Setting a marketing budget before defining a marketing plan is like putting the cart before the horse. Although there are plenty of online resources that can help you get a general idea of how much your marketing budget should be, preparing a marketing road map should come first. Before creating a detailed marketing plan including budget allocation to the various channels, deadlines, owner and more, there are 5 things to consider:
I’ve previously written about how it’s wrong for B2B marketers to ignore LinkedIn. Often though, when they are trying to launch a LinkedIn ad campaign, marketers tend to use the same methods they do in platforms they are more familiar with, like AdWords and Facebook, and that’s a mistake.
This post, LinkedIn Ads Targeting: The Complete Guide, is part of my series of LinkedIn Ads guides I will post on Marketing Ramen, and it covers what may be the most essential part of your campaign: Targeting.
I noticed there isn’t a lot of content out there that covers how to do LinkedIn targeting right, so I think many of you will find this guide useful.
I’ll break it down into 2 steps:
- Strategic Planning
- Research and Audience Building: Targeting
For the sake of this post I'll assume that you are looking to generate demand and leads via gated content (content on your website that requires to leave details to download or is password protected). For example, you created one or more whitepapers and eBooks on your website, and would like to promote them on LinkedIn.
There are some questions you need to answer such as:
- Who am I targeting?
- With what content (text and creative)?
- What is my budget and how should I divide it?
Who am I targeting?
Bear in mind that when you’re building your audience, you shouldn’t just target your “ideal” customer in the organization. Often, your ideal customer will get her information about potential new tools and technologies from the people around her. This is why I generally advise against targeting only specific titles.
The best way to create your ads' target audience is to get a list of SQLs/opportunities from sales, and find these leads on LinkedIn. Note that you’ll want to have pinpoint campaigns for specific segments/personas, but make sure you have enough budget for each segment. I would suggest as a rule of thumb having at least $1,500 per campaign. If you only have $5,000, don’t try to target too many segments at once.
There are 3 types of content you can share with people you target:
- Gated Content
- Non-gated Content
- Direct Response
Gated Content will provide you with the most amount of leads per dollar, but from my experience, these will often be higher up the funnel, and be more difficult to convert.
I generally advise against using non-gated content. At around $8 per click (LinkedIn PPC is expensive...), you will get about 125 clicks per $1,000 spend, minus your bounce rate.
As for Direct Response where the potential lead is urged to respond immediately, such as sign up for a webinar or download a coupon, I’ve seen very interesting results with it, but it’s trickier, harder to apply, and you will usually see a lower conversion rate than with a gated-content campaign. On the other hand, leads from Direct Response will be much further down the funnel.
What is my budget and how should I divide it?
To know approximately how much a lead will cost (CPL) and set a budget, you’d want to know the following:
Take into consideration that although the CPC will be higher than most other channels (sometimes 2-3x), the Lead to SQL rate should be much higher than other channels (anywhere between X2 - X10).
As some people believe that PPC advertising is a "quick fix" and drives results immediately, please consider that:
- Your budget needs to be sufficient to generate enough leads that will convert to SQLs.
- You need to give this enough time to see the SQLs start to come through.
Any type of marketing campaign, including PPC, requires testing and optimizing, so patience is a virtue 🙂
Our friends at LinkedIn usually suggest around $5,000/month for this type of experiment, but I’ve seen it work with $3,000. Any budget lower than that can bring you random leads, but will be difficult to learn from in order to optimize and scale.
Once you begin researching different audiences in LinkedIn, you’ll have a better idea of what the CPC will be for your audience, but as I mentioned above, to actually see results, I recommend putting aside a budget of no less than $1,500/mo per campaign/segment. To learn anything at all you’ll want to run at least 2 campaigns, so I’d say no less than $3,000/mo.
Research and Audience Building: Targeting
This part is my favorite - and I think it’s seriously fun.
Each segment can be targeted differently, but there are several different ways to get to the same lead.
Let’s say that one of your segments is startups and small tech companies and you're looking to target Heads of Marketing in these companies.
You’ll usually want to build at least 2 (or more) campaigns to target each segment. One reason for this is that LinkedIn’s targeting is built in a way that when adding more targeting criteria, it excludes anyone who doesn’t match that criteria.
You also want to build decent sized audiences. Decent is no less than 70K, and ideally it should be around 200-700K.
While testing out audience groups, you can see:
- If your audience is even on LinkedIn.
- What the suggested CPC is for this segment.
- The different ways to target the audience.
So, for Heads of Marketing at Startups and Smaller Tech Companies:
You start out with a blank slate:
That’s everybody on LinkedIn.
The first thing you’ll see is the geolocation targeting.
For now, just select the countries or continents you’re looking to target.
Let’s say North America and Europe, but you can go in and target specific countries, states and cities.
The next thing we’ll pick is the company size. Since we’re trying to target Marketing Heads at Startups and Smaller Tech companies, let’s go with 1 - 50 people:
You’d now want to skip everything else, and go directly to Function, and only choose Marketing:
This is our baseline:
What do I mean by that? I mean that it’s near certain that our audience of Heads of Marketing in Startups are all here, in this group of 700,000 people. From this point, narrowing it down will almost certainly exclude some people you want to target. The reason is that the data we’re going by is self-reported. If I’m Growth Magician at a Startup, LinkedIn might not consider me a senior employee, even if I’m the de-facto CMO.
But let’s narrow it down a bit:
I’ve added seniority, and the audience is narrowed down significantly to 415,000. Interestingly, if I invert the target and exclude all but these seniorities, I get a much smaller audience.
You can now break it down into additional segments.
Industry = Tech gets you a nice audience of 86,000 people:
Adding skills = start-ups leaves you with 47,000 people to target:
You can also target by the cities where startups mostly are (based on this CityLab's report)
What you also want to take note of for each set up targeting criteria is the suggested CPC.
LinkedIn does not make it easy for us, so what you can do is launch a campaign (and then pause it immediately, so it doesn’t waste your budget), and then play with the different targeting options to see how the suggested bid is changed.
You may run into a few bumps in the road caused by LinkedIn's own segmentation. For example, if you're looking to target Account Managers at Digital Marketing Agencies, you’ll need to find a solution for the problem that A) LinkedIn doesn’t know what a Digital Agency is, and B) there are many different titles for Account Manager.
Each segment may have its own set of targeting challenges. The idea is to find different combinations, test them and see which one performs better.
This is just one example of how to build an audience for a specific segment in LinkedIn. Some audiences are tougher to reach, and may not even visit the platform often altogether.
After you have your audiences set, you’ll be able to see what your CPC is - and correctly plan the campaign and your budget:
Let’s say the average CPC you reached is $10.
Now consider two things:
- The conversion rates for downloading gated content are generally better than those for demo registrations.
- The further up the funnel your conversion is, the more expensive it will be to get to it.
Let’s assume a conversion rate of 5% for your “Get a Demo LP” and 10% for your “Gated Content LP”.
That’s $200 for a “demo” lead and $100 for a “gated content” lead.
What you will be able to optimize is the content itself, get a higher conversion rate and CPC. Lowering CPC in LinkedIn ads can be challenging, since unlike Google or Facebook, LinkedIn doesn’t reward you for a higher CTR. In fact, targeting a broader audience is usually the best way to lower your CPC, but that will of course result in lower CTR.