Disclaimer:

This article is the result of our team's efforts to analyze publicly available data, supplemented by insights gained from our past experiences. As a startup, we strive to contribute meaningful analysis to the public discourse, though we acknowledge that our interpretations may not be infallible. We recognize that there may be differing viewpoints and our findings might not align with all perspectives. Your feedback and constructive criticism are welcome as we navigate these complex topics together.

Introduction

As we venture deeper into 2024, the question "Do LinkedIn Ads work?" continues to surface among digital marketers and businesses aiming to enhance their B2B marketing strategies. This query, however, is more nuanced than it appears. The effectiveness of any advertising medium, including LinkedIn, is not solely about the capacity to generate leads and sales with increased investment. It's about overcoming the inevitable diminishing returns to achieve a sustained positive Return On Ad Spend (ROAS). The real challenge lies in whether LinkedIn advertising can maintain its effectiveness over time, yielding consistent, positive returns on investment.

In our exploration of various startups ranging from Seed to Series B funding stages, we've observed a wide spectrum of experiences with LinkedIn advertising. A common refrain among some founders is the difficulty in achieving positive ROAS, despite heavy investment in advertising. They often highlight the lack of "stickiness" in the traffic generated, noting that up to 90% of traffic dissipates once the ads are turned off. On the opposite end, there are those who report significant success, leveraging LinkedIn to not only attract but also retain high-quality leads. The pivotal difference between these divergent experiences seems to hinge on the effectiveness of branding and market positioning.

The importance of distinct branding cannot be overstated in the context of LinkedIn advertising success. The ability to establish oneself as the unequivocal leader in a specific niche significantly impacts the 'stickiness' of traffic and, by extension, the ROAS. Being anything but the top choice in your sector often results in a noticeable decline in the efficacy of LinkedIn ads, underscoring the critical role of being 'top of mind' among your target audience.

Despite the challenges, as of 2024, LinkedIn remains the premier platform for B2B sales, particularly with the advent and integration of account-based marketing (ABM) strategies. LinkedIn's advanced microtargeting capabilities enable businesses to craft and promote niche brands effectively, reaching highly specific audiences with precision.

Essential Highlights

Percentage of Companies Using LinkedIn Ads

• LinkedIn for B2B Marketing: A significant 97% of B2B marketers utilize LinkedIn for content marketing purposes. LinkedIn's effectiveness in generating B2B leads is notable, with 80% of B2B leads sourced from social media coming from LinkedIn.

• Revenue Generation and Lead Conversion: LinkedIn has proven effective for many businesses in generating revenue and converting leads. Around 38% of B2B marketers have acknowledged that LinkedIn contributes to their revenue generation, and the platform has a high visitor-to-lead conversion rate.

Average LinkedIn Ads Cost per Thousand (CPM)

• Global average CPM is around $22

• This differs from our internal data, as we often find it hitting even the $300 range.

Average LinkedIn Ads Cost per Click (CPC)

• Global average CPC on LinkedIn is around $5.58, but this can vary based on audience targeting, such as $6.40 for senior decision-makers and $4.40 for junior employees.

• This differs from our internal data, we find it slightly higher in the $15 range for U.S. metropolitan cities.

Average LinkedIn Ads Click Through Rate (CTR)

• CTR by Ad Format: Different ad formats on LinkedIn have varying CTRs:

  
  

  • Sponsored Content (Single Image): 0.56%

  • Sponsored Content (Carousel): 0.40%

  • Sponsored Content (Video): 0.44%

  • Message Ads: 3%

  • LinkedIn Document ad: 0.43%

  • LinkedIn Event Ad: 0.55%

  • For Text Ads: 0.81%, and Dynamic Ads: 0.53%.

  
  

• CTR by Seniority and Job Functions: CTRs differ based on the seniority of the target audience and their job functions. For example, the global CTR average for senior decision-makers is 0.55%, and for junior employees, it's 0.60%. CTR also varies across different job functions, such as Accounting (0.60%), Business Development (0.65%), and Information Technology (0.57%).

  
  

• Regional CTR Variations: CTRs also vary by region:

  
  

  • North America (NAMER): 0.5%

  • Asia-Pacific (APAC): 0.8%

  • Europe, Middle East, and Africa (EMEA): 0.6%

  • Latin America (LATAM): 0.7%.

  
  

• Industry-Specific CTRs: Industry-specific CTRs also show significant variations. For instance:

  • Software & Internet: 0.39%

  • Healthcare: 0.58%

  • Retail: 0.8%

  • Consumer Goods: 0.6%.

  
  

• Overall Average CTR: As a general benchmark, the average CTR across various campaign objectives on LinkedIn ranges from 0.32% to 4.40%.

  
  

• This aligns with our internal data findings.

  
  

LinkedIn Ads Targeting Best Practices

• Ideal Starting Budget: For startups building their campaigns from scratch, a recommended minimum budget is around $3,000 per month. This budget level is suggested to gather sufficient data, attract a good number of prospects, and start converting them into customers.

  
  

• Timeframe for ROI: It might take about three to four months with a budget of $3,000 per month to start seeing a break-even ROI. Profitability may emerge a few months after the initial investment, indicating the need for consistent budgeting over time for effective results.

  
  

• Use of Account-Based Marketing (ABM): For ABM, targeting specific companies (up to 300,000 companies via matched audiences) and industries can be effective. It's important to avoid hyper-targeting, which can limit ad delivery. Broadly targeting an entire company without adding too many filters can influence the entire organization effectively.