Get the Lowest Costs from LinkedIn with these Advanced Bidding Strategies! - Ep 89

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New Interests for Interest Targeting

Explanation of CPC vs CPM bidding on LinkedIn

Relevancy Score and Auction Episode

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NEW LinkedIn Learning course about LinkedIn Ads by AJ Wilcox

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Show Transcript

You're paying way too much for your LinkedIn Ads. Today, we're going to fix that. We're talking about bidding 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! For those of you diehards who've been around long enough to have listened to Episode Six, it was all about bidding and budgeting, and it was our most listened to episode of the entire series. Well, things have changed with bidding a good bit since we recorded that episode back in early 2020. So I definitely think it's time to refresh ourselves on the topic. Not to mention, I'm a very different podcaster after 89 episodes. And so I'm excited to have one of the most important topics covered in an episode where I don't sound nearly as awkward Bidding is the number one reason that advertisers are paying too much for their ads on LinkedIn. And this is incredibly important to master because this is something that really affects your bottom line. The strategies and principles that I'm sharing with you today came after I'd spent over $30 million on the platform. So these learnings are well earned, and I'm excited to share them with you. We've now spent over 150 million on the platform. And we just continue to fine tune these. So make sure to listen to the very end of this episode. Because at the very end, I'm going to give you my framework for how to get the lowest costs from LinkedIn ads every time. In the news, you may remember back in episode 87, we mentioned that the new feature called website actions was seen out in the wild, and that it might be part of a beta. Well, I got confirmation from Mark Gustafson this week that it is indeed in beta. So if this is something that you're dying to get access to, then reach out to your rep. And Mark, thanks for that correction. There was a new post on the LinkedIn ads blog this week by Jae Oh, and Jay is definitely someone that I'd love to have on the podcast. So we'll see if I can get him on in a future episode. But he posted all about the new release of interests for LinkedIn targeting, we've linked to the whole article down below in the show notes. But he basically explained the interest targeting on LinkedIn in three different categories. He talked about general interests, service interests, and the newest product interest attributes. They launched over 20 new service interests, and over 120 new product interests. He said, you can now fine tune your campaign targeting with over 400 professional interest categories. For product interests, he mentioned that there are 18 categories to choose from. And the initial focus is software, which makes a lot of sense, because when they rolled out product pages, they were exclusively for SAS software,. Makes sense that that's where they would be getting the data from. And they go down to subcategories that zero in on specifics, like you mentioned, data visualization software, revenue management, software, sales, analytic software, etc. Under the new service interests, it's all about engaging with services pages, they launched with their initial set of about 20 categories that includes services such as real estate, environmental consulting, and app development. So if this is interesting to you, definitely go check out that article, I want to highlight one of the reviews, Patrick Alessi who's the Head of Customer Success at ProfitMetrics.io in Denmark. He left this review. He said, "AJ is clearly an expert in his field. Listening to this podcast has already given me a lot of tips and insights that I didn't have before". Patrick, thanks for that, I'm turning a little bit red. I'll move on here. If you're a lover and a listener of the show, and you haven't left a review for us yet, please go and do that, especially on Apple podcasts. I know I say it every episode. But it really helps with the algorithms of getting the show mentioned and shown to new people who haven't discovered it yet. The biggest compliment that you can pay us is by leaving a review and help other advertisers find the show. And of course, if I can figure out who you are, when you leave your review, sometimes you can't tell from the username, I'll give you a shout out. So I want to feature you. Alright, let's go ahead and get to the topic. Let's hit it.

First, we need to talk about the different bid types that are available the ways that you can bid. The default is called maximum delivery. And it used to be called auto bidding back years ago, and I actually liked the term auto bidding better than maximum delivery, but whatever, I was not consulted. The way that maximum delivery works is you pay by the impression and LinkedIn bids as high as it needs to in order to spend your daily budget. It's the default option for most campaigns. And it is the most expensive way to pay for your traffic about 90% of the time from the studies we've done. It's only available for sponsored content, which is your newsfeed ads. But if you're anything like us, the vast majority of our budget ends up going into sponsored content. So it'll feel like a lot.

