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Demographics & Analytics Episode
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Show Transcript
Are you having trouble spending your budgets on LinkedIn? It's a common problem. And we're talking about how to spend your daily budgets without getting gouged 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! One of the challenges that we regularly face with LinkedIn Ads is difficulty actually spending our defined budget, it's actually really easy to spend your full budget if you don't mind paying too much for your ad traffic. But we're operating on the assumption that you're a sophisticated marketer that doesn't want to overpay. So on today's show, we're going to talk about all the aspects of spending your budget and how to do it efficiently. First, in the news, Shae on our team, she is winning every award right now for finding new stuff, she noticed that some of the accounts she's working on have a new UI change, where when you hover over a campaign group name, or a campaign name, the edit button appears right underneath. And this has been really confusing to advertisers for a long time. Because if you know, if you click on the actual campaign name or the campaign group name, it assumes you want to see the performance underneath that and the ads underneath it and not access the settings. So how many confused clicks have happened over the years where someone clicks on the campaign name, because they want to get to the settings just to realize that they are now in the wrong place. And they have to hit the back button. I bet that there have been collectively 10s of years wasted on that particular oddity in the user experience here. So the fact that we have a nice easy edit button, right, as soon as you hover over, you don't have to hit the three dots over to the right, I think is actually going to save a lot of time and a lot of headaches. Like I mentioned, this is only in some of our accounts so it's probably on a rollout. I would imagine that everyone listening will probably have it within two, three weeks.
Corey on our team also noticed something and honestly, he actually noticed this month's back, and I made a note and I just forgot to tell you guys, so here we go being transparent. It used to be that we could get ads approved that had up to three emojis in the ad. But now he realized that we're limited to two emojis, unless it's a video ad. We don't know how many more emojis that we can stick in a video ad. But we know that it's more than two. So Cory, thanks so much for pointing that out. I wanted to quickly highlight a review that's been left here on the show, Mony Chhim, who's a LinkedIn Ads specialist out of Toulouse, France. He left the review, "Best podcast for LinkedIn Ads. Great podcast. Thank you, AJ." Hey, Mony, I hope I'm pronouncing your name right. Thanks so much for taking me up on my invitation to leave the show review. I really appreciate it. You rock. All right, anyone who's a regular listener, I want to invite you please do leave us a review, I want to shout you out live as well. All right on to the subject at hand. Let's hit it.
First, I think we need to define what budget means because there are so many different definitions to be aware of the first meaning of budget is your actual budget. This is the money that you have set aside as a company to spend on LinkedIn Ads. So for instance, if your boss comes to you, or your VP of marketing or whatever, and says you have $15,000 a month to spend on LinkedIn Ads, that's your actual budget. Now that actual budget is going to be dispersed among several different campaigns most likely, then we have a campaigns daily budget. This is the daily budget that set on the campaign level. And this is mostly what we're going to be talking about today. LinkedIn allows itself to overspend your campaigns daily budget by I think 50%. So this isn't really a hard and fast rule. But we rely mostly on these campaign daily budgets, then there's also a lifetime campaign budget. Now this is where you can kind of just give money to a campaign and set it and forget it walk away. As soon as it's spent all of your lifetime budget, then it will pause the campaign. Now, I will admit we don't use lifetime budgets very often because I see it as being very much a lazy way to manage LinkedIn. And of course, we're not lazy and how we manage. But this is a tool that you actually have in your tool belt. Alright, so with spending full budget, like I mentioned in the intro, it's really easy to spend your entire daily budget on LinkedIn, but I guarantee you that you will pay too much in the process. What you do here is that you set all of your campaigns to the default bidding method, which is called maximum delivery. And whatever you have set as your daily budget, the system will bid as high as it needs to to spend that entire budget. So even if it has to bid $1,000 CPM, it'll do it. And if you're a regular listener, you know that max delivery bidding is the most expensive way to pay for your LinkedIn traffic 90% of the time. But if you're like me, and you don't want to pay LinkedIn more than you have to for ad traffic, you'll want to bid manually. Now, one of the results of bidding manually is that you'll set your daily budget and your bid, but if that bid isn't strong enough to get enough impressions to yield enough clicks to actually spend your budget, then you won't hit it. For more insight, specifically into bidding to get lowest costs on LinkedIn, go back and listen to and this is a recent episode, Episode 89. That's all about it, and it's updated when we go super deep. I'll also mention that spending your daily budget isn't something that you actually need to do. In fact, most of the time, I don't even count on spending my daily budgets. That's because it's actually better for performance, if we set daily budgets higher than we actually want them to be. But we set the bids just low enough until it naturally spends the actual budget. And then that way, if there's a sudden influx of interest or activity on the platform, it can naturally overspend a little bit, but I know other days, it'll understand. Alright, so let's say that you're not hitting your daily budgets, or you're just not spending as much as you want to be. Well, it's important to understand the levers that you have to pull and what actually determines how much you're going to spend. So the four levers that you have in spending your daily budget are number one, your audience size, number two, your click through rates, number three, your bid, and number four, your audience activity level. Here's a quick sponsor break, and then we'll dive into exactly how to find which of these levers needs to be pulled to fix your spending struggles.
