Any discussion of B2B marketing inevitably leads to talking about LinkedIn. Every mentoring session I’ve conducted has yielded this question. Especially when start-ups are looking to scale and are thinking about advertising, LinkedIn seems like a logical place to start. So, should you advertise on LinkedIn, and how can you generate a return on investment?
Generally, businesses should advertise on LinkedIn if they are marketing to B2B buyers in mid-large organisations with an average order value of at least £5,000. The average cost of generating a lead on LinkedIn is high compared to other digital channels. However, the quality of the leads is typically much higher than on any other platform as well. So, provided your average order value is higher than the cost to acquire customers, it is a valuable platform.
With that in mind, advertising on LinkedIn is expensive to get wrong. So let’s dive into helping you get it right.
The case for advertising on LinkedIn.
According to LinkedIn, the platform hosts 850 million members in more than 200 countries and territories worldwide. However, unlike other social media platforms, LinkedIn is a Business platform. It started as a recruitment platform and remains a place for business professionals to educate themselves, promote their accomplishments and find jobs.
While the official total numbers are nice, they don’t paint a full picture. We all probably still have active MySpace accounts, but advertising o there is meaningless if no one ever logs in.
So, I’ve taken the rest of my information from experience using the platform and data from Similar Web. Similar Web analyses web traffic and provides insight on the usage of LinkedIn users rather than vanity metrics.
While job seeking remains the prominent use of LinkedIn, LinkedIn visitors are increasingly spending more time on the platform. On average, LinkedIn generates 1.7 billion active sessions per month. And during those sessions, LinkedIn users spend an average of 7 minutes and 21 seconds each visit. For reference, the average Facebook visit lasts 10 minutes, and on Pinterest is 5 minutes 30.
And the platform is changing to encourage longer use times. The LinkedIn algorithm now promotes creator-based organic content and even videos. In 2022, they even added a ‘funny’ reaction.
This points to LinkedIn trying to retain users for longer and shifting the use case from job hunting to education and entertainment.
In addition, more than 50% of users are between 25-44. When we consider targeting decision-makers in a position to buy our solutions, this age bracket is about right.
Finally, many newly hired executives will look to make purchase decisions within the first 3-6 months. Therefore, given that LinkedIn’s primary use remains as a job-seeking and recruitment platform, it could be the ideal platform for your marketing efforts.
However, there are some caveats. The platform is heavily skewed towards the American market, with roughly 32% of traffic coming from the USA. That dwarves India in second, contributing 7.3% and the UK contributing slightly over 5% (though I’d argue that 5% of 1.7 billion is still ok).
So, there is a significant opportunity on LinkedIn. Let’s explore how you can capture it.
Identify your target audience.
While all of these people are on the platform, not all of them will want to buy your product. And LinkedIn’s targeting is one of the most powerful tools for marketers. LinkedIn lets you target users by specific job titles, company size, and even if they posted recently. So, who are you targeting on LinkedIn?
While I’m not going to go into the technical part of LinkedIn’s marketing platform in this article, it is important for any marketing campaign that you have a clear buyer and campaign objectives in mind before starting.
If you haven’t identified your target audience, I recommend you read my blog on defining your B2B Marketing Strategy. That article takes you through targeting the right buyers to buy from you, creating a strategy to get you there, and even identifying which tactics to execute.
To make the case for advertising on LinkedIn, we can borrow a sales qualification method, BANT. BANT stands for Budget, Authority, Needs and Timing. Sales teams use BANT to evaluate if a prospect is ready to buy. If the prospect has the budget for your solution, the authority to make a buying decision, the need for your solution, and they need it within an appropriate time, then they are a qualified prospect.
The methodology isn’t perfect, but it’s a starting point.
If we focus on the Budget and Authority part, reaching B2B buyers that meet these criteria is incredibly difficult. LinkedIn is perhaps the only digital advertising platform that provides B2B marketers with the opportunity to get in front of buyers with the correct budget and authority to buy their solutions. Trade shows, in-person networking, and targeted telemarketing are perhaps the only alternative options, but each of these has its downsides.
That said, the challenge with all of these channels is that they may not have the Need, and it may not be the right Time.
To adjust for this, we can do 2 things:
- Recognise the need to operate a Funnel.
- Recognise that LinkedIn is best for Top of Funnel advertising.
Not just a one-hit and done. Build out a funnel.