Next, we have manual bidding. And with manual bidding, you can pay either by the click, or by the 1000 impressions. The concept of being able to pay by the click is what put Google Ads on the map. I absolutely love getting to tell people that when you're paying by the click, you don't pay a dime unless LinkedIn can get someone to actually take action. What LinkedIn does is it gets as much traffic as it can at your maximum bid until it hits your daily budget. Although many of us know it regularly overspends daily budgets, manual cost per click bidding results in the cheapest cost per click from LinkedIn about 90% of the time. So I get really comfortable with manual bidding. And I suggest you do the same. What's interesting about manual bidding is it's actually a hidden option. I joke about this, but in a campaign, you'll see under bidding, maximum delivery and cost cap bidding. And then there's an option that says more options. And when you click that, it reveals manual bidding. So this is effectively a hidden option, because it's an option that takes up one row that LinkedIn has hidden with a toggle that takes up one row. Obviously, this means that it was hidden intentionally. If you're listening to this podcast, I'm imagining that you are an advanced advertiser. And this is by far the best option for advanced advertisers that are looking to improve performance. It does take more work, but boy, it's worth it. When LinkedIn costs what it does to be able to get costs down 20, 30 50%. You'll also notice a little checkbox under manual bidding when you select it that says enable bid adjustment for high value clicks. And if you hover over the little question mark there, it says it allows LinkedIn to bid up to 45% higher to capture someone that LinkedIn thinks is most likely to convert. I would argue that this data is very limited on who is actually high value so I usually uncheck the box. In theory, this works the same way that target cost bidding used to work. But we'll talk about that here in just a moment. The option in between is called cost cap bidding. And LinkedIn says, "With automated cost cap bidding, you can set your maximum cost per key result. Oour bidding system will deliver as many results as possible at or below that price point." So of course, this sounds really cool, so we went and started doing a bunch of tests. And although they were limited, we tested cost cap against manual bidding, where we left the bid exactly the same. And in every case, we ended up with the same volume, but our costs were just higher. So I can't recommend cost cap bidding. But cost cap bidding replaced target cost bidding, and it went away a year or so ago. We never found success. In fact, the results that we had were very similar to what cost cap bidding is now. It appears to act very similarly. And I'm not sure why they took it away and replaced it. But in order to give it a different name, they must have changed something significantly on the back end. But we can't really tell the results are so similar to cost count bidding.

Now, right underneath your bid type. You'll also see something called optimization goals. Those of you who are really experienced with Facebook advertising, you might remember the old bidding method on Facebook called OCPM, or optimized CPM bidding. OCPM on Facebook was awesome. I absolutely loved it. And what it did is it allowed you to pay Facebook's really low CPMs. So you're bidding by CPM, but the auction system is optimizing to show ads to those who are most likely to click. So you've really got the best of both worlds pay on low CPMs. While the advanced system found those who are most likely to click, it resulted in really low costs per click is fantastic. When you change your optimization goal to landing page clicks while you're bidding with maximum delivery, this is effectively the same thing as Facebook's old ocpm. The difference here though, is that LinkedIn CPMs aren't cheap. And I don't think that LinkedIn data is nearly as good at Facebook's about who's most likely to click. You can also set your optimization goal to impressions, which means you're telling the system to optimize towards showing as many impressions as possible, which isn't really an optimization. It's more of just what the ad platform is meant to do. But based off of your objective, you may also see some additional optimization goals. Like if you're in a video views campaign, you can optimize for video views. If you're in the brand awareness objective, you'll notice that you can optimize towards reach meaning hitting as many different people as possible rather than showing the same message the same person over and over. If you're in lead generation, you can use the optimization goal of leads meaning bid on those who are most likely to actually fill out a lead form. With website conversions, you can optimize towards people who are most likely to convert and then under sponsor messaging ad formats, the only optimization goal you get is sends, which is basically like optimizing for impressions. The system's not having to think too hard. So your optimization goal and your bidding strategy can change based off of the objective and your ad format. And there's way too many permutations to cover here. But for example, under the brand awareness objective, if you want to run a dynamic ad, let's say a spotlight ad, you'll be limited to just impressions as your optimization goal. Whereas under any other objective, you'd be able to set clicks as your optimization goal. And many people don't know this, but you can run a video ad under a website visits objective. If you set video views as your objective, you're limited to only being able to bid by the video view or by the impression. But if you put a video underneath a website visits campaign, you can set an optimization goal of landing page clicks, which is a cool hack.

