The auction model for LinkedIn Ads

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TSimilar to other social networks like Facebook or TikTok, LinkedIn's advertising is based on an auction principle. This means you effectively pay for every delivery or interaction with your ads. This is measured by the cost per thousand people reached (CPM).

If you 've read our blog articles on Facebook Ads costs or TikTok Ads costs , you already know how this works.

Everyone else can imagine it a bit like eBay. LinkedIn acts as an auctioneer, auctioning off its advertising space. We, the advertisers, are the bidders for an ad space. The space goes to the respective winner of the auction.

The key point: The advertiser who puts the most money on the table doesn't necessarily win. In addition to the advertising budget, the value of your ad is determined by other variables such as the time of day, the strength of competition, and the relevance of your ad. The latter is becoming increasingly important because it reflects the real user experience of your ad.

This means that your ad will perform better (or be rated as more valuable) the more accurately it matches the target audience. The same applies conversely: If the ad has a high budget but isn't relevant to the target audience, negative feedback will reduce the ad's overall value in the auction.

So it's not just about pouring as much money as possible into LinkedIn's advertising system, but also about professionally creating advertising materials. These can even compensate for a smaller advertising budget.  

As a specialized performance marketing agency, we create effective ads every day. Feel free to contact us!

Good to know: LinkedIn uses the second-price auction principle. If you win an auction against another bidder, you only have to pay 1 cent more than their bid. In other words, if you bid €3 and beat the second-highest bid of €2, you only have to pay €2.01.  

LinkedIn Ads Costs: Budget and Bidding Strategies
Now that you understand how LinkedIn advertisers allocate ad space, it's time to consider the different budget and bidding strategies. The combination of your budget and bidding strategy is perhaps the most important factor in achieving competitive ad pricing.

At LinkedIn, you can currently choose between a daily budget and a lifetime budget.

Daily budget: Here you specify an amount X to be invested in your ads throughout the day bahrain phone number data  With the daily budget, you have control over how much money is spent at what time (day). It's not necessary to set an end date for your campaign.
Lifetime budget: Here you specify an amount X to be spent over the entire campaign duration. The LinkedIn algorithm will then invest the budget dynamically. This means it will sometimes invest more and sometimes less, depending on when it deems it most appropriate/promising.

LinkedIn currently offers the following bidding strategies:
Maximum Delivery (Automatic Bidding): This strategy is particularly useful at the start of your campaign to get a feel for how much money is needed to prevail over other bidders (ad relevance is irrelevant). As the name suggests, LinkedIn automatically bids here, so that your daily budget is used up by the end of the day. Target Cost: If you want to invest a precise amount X (eg, EUR 32.47 for 1,000 impressions) for your target, select the "Target Cost" bidding strategy. LinkedIn will then try to maximize your bid based on the amount of your bid.