6:44
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All right, let's jump into how do we figure out which of these elements is actually holding your LinkedIn ads account back. Our first lever here is audience size. Now we want to look at the audience size of the campaign, which you can do by hitting edit on the campaign settings, it'll show you there in the upper right hand corner. If you don't have anything to compare to, you may want to look at other campaigns that you've run in the past and how much they were capable of spending. We really like audience sizes to be between 20,000 to 80,000. But this is a general guide because we know that if you have an audience of 20,000, and your budget is $15,000 a month, there's just no way you're actually going to spend on that audience. Or if you do, you're going to spend way too much for the traffic you get. So you want to go and compare to another known similar audience size to see what it's capable of spending. And then you can ask yourself, is my budget appropriate for the audience size that we're going after? As soon as you start bidding more than you have to for that traffic, you'll be paying too much for the traffic, we'll get a little bit deeper into that too. But let's say you find that your audience size is too small for your budget. Naturally, you'll want to look for ways that you can expand your audience, you obviously don't want to go in and start adding people who aren't part of your target audience. That doesn't make sense. But you could go and identify new audience segments that are relevant to expand your reach.
The next lever we have is click through rate. So if you are bidding by the click and you're not spending your budget, you may just not have a high enough engagement rate. I'll give you an example. If you have a sponsored content ad that has an average click through rate, it'll probably be getting about .44% click through rate. And then if you go and launch an ad that actually has a .8% click through rate, you can pretty much double your budget with the same audience size. So we find out that how often your ads get clicked on and how interesting they are to your audience actually means more than just your audience size. If your ads aren't interesting enough to get the right clicks, you'll want to test new ad creative and angles and hooks and offers. You'll want to refresh your ad creative and copy. All of this until you actually find ads that perform better that get higher click through rates. And Eric, my head of marketing, he recommends testing only one thing at a time because when the change happens, you won't know what drove the performance up or down if you change multiple things at once, pull more than one lever at the same time. Something else you can do that can affect your click through rate is actually to adjust and change your targeting. If you're showing the right message, but you're showing it to the wrong audience, it's still going to be a failure. So go back and check Episode 54, where we talked all about ad demographics. You can go and check your demographics tab, look at the criteria of those that are getting served impressions, those that are clicking, and even those that are converting if you're using lead gen forms. And if you see any of those audience segments that don't make sense for your product, or service or whatever, you can start excluding them.