Okay, with that groundwork being laid, we can talk about how bidding actually works. If you haven't yet, go back and listen to episode 72 about relevancy score on LinkedIn, and how the auction works. We get really geeky into it. So when you start manually bidding, which again, I recommend about 90% of the time, it works on the basis of an auction. And LinkedIn calls it a second price auction, which is the same model that Google engineered back at the very beginning of Google Ads. And the logic goes like this, an impression comes up for auction. So let's say someone from your target audience just logged into LinkedIn, they navigate to their feed. And now LinkedIn hosts this very fast auction, that just takes a moment to let all the advertisers who want to show up in this user's feed to start to compete. Whoever wins this auction wins that impression. And then when someone eventually clicks on their ad, they end up paying one cent more per click than the loser the second place person would have paid. Whether you win the auction or not, it's a combination of your relevancy score, which is how well LinkedIn says that your campaigns are performing and your bid. If you have a high performing ad, meaning that it gets a high click through rate, it means you don't have to bid as high to get traffic. If your ads are low performing. It may feel like pulling teeth to get LinkedIn to try to show your ads or LinkedIn or show them but you get gouged by crazy high costs. So under this auction system, you show enough impressions that you start to get clicks and other interactions on your ads. And since you're bidding manually, you pay no more than what you bid. So you might be asking yourself, if that's the way the auction works for manual bidding, how does it work on maximum delivery or auto bidding? Maximum delivery is cost per 1000 impression bidding where again, LinkedIn gets to bid by the impression and bids as high as it needs to to spend your daily budget. This feels like a little bit of a conflict of interest to me, just imagine handing your wallet to LinkedIn and trusting them to only take as much out of your wallet as it really takes to advertise. It's not gonna happen. Since you're bidding by the impression and you're bidding high. LinkedIn doesn't even need to hold much of an auction for you. Because the whole auction environment, it's a way of maximizing profit among advertisers who are bidding only for performance. But when you're bidding by the impression, the auction doesn't care how your ads are performing, or performed in the past, because it gets paid handsomely guaranteed, just for showing your ad. So bidding this way, it's far easier to get traffic, you'll notice that it takes far less babysitting your campaigns to spend your budget. But because you're bidding so high on CPM, it leads to a much more expensive, effective cost per click 90% of the time. If you want to see how all the math works here, check out the YouTube video that I linked to below. It's all about CPC versus CPM bidding, and you can really see me nerd out. Now I've mentioned a couple times that maximum delivery is more expensive 90% of the time. But what about that 10% of the time that it's actually more efficient. We've found that that break even point starts when your click through rates get to two to three times the benchmark for that ad format. That of course means you need to know what your benchmarks are. So go check out episode 15, in case you missed that. And that click through rate of two to three times that's an average sometimes with more competitive audiences, we find that you have to be performing more like three times the benchmark. Alright, here's a quick sponsor break and then we'll get to dive into the advanced bidding tips.

14:44
The LinkedIn Ads Show is proudly brought to you by B2Linked.com. The LinkedIn Ads experts

If you're a B2B company and care about getting more sales opportunities from your ideal prospects, then chances are LinkedIn Ads are for you. But the platform isn't easy to use and can be painfully expensive on the front end, which is probably why you're listening to this episode. At B2Llinked, we've cracked the code to maximizing your ROI while minimizing the costs you pay on LinkedIn. Our methodology includes building and executing LinkedIn Ads strategies that are customized to your unique needs, and tailored to the way that B2B consumers buy today. Over the last 11 years, we've worked with some of the largest LinkedIn advertising budgets in the world, we've spent over $150 million on the platform, and we're official LinkedIn partners. If you want to generate more sales opportunities with your ideal prospects, book a discovery call at B2Linked.com/apply, we'd absolutely love the chance to get to work with you.