While marketing funnels can be quite complex, considering the BANT framework forces us to think about which stage each advertising channel fits into.
For example, let’s consider Search Engine Marketing as the antithesis of LinkedIn advertising. If someone is entering a search query for “Best ERP systems” into Google, there is a high chance they are interested in buying one. This would suggest they have a Need and that the Timing is about right (2 things we don’t get from LinkedIn). However, we have no control over whether this person has the budget for our solution or the authority to make a buying decision.
The below table maps out some of the channels aligned to our BANT framework to illustrate the point further.
|BANT vs Channel
|Budget & Authority
|Needs & Timing
With this in mind, we must also consider the different types of advertising required at each stage. People will think differently throughout the buying process, so we will need different creative at each stage.
This all goes towards building out a funnel.
You could build your whole funnel on LinkedIn itself. I have had success using LinkedIn to raise awareness with ideal clients and then remarket to them. Eventually, you build an audience and then they enquire with you when they have the need at the right time.
There are a variety of LinkedIn ad formats that will allow you to do that.
However, it may be more cost-effective to utilise LinkedIn advertising to build awareness and create demand with your target audience and another channel like Search Engine Marketing to capture demand from people when they search for you.
I teach clients how to figure this out themselves and walk through the framework I used to build a customer journey in my B2B Marketing Strategy article. But if you need any help with that, then please drop me a message.
Focus on your creative.
In advertising, your creative execution contributes just under 50% to the effectiveness of your campaigns. You can learn more about that in my analysis of the Champions League final vs Super Bowl advertising.
Considering the above funnel method above, your advertising creative will also need to be different at each stage. If you did want to create your whole funnel on LinkedIn, the below table lays out the different ad formats and creative types you could use.
|Type of Ad
|Top of Funnel
|Middle of Funnel
|Bottom of Funnel
Top of Funnel.
At the top of the funnel, you need to speak to prospects about what they are currently doing. What challenges are they having in their day-to-day job. For example, there is no point in talking about the great features of your CRM system, if they haven’t realised that a CRM system will help them with their sales team missing quota.
A more effective approach would be to provide your ideal customer with an educational piece of content around how to have a higher win percentage or how to help the sales team hit their quota. Your educational content would provide a systemised approach to helping sales teams hit quota, additional pieces of sales leadership advice, and mention that all sales activity is consolidated and trackable within a CRM system.
This would help solve their current problem and position a CRM system as part of the solution.
Educational pieces like this are incredibly effective on LinkedIn. You could also host a webinar or live event that you invite people to. However, it’s important to remember that not everyone who downloads your ebook will be a “lead”. They are very early in the buying process.
This is why the funnel is so important.
One additional point is that there are arguments over whether you should gate your content or not. As a start-up or scale-up, I advise you to gate your content with minimal fields. LinkedIn auto-generates many common fields, and asking for a work email won’t be enough to put people off. You can always visit their profile to fill in any blanks.
Middle of Funnel.
Once a prospect has engaged with your top-of-funnel advert and read your content, you can then remarket to those prospects with a different set of ads.
While your top-of-funnel content should focus on adding value, your mid-funnel content should focus on the challenges you solve for your customers and demonstrate why they should choose your solution.
Consider when prospects first enquire with you; what are the problems they face? It’s a great exercise to map these out. If you have to, go into your CRM system and track it back to the first interaction. But that first conversation about the challenges they face that made them enquire with you is some of the best insights you’ll get from your customers.
If you start with the product and think about the problems it solves, the message won’t resonate with your customers.
The next step is to articulate your message creatively in a way that isn’t too obvious. You need to encode the message your want to share, without simply stating it.
Ensure you have a strong hook and great copy that compliments your image.
Here is one of many pages that share examples of great LinkedIn ads.
Then the best thing to do is to test 2-3 ad creatives weekly. You’ll quickly learn which creative drives engagement and leads and which doesn’t.
Some prospects might enquire with you after reviewing your mid-funnel content.
If not, your bottom-of-funnel advertising can be a more direct approach using LinkedIn’s conversation ads.
Once again, you can target prospects that have engaged with your middle-of-funnel adverts.
So, by now, you know that the prospect has downloaded your ebook, liked or commented about your product, and maybe visited your website.
If you got your targeting right initially, then the budget responsibility and decision-making authority of your prospects will be right. And if they’re still engaged and showing intent signals, then they display that they might have the need. So it is most likely a question of timing.
