Should Startups Invest in LinkedIn Ads? - Ep 80

Show Resources

Here were the resources we covered in the episode:

Low Budget Strategies Episode

Offers Episode

Who Should and Shouldn't Advertise on LinkedIn Episode

NEW LinkedIn Learning course about LinkedIn Ads by AJ Wilcox

Youtube Channel

Contact us at Podcast@B2Linked.com with ideas for what you'd like AJ to cover.

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Show Transcript

Should small businesses run LinkedIn Ads? We're digging into why or why not on this week's episode of the LinkedIn Ads Show.

Welcome to the LinkedIn Ads Show. Here's your host, AJ Wilcox.

Hey there, LinkedIn Ads fanatics! We all know that LinkedIn Ads are expensive. So should small businesses even invest in them? It's not a straightforward question. So let's discuss what the requirements are for success on LinkedIn Ads, as well as the limitations that are present for small businesses, especially compared to large ones. If you remember all the way back to Episode One, we talked quite a bit about who should and shouldn't invest in LinkedIn Ads. We mentioned how the targeting is exquisite. Because when you need the targeting that LinkedIn has, there just is no substitute out there. But boy, do we pay dearly for that targeting. The cost per click, and the cost per impression on LinkedIn ads are quite high compared to the other platforms. So because the costs are high, you need to make sure that your company has a large enough lifetime value when you close a deal so that you can still realize a return on your investment. So for instance, if you have a really low cost product, say it's a SAS software, that you charge, maybe $50 or $100 per month, just the fact that your lifetime value is lower, is probably not going to allow you to get a return on your investment unless you have incredible customer retention. So I tell people, if you have a lifetime value of $10,000, or $15,000, or even higher, it's pretty much a no brainer to run LinkedIn Ads. But also because those costs per click and per impression are high. That also means that you need a higher budget for advertising. Higher budgets mean that you can get more clicks and more leads. And more volume is usually good for growth. Higher budgets also mean that you can learn faster from your tests and your experiments. So assuming you have the budget and the lifetime value, there are three things that are requirements for advertising on a social platform. I call this acronym amo, A-M-O, and it stands for your audience, your message and your offer. The audience is who you're targeting. And this is why we pay a premium to LinkedIn is this access to a very specific audience, the M you for your message, this is what your customer sees. And this is a combination of the ad copy you choose and the visuals, either imagery or video. Even the ad format that you choose. That's all part of the message. And then the O this is by far the most important part. This is what are you offering your prospect in exchange for their attention? Offers can be anything from come read this blog post to buy something now or everything in between? And this is funny, I just realized that the requirements for running LinkedIn Ads, spells blammo budget, lifetime value, audience message and offer. All right, so if you need help remembering this blammo, it's like one of those old 60s Batman blurbs that pops up when someone gets hit in the face - blammo! So when I get the question about whether small businesses should be advertising on LinkedIn, I think the inherent question inside of that is really should small budgets be spending on LinkedIn? I think there's this misconception that a small business automatically has a small budget, which is certainly not the case. We've worked with many clients who are very small companies with very large budgets. But I will admit, oftentimes these go together, we actually have a whole episode, it was back to Episode 14, all about how to advertise on really insanely small budgets. So go listen to that one if you haven't already. But what you should realize on LinkedIn is that with a smaller budget, you're either gonna have to sacrifice volume of your campaign by having a small budget, or you might sacrifice being able to segment your audiences or reach as many people from the audience that you want. So this could make you lose out on some audience insights, but it's definitely still doable. You'll also sacrifice speed, speed to learning. So if you're running an experiment to find out, is my audience going to care about this new topic or this new offer? The more budget you have, the faster you're going to learn. Another misconception is that small businesses automatically have small lifetime values. What I want you to understand is the size of the company doesn't dictate the stuff that really matters. A small company could have good budget, good offers and a high lifetime value. So as you're asking yourself this question, be specific about what elements of a small business make you worried about running LinkedIn Ads? Okay, here's a quick sponsor break, and then we'll dive into the specific challenges as well as the recommendations for small businesses advertising on LinkedIn.

The LinkedIn Ads Show is proudly brought to by B2Linked.com, the LinkedIn Ads experts