Let's jump into those advanced bidding tips. When you're bidding manually, I recommend usually bidding significantly lower than what LinkedIn recommends, I'll just remind you the average cost per click on LinkedIn is usually between about $8 to $14 per click in North America. So if LinkedIn is telling you that you need to be bidding $25, $40, $60 per click, you really don't have to trust that advice. It's bad advice. If you have a giant budget like Fortune 500 or if you have really small audiences, oftentimes you will have to bid significantly higher to spend those budgets. For instance, we know that we can't fill our budgets with bidding near the floor if someone's budget is more than like $10,000. So generally, I suggest bidding low and then if you're not getting enough traffic, then start to increase your bids. But many of you have asked me about starting by bidding high and then backing down. And I used to recommend this strategy, because by doing it, you can kind of pad your relevancy score. But I don't recommend it much anymore, just because of how much money was wasted during the first few days because of how much money was wasted during those first few days of bidding really high. I found that LinkedIn relevancy score will eventually shake out. If you have good ads, chances are, even if you're bidding low, the system will learn that you have good relevancy scores, even if you're bidding low. Sometimes if the ad platform gets it wrong, like if we're bidding low, and the platform gives us poor relevancy scores and so we see that the ads just aren't getting served, oftentimes, we'll pause those ads, and we'll relaunch exactly the same ads. We call this refreshing. So that's a tool in your tool belt. But if your ads are good, and your audience is tight, performance should be good and you shouldn't have to try to trick the relevancy score algorithm.

Alright, let's talk about budgeting. So when you're doing manual bidding, you'll see that there's a daily budget. And there's also actually a lifetime budget, but we'll get to that. But when you're doing manual bidding, your daily budget is effectively just a safety net, that shuts your account off and takes you out of the auction, so that you stop spending. And LinkedIn will allow itself to spend over 50% of your daily budgets, which I think is a little bit excessive, but hey, I'm not on the back end. When bidding manually, I like to set my daily budgets really high, just to get it out of the way because the last thing you want to happen is your daily budget kicks in, shuts your account off before you actually find what that campaign is capable of spending at your bid level. Then after a couple days, you can analyze where you're hitting spend wise, and you can either lower your bids, or raise your budget, or maybe even both. So that's under manual bidding. But how does daily budget work when you're using maximum delivery? Well, this way, it's very simple. You set a budget, and it hits it or likely exceeds. Unless your audiences happen to be pretty small, then it might not actually hit it. But on small audiences watch because those costs per click, you might be paying $50 per click, since maximum delivery gets to bid so high. Keep an eye on that.