And they may even have questions.
Building a conversation advert between your prospect and a team member allows you to approach them directly in their InMail. This isn’t cold outreach because they have engaged with your content.
So you could ask if they are looking at an upcoming project for a solution like yours.
Alternatively, you could be bold and reach out with a compelling, limited-time offer. This needs to be a promise that your product or service will deliver. It could be a lower-cost mini-product that is easier to say yes to. It could be some free consultancy.
If you reach out directly with this approach, you will likely get a “yes”, a “no”, or a “not right now.” Even with negative engagement, you have a direct engagement with your prospect. So, you can move them into lower-cost channels. You could connect with them on LinkedIn or sign them up for your newsletter and nurture the relationship via organic content.
How much budget do you need to advertise on LinkedIn?
The common question is that LinkedIn is expensive. And you’re right; LinkedIn is expensive. But how much budget should you allocate to LinkedIn adverts to be effective?
Generally, a B2B SaaS Scale-up should allocate £3,000 per month to LinkedIn advertising and a minimum of £1,000 per month. This budget allows you to create an advertising funnel that nurtures your LinkedIn prospects and generates 10-15 high-quality monthly leads with an average cost-per-lead of £200-£300. You should aim for a cost-per-lead of no more than £500.
I will explain more about creating a marketing budget in another post. In short, you are purchasing leads for your business by investing in marketing. Every channel you use will have a cost (even the ones that feel free). Therefore, it is about establishing if you will generate a return on your investment.
Since readers will be offering SaaS solutions to big organisations, your average order value should be at least £5,000 per year. If it is, then £200 per lead is often competitive with channels like exhibiting at Tradeshows, sponsoring networking events or creating a podcast. If not, then you should consider alternative channels.
Ultimately, if your ideal customer is on LinkedIn, your average order value is over £5000, and you set up your LinkedIn advertising with the right messaging, creative, ad formats and targeting, then LinkedIn will be a really powerful channel in your marketing mix.
If you are doing other forms of marketing, you could try it as a channel by reallocating the budget from another channel to LinkedIn. Think of it as trialling LinkedIn for 3 months instead of doing 1 -2 trade shows.
Should you manage LinkedIn ads in-house or outsource?
Once you have answered if advertising on LinkedIn is right for you, you can focus more on how you will execute your campaigns. Much like you need specific expertise to build a tradeshow booth, you will need specific expertise to manage your LinkedIn ad campaigns.
Whether you manage your LinkedIn campaigns in-house or work with an agency, recognise that it is a specific skill that needs to be learnt, trained and honed over time.
Managing campaigns in-house may feel more cost-effective, you will need to invest in training to learn how to set them up effectively and run better creative. And most importantly, recognise that you are unlikely to achieve good cost-per-lead rates if you have no experience.
It’s like driving a car. Learning your driving theory in a book and doing your hazard perception test is very different from taking it on the road for the first time. Even after passing your driving test, becoming a confident and capable driver takes months.
It’s the same with LinkedIn ads. You can learn all the theories, but implementing them is completely different. You will need practice. And if you’re spending £3000 per month, can you afford to spend it on practice?
I have run LinkedIn ads to varying degrees of success, but I always advocate hiring a specialist LinkedIn advertising agency. They may charge £500-£1000 per month to manage it for you, but it’s worth it if they can save you wasting £3000 on testing and learning. And if they can’t get it right, then it’s probably not the right channel for you. But at least you will have a definite answer, rather than spending a year testing different messages and wasting more budget.
If you’re considering advertising on LinkedIn and want specific advice about whether it’s right for your business, please drop me a message.
Or, to learn more about setting your B2B SaaS marketing strategy and plans, then explore other articles on my site.
- Creating a Marketing Strategy for B2B SaaS Start-ups
- How to start Content Marketing your Startup
- Ideas for early-stage content for start-ups.
Additional LinkedIn Advertising Resources.
For further information about how to run LinkedIn advertising effectively, I’ve linked some great reading, videos and podcasts below.
- The Ultimate Guide to LinkedIn Ads [Video]: https://www.youtube.com/watch?v=-ScqUNHeESo
- LinkedIn Ads Show [Podcast]: https://open.spotify.com/show/6Z88iXkXHKEZ5um04mtpAq?si=4NN01bYfT-yrrQ_dX4IvYQ&nd=1&_authfailed=1