5:07
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Alright, let's jump into some small business challenges. Obviously, if your business is small, it means you're going to be limited on headcount. And also some other things as well. Oftentimes, when a company is small, they don't have as many people working on projects, there could be a lack of understanding of strategy or vision for pushing the LinkedIn marketing forward. So you definitely want to give some thought into what are the growth strategies that you could use on LinkedIn Ads to grow quickly? What are the types of things that you want to be promoting in your ads? Do you have existing content like a newsletter or a podcast? What really matters is that you're solving a pain point for that audience member. The format of your offer doesn't matter nearly as much as the promise of what this offer is going to solve for someone. If you're looking for followers for your page, what is the reason to want to follow you? What are you providing them with? Is there going to be daily or weekly content? Are you meeting their pain points or their needs. We have Episode 10, all about offers so if you want to go super deep into that, go back and listen to that. But it doesn't matter what you're promoting, even if you're going right for the kill, and you're promoting your products or services directly to cold audiences, which doesn't oftentimes work. But it can. Make sure you understand the audience well enough so that you can call out their solution to their pain points. Another challenge for small businesses is small budgets. Sometimes the solution for having small budgets is just setting the expectation with your higher ups that you need a certain amount of budget to move forward. If you're running ads in North America, I found that $5,000 a month is a really good starting spot. If you're spending much less than that, it can be hard to be driving enough value out of it or enough volume to even care about or notice whether or not it's working. So if you're in a small company or a startup, you may have some inexperienced leadership and their expectations of what marketing should be may have to be either set or reset. For instance, you might have to let them know, if they're expecting to just start running ads today, and then get a return tomorrow, and then reinvest those funds, you may have to reset their expectations that it doesn't really work like that, we have a certain amount of time that we have to show ads. And then once we've captured them, then we have our own sales cycle that can take 6, 8, 12, 20 months. So don't be afraid to go help your higher ups understand and set those expectations with them of what they can expect from their LinkedIn marketing program. If you are stuck with a really small budget, we found that front loading that budget can be a good thing to do. So for instance, I mentioned that we like to start people around $5,000 a month in ad spend. Well, if you only have let's say $2,000 a month to spend on ads, you may be able to ask the company upfront for hey, let's take two and a half months worth of budget. And we're going to spend that all front loaded in a single month. This is going to help us learn very quickly, so that we can then decide what to do with our future advertising dollars. I mentioned that small companies can have small headcount. So if you do represent a small company, chances are you're wearing a lot of hats. You might be responsible for running the LinkedIn Ads, and the Google Ads, oh, and the email platform and managing and cleaning up Google Tag Manager. So sometimes when you don't have very many people to do things, you need outside help. You're not going to hire someone full time just because you want to run an email campaign. But you can hire a freelancer or a contractor or an agency for the stuff and the expertise that you don't have the headcount or time to dedicate to it. Sometimes small businesses are constrained for resources. You really wish you could create more content offers, more ebooks, more guides, more webinars, all of that. But you can't move forward because you don't have an in house designer. Well, there are some great services out there that you can outsource design to. There are great agencies who will write content offers up for you Oh, there's at least one great agency who will run your LinkedIn Ads, shameless plug. So don't be afraid to look outside of your own constrained resources for contractors and freelancers and agencies who can help plug those gaps that you might have. Going back to setting expectations with your higher ups. One tool that we found to be successful is, you could share the first episode of this podcast with them, because that's all about who should and shouldn't advertise on LinkedIn Ads, and what to expect from it. So if you sent them this podcast, I may be able to help explain to them and get them on your side. And I would be remiss if I didn't mention that sometimes small businesses or startups, they may not be certain about their product market fit. And if you don't have a good business to begin with, running ads, isn't really going to be your answer. My friend Dennis Yu mentions sometimes that ads are like adding fuel that amplifies an existing fire. So if your company is the equivalent of a tiny little flame, or no flame at all, when you dump adds fuel on top of it, you may smother that flame, or it may just not grow very big. To put it another way, advertising is kind of like amplifying. And so if you have a great business and you amplify it, more people find out about that great business. But if you don't have a great business, you're just going to be amplifying something that others aren't interested in. And there's not a lot you can really do if your company doesn't have product market fit. You can of course make recommendations to the higher ups. You can actually use LinkedIn Ads to test for product market fit. Years and years ago, I remember reading the Tim Ferriss boo, Four Hour Workweek. And he talks about how he actually put his book titles in Google Ads and based off of the click through rate or the volume of the clicks that came through, that was how he decided what to name his books. You can do the same thing with LinkedIn Ads. You can put some ads up to a specific audience testing a certain kind of offer that maybe it's something light, maybe it's just a blog post, but you're looking to see, does this audience actually care about this? And it can be actually pretty cheap market research, and it can be very fast as well. All right. I hope that was really helpful for you and understanding what small businesses can do on LinkedIn Ads. Now I've got the episode resources for you coming right up. So stick around.

Thank you for listening to the LinkedIn Ads Show. Hungry for more? AJ Wilcox, take it away.

12:44
All right, like we mentioned in the episode, if you're interested in listening to the episode all about low budget strategies, that's Episode 14. And you'll see the link for that down in the show notes. We also mentioned the episode all about offers what you can actually use to get people's attention on LinkedIn. And that's Episode 10. And we also mentioned Episode One all about who should and shouldn't advertise on LinkedIn, and what expectations you should have about the platform. Now, if you or anyone you know, is looking to learn more about LinkedIn Ads, send them the link there in the show notes below for the course all about LinkedIn Ads that I did with LinkedIn Learning. It's by far the least expensive and the highest quality course out there. If this is your first time listening, welcome. I'm excited to have you here. Definitely hit that subscribe button. I'd love to have you back around next episode. But if this is not your first rodeo, I would encourage you to please rate and review us in whatever podcast player you're listening in right now. It's not just something I say, it really helps us get the word out. It's a terrific zero cost way that you can support us. With any questions, suggestions, corrections, anything you want to send us, send us at Podcast@B2LInked.com. And with that being said, we'll see you back here next week. We're cheering you on in your LinkedIn Ads initiatives.