Okay, the next level we have is your bid. So let's just assume that your click through rate is staying constant. Maybe you have an ad that's already performing well, or multiple ads that all have about the same click through rate, assuming that your bid now is what determines how many impressions that you're going to qualify to receive. And if you remember our episode 72, all about relevancy score, you'll know that it's your bid, plus your relevancy score that determine how many auctions for the impressions you win. So if you're bidding too low, you won't get enough impressions, to get enough clicks to actually spend your budget. In this case, you may need to raise your bid. If I'm launching a campaign with no prior history, I'd probably start incrementally raising my bid, depending a little bit on how much I'm off. So let's say I'm underspending, my budget by hundreds of dollars, I'm probably going to increase my bid by increments of $1. So I might go up to $7 or $8 per click. But if I'm only off by $10, $20, I might increase my bid by 10 to 50 cents. That's just an approximate level that you can start but adjust based off of how your audience reacts. But here's a word of warning for you, Audiences that are on the smaller side, raising your bid may not actually get you more traffic. You could actually just be paying more for the same traffic. So here's the methodology that I would recommend it actually approaching this test. So let's say you have a small audience, and you actually have kind of high bids, what I would do is, after about a week, I would raise my bids by 20% and I want to take note of my impression count, my clicks count, and my cost per click during that week interval. Then after that next week is over, I want to go and compare the results from that 20% bid increase. If I noticed that my impressions and my clicks increased less than 20%, then I know that increasing my bids isn't actually the answer, the audience activity, the audience size, I'm already capturing the majority of them. So bidding higher just means I'm paying more. However, if I actually increase my impressions by over 20%, then I know that the audience size isn't the limitation here. And it's actually my bid that's causing me not to spend my whole budget. So that's a test you can do it, it actually doesn't matter what audience size you're working with. It's just the smaller your audience, the more likely it is that your audience size is the issue.
Okay, let's jump to the fourth one, which is your audience activity. If you have an audience of 20,000 people who never go on LinkedIn, of course, you're going to have a hard time spending your budgets. We know that some audience segments tend to be more active on the platform, and therefore create more ad inventory that gives you more opportunities for your ads to show and you'll get more impressions and more clicks. We pulled an example from two of our accounts. With one account, we're targeting dentists. And we've noticed that it's actually kind of hard to spend money on dentists and medical professionals like doctors. And I would imagine that this is an audience activity issue. So we grabbed some stats, and I want to compare them side by side. We have dentists versus marketers. The audiences were similar. The dentists were about 30,000 and the marketers were about 25,000. So it's not quite apples to apples as a comparison, but you'll see it's close enough that we can draw some conclusions here. On dentists, we spent $238 during that week, and on marketers, we spent $122. So we spent about half on marketers, but look at this reach that we got. With dentists we only reached 1300 of these people that's unique dentists who received an impression that week, but marketers we reached 1800. So 1300 versus 1800. And then we looked at the frequency. We could see see that marketers received an average frequency this week. And sorry, I'm saying week but I actually mean month this was done over the course of a month, the frequency of marketers was 2.74. But the frequency for dentists was only 1.69. So with marketers, we spent less to reach more and have a higher frequency. So all of that to say, we know that marketers tend to be more active on the platform than dentists. And that allows us to reach more of them at a lower cost and reach them more often. All right, I've got the episode resources for you coming right up so stick around.
15:42
Thank you for listening to the LinkedIn Ads Show. Hungry for more? AJ Wilcox, take it away.
All right, we have the episode all about LinkedIn's demographics and analytics. That's episode 54. You'll see all of these links down there in the show notes. There's also the episode on bidding that was not too long ago, it was episode 89. And then the episode on relevancy score. That was episode 72. Now, if you or anyone you know, is looking to learn more about LinkedIn Ads, go check out the course that I did on LinkedIn Learning. And you'll see a link down there in the show notes that takes you right there. It's by far the highest quality and the lowest cost course out there. If this is your first time listening, welcome, we're excited to have you here. Make sure to hit that subscribe button. But if this is not your first time, if you're a regular listener, please do rate and review the podcast. Most of the time, these reviews are done on Apple podcasts. So I'd encourage you to do it there. That is by far the best way that you can say thank you for us putting out this content week after week. With any questions, suggestions or corrections on what we've talked about. Reach out to us at Podcast@B2Linked.com. And with that being said, we'll see you back here next week. I'm cheering you on in your LinkedIn Ads initiatives.