So we mentioned lifetime budgets. If you've been listening for a while, you've likely guessed that I'm a fan of daily budgeting. I love that control that it gives us or the evergreen advertising approach that we recommend. When lifetime budgets first came out, it was back when a campaign would expire when it hit its lifetime budget. And when it expired, there was no bringing that campaign back from the dead. If that campaigns results ended up being great. You'd be recreating that bad boy from scratch. accounts would be littered with 10s or hundreds of unusable campaigns. They took up space and they weren't good for anything except for reporting. So to work around them, I used evergreen campaigns with daily budgets. And if for whatever reason I didn't want to keep running ads to a certain audience, I would end up pausing that campaign and I can resurrect it again in the future by simply unpausing it. And this does mean that you have to be consistently paying attention to the account. If you try to do the set it and forget it thing, you can end up overspending budgets. And this works out great for us because managing LinkedIn Ads is all we do so we don't mind having to have to look at an account every day. But I realized that there are those of you out there who manage multiple channels, and maybe don't have the bandwidth. And if that's you, then lifetime budgets can be okay. But here's how lifetime budgets work. For example, if you have a campaign that you want to give a lifetime budget of $1,000 to, the campaign then goes and tries to spend that $1,000 and then shuts off. This can happen over the course of one day, or it can happen over the course of two months. It's really just however long it takes based on your bids. Now you can set a daily budget as well. So let's say you set a daily budget of $50, and a lifetime budget of 1000. So it would try to spend the same $1,000, but it would pace it out over about 20 days. But of course it could take longer. I do like this level of control better if you want to use lifetime budgets, because blowing an entire campaigns budget for the month in one day is very difficult to explain to a boss or a client. So back to budgets when we're manually bidding, let's say that you have a $50 per day budget for a campaign. If you're bidding too high too aggressively, you could spend that entire budget by 5am, before the workday is even started. And on top of that, of course, LinkedIn reserves the right to overspend your daily budgets by 50%. So it could be even worse, you could spend today's and tomorrow's budget by 5am. If you're not bidding aggressively, if you're bidding more on the low end, that budget should last all day. Daily budgets with maximum delivery bidding are a little bit different. Because what you put in is your daily budget, LinkedIn is going to bid as high as it takes to actually spend that. Whereas with manual bidding, if you're only bidding, let's say $8 a click, and you have a budget of $50 for the day, if people just aren't clicking, LinkedIn is not going to do anything to try to get you to spend more towards that $50 mark. You might just spend $14 for the day and be done. And of course, there's a lot of back end logic that goes into this calculation, which is probably one of the biggest reasons that LinkedIn recommends not trying to time your campaign by pausing them and unpleasing them at different times of the day. You can imagine that if max delivery is trying to spend your budget by the end of 24 hours, if you pause your campaign until the beginning of the work day, and then pause at the end, you may only end up spending half of your daily budget, which would obviously be confusing for that algorithm. With manual bidding, though we don't have the same issue, which I actually really like. As a reminder, daily budgets work off of UTC timezone, which is in the UK. Now I'm here in the Western US, I'm in the Mountain Time Zone. And so when a campaign has hit its daily budget for the day, it turns back on fresh at 5pm. So you can spend the entire day's budget before the day actually begin. I really, really don't love that. In fact, I actually really hate it. All right, I've got the episode resources for you coming right up, along with my framework on how to get the lowest costs from LinkedIn Ads 100% of the time. That's coming up right after the resources, so stick around.

23:23
Thank you for listening to the LinkedIn Ads Show. Hungry for more? AJ Wilcox, take it away.

Alright, like we mentioned in the news section, the article from Jae Oh on the LinkedIn ads blog all about the new interest targeting, you'll see a link to that. You'll also see the YouTube video that I did on CPC versus CPM bidding. You'll get to see all of the complex math behind how that calculation works. Episode 72 was all about relevancy score and the auction. So you'll see a link to that. Make sure just in case you missed that episode, you go back for it. If you or anyone else is looking to learn more about LinkedIn Ads, maybe you're just getting started, check out the course that I did with LinkedIn Learning all about LinkedIn ads. It's by far the least expensive and the highest quality course out there. If this is your first episode you're listening to, welcome! We're so excited to have you here. Make sure you hit that subscribe button. But if this is not your first time you've listened, please do consider rating and reviewing the podcast. Like I mentioned earlier, it's by far the best way that you can say thank you for the hours and hours that it takes to put this podcast together. With any questions, suggestions or corrections reach out to us at Podcast@B2Linked.com.

