marketing trailblazers have started chasing return on investment (ROI) on their marketing strategies. They have shifted their focus away from monthly reports to taking insight-based decisions.

To understand what ROI on LinkedIn means, as an example, let’s say you spent $5,000 on LinkedIn ads and it generated $10,000 in revenue from those ads. Here’s how you can track your ROI:

Marketing ROI (%) = [($10,000 - $5,000) / $5,000] * 100
Marketing ROI (%) = 100%
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While LinkedIn is not a low-cost medium, it is known to yield a positive marketing ROI and marketers say it is worth it.

“It has a promising conversion rate of 6-8%! At $5.26, LinkedIn has the highest CPC compared to other social media platforms. However, this doesn’t mean that LinkedIn’s ads are overpriced. Rather, it just shows how highly ‘clicks’ are valued on this platform,” says Shrenik Gandhi co-founder and CEO of digital advertising agency White Rivers Media.

For its ability to deliver targetted audience and concrete ROI, Rajni Daswani, director of digital marketing at advertising agency SoCheers, also says expensive advertising on LinkedIn is worth it.

“There is no other platform that gives you a direct audience with the educated, working-class, bread earners in the family kind of people. A lot of brands are seeking this data and are willing to pay the expensive rates that come with it.”

LinkedIn’s growth story and what lies ahead
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LinkedIn has seen massive growth in its users after the pandemic.

As per research and analytics platform NapoleonCat, LinkedIn had an audience reach of 89 million people in India in April 2022, which accounted for 6.3% of its entire userbase. On the other hand, social media platform Facebook’s user base in India in April 2022 was 400 million.

Currently, India is the second-largest market for LinkedIn. Around the time when the coronavirus outbreak started blanketing the globe, LinkedIn’s user base in India was recorded at 67 million in April 2020.
LinkedIn is the most expensive digital advertising platform but is it worth it?
LinkedIn's user growth

With 810 million users worldwide, LinkedIn has become the backbone of the global business community. For any working professional, it is a platform that allows you to make a first impression on your prospective employers, help you build your community and amp up your skills.

Advertisers are using LinkedIn to avoid shouting into a void. This professional networking platform gives them targetted B2B audience. So, it is also increasingly taking up more of brands’ budgets.
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LinkedIn’s ad revenue exceeded $1 billion in 2021 and its overall revenue grew by 37%.

Sharing the reason behind the recent influx of B2B advertisers, Sachin Sharma, Director, LinkedIn Enterprise Marketing Solutions India, says, “As we emerge from the pandemic, building a community has never been more important. Our 88 million member strong professional community in India of customers, marketers, advertisers are all turning to LinkedIn at this time to learn, connect, and share information and knowledge — and LinkedIn has been uniquely positioned to foster this community. We are a top 3 player in B2B digital advertising today, and our community is the backbone of this record-breaking growth. With our targeting features, they are better able to reach the right, and highly engaged, professional audience so they can be more precise with the ads they show. We're also making the right investments by training our bidding models to be smarter in how we bid, which is improving ROI for our customers and bringing them more value for their campaign spends and driving more conversions.”

LinkedIn is the most expensive digital advertising platform but is it worth it?
Advertising revenue generated by LinkedIn year-on-year

According to LinkedIn, f our out of five of its users have the power to impact business decisions. These movers and shakers also have 2x the buying power of typical online audiences. While Facebook has more users than LinkedIn across the world, some advertisers find LinkedIn more lucrative than other networking platforms.

Gandhi explains why LinkedIn gets more preference in the brandverse.

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“LinkedIn’s competitive advantage is that it is a professional networking site. While Facebook boasts over 2 billion people, LinkedIn has 600+ million professionals - In digital advertising, quality reigns supreme over quantity! Compared to other social media platforms, LinkedIn advertising is more expensive but it is certainly not overpriced for the value it provides.”

As per Pranav Ahuja, co-founder and CEO of digital ad agency Xeno, LinkedIn typically allows you to choose from four different kinds of ad formats: sponsored content, sponsored messaging, lead generation forms, and text and dynamic ads.

The initial 2-4 weeks of advertising on LinkedIn are typically considered a learning experience for brands and media buyers to figure out what works (or doesn’t). To begin with, LinkedIn recommends a daily budget of at least $100 or a monthly budget of $5,000.

To get the most bang for your bucks, make sure you end your LinkedIn ad with a clear call to action (CTA).
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