So here's the framework I've been telling you about. Marketers really love frameworks so I'm giving you one of my favorite campaign launch frameworks. This works with any size of budget, any size of campaign, and it's designed to produce the very lowest costs on the platform period, 100% of the time. Get ready to take now notes. So you start out by bidding a campaign with manual CPC bidding. And I recommend significantly lower than the recommended bid range. In North America, maybe start around the $7 to $8 mark. And you set a budget that's significantly higher than what you actually want to spend. And don't worry, you likely won't actually be hitting it so don't be worried about it being sky high. I really like to set my budget so high during this initial testing phase, just to get it out of the way. You might be asking yourself, well AJ, how high? Here's my rule of thumb, I want it high enough that there's just hardly no way that it'll ever spend it, but not so high that if it did spend its budget, that I'd lose my job. So I launched my campaigns with that low manual bids with high budgets, and day one to one and a half will probably be the learning phase. So you don't want to touch your campaigns during that. The results from day two, though, should be pretty informative. On day two, you compare your actual spend for those campaigns with your desired budget. Now, notice, I didn't say your daily budget, I said your desired budget. And that's because I told you to set your daily budget higher than you actually want to spend. And that's because you don't want your daily budget to get in and shut your campaigns off mid day, you want to get a good feel for that audience's ability to actually spend based off of your bid level and your ad performance. For example, let's say that you set your daily budget at $200 per day, and you're actually wanting to spend about 50, at the end of day to look and see how that compares, did you weigh under spend the $50 mark, it means your bid likely isn't aggressive enough to reach enough of that target audience. Or it could be that your audience is just too small to spend that budget. I'd recommend increasing your bids by one to $3 per click, just depending on how severely you understand. What if you just kind of understand what it does mean that you'll need to bid higher to get into the auction enough to spend your budget. And here, you don't have to increase your bids quite so much. You could try increasing them by 10 cents to $1. What if you actually hit your desired budget for the day, it means that you're bidding at just the right level to spend your daily budget. And this is the holy grail. You just found out how to bid low enough to get the best pricing, but high enough to spend your whole budget and get scale. What if you actually spent higher than your desired budget though? Well, lucky you. Even at a low initial bid, you still overspend. And that means that you get to lower your bids even more and get even cheaper traffic while you're still spending your daily budget. Depending on how much you overspent by, you can lower your bids by again 10 cents to $1, or maybe a few dollars. There's no exact science here, you've got to make changes and see how the campaigns respond. Now as soon as you're comfortable spending your desired budget, then go ahead and lower your daily budget to match your desired budget. Or maybe lower it to a little bit under since LinkedIn can overspend your budget. And now your safety net is back in place. Oh, doesn't that feel good. Now you've let this campaign run for a few days, I like to look at a three day uninterrupted stretch. Now I want you to look at your click through rates. Do you have any that are consistently way above benchmark? With sponsored content campaigns, I look for click through rates that are over 1%. With text ads, I look for click through rates that are over .045%. If you get one of these, hurray, you can now switch to maximum delivery bidding. And this will actually start saving you money. And like we've discussed before, maximum delivery bidding is really convenient, it's a lot easier to use as an advertiser, then watch over time. Because if you have another three day stretch, where your click through rates are falling below that point at which your click costs became cheaper. Then you want to switch back to manual CPC bidding, and then rinse and repeat. The reason this happens is over time when you show your ads to the same people, they get less and less likely to click. And we call that saturation. You can go check that episode all about AD saturation. But this could happen over a week. It could happen over a month or two months. So you have to keep your eye on click through rates over time. And I reevaluate, I go through the same process. Every time I launch new ads or new offers since they're sure to change the click through rates, which then changes the relevancy score, which changes where your bids need to be in order to spend your ideal budget. If you launch new ads, and they get click through rates that are significantly higher, that's great. That means you're probably going to get to go and decrease your bids and get even cheaper traffic and still spend what you want to spend. Or maybe you launch new ads and they don't spend what you want them to, you can go and reevaluate by increasing your bids a little bit. Maybe you've been talking to your rep and your rep has been saying, no don't bid low because you'll end up getting bad quality leads. This is, from our experience, absolutely false. Without fail, every time we've tested lead quality associated with bid levels, we find no difference in lead quality. If you find that there's a difference though, go check your targeting, since you may inadvertently be letting people in who aren't part of your ideal customer profile, your ICP. So that's the framework. I hope you love it. Hope you took great notes. With that being said, I'll see you back here next week. I'm cheering you on in your LinkedIn Ads initiatives.