Before Running LinkedIn Ads, Do You Know These 5 Ridiculously Expensive Mistakes Every Beginner Makes?

Linkedin ads can be a huge driver of growth for your B2B business. The unfortunate fact is most advertisers who start out doing Linkedin ads make a lot of mistakes which with an expensive platform like LinkedIn, can be very costly. In this article i will go over some of the most common mistakes i have seen when i audit an account.

Article by Philip Ilic,
B2B Growth Specialist.

The internet is full of misconceptions when it comes to running LinkedIn ads.

You’ve probably heard this one: they’re too expensive.

Yes, LinkedIn ads are expensive.

It may cost anywhere between £1,000 to £3,000 to acquire a customer. In dollars, that’s around $1,350 to $4,000.

But if your customer’s LTV is over £10,000, and LinkedIn is the only place to reach them,The internet is full of misconceptions when it comes to running LinkedIn ads. You’ve probably heard this one: they’re too expensive. Yes, LinkedIn ads are expensive. It may cost anywhere between £1,000 to £3,000 to acquire a customer. In dollars, that’s around $1,350 to $4,000. But if your customer’s LTV is over £10,000, and LinkedIn is the only place to reach them, then it wouldn’t make sense not to run LinkedIn ads. However, some businesses still waste astronomically eye-watering sums of money because they’ve made one or more of the 5 expensive mistakes I’m about to show you. And by the end of this guide, not only will you know the 5 expensive mistakes beginners make with LinkedIn ads, but you’ll also have links to free resources that’ll teach you how to set up & run a profitable LinkedIn ads campaign. then it wouldn’t make sense not to run LinkedIn ads.

However, some businesses still waste astronomically eye-watering sums of money because they’ve made one or more of the 5 expensive mistakes I’m about to show you.

And by the end of this guide, not only will you know the 5 expensive mistakes beginners make with LinkedIn ads, but you’ll also have links to free resources that’ll teach you how to set up & run a profitable LinkedIn ads campaign.

Mistake no.1 – NOT KNOWING THE NUMBERS

There are some very important numbers that need to be calculated before and during the campaign.

One of them is the customer lifetime value (LTV), the other is customer acquisition cost (CAC) (how much it costs to acquire a customer). We’re also going to cover cost per click (CPC) which a lot of people get scared of (and you’ll see why it’s nothing to worry about).

If you’re dealing with investors, then having these numbers on hand can be crucial. Most investors won’t understand how the LinkedIn ads system works – so knowing how to answer their questions and be prepared with good figures can put them at ease.

You can provide them with a set of estimates before & during the campaign, and with that data, you can increase the likelihood of receiving funding.

We won’t know exact numbers unless we run the campaign – but we can make an educated guess.

Remember though, these numbers vary for every business, so it’s hard to give a one-size-fits-all solution, and the following estimates are based on campaigns I’ve run for clients in the past.

1. Cost Per Click (CPC)

You can expect to pay around £1.50 ($2.10) per click at the lower end. 

However, this can go right up to £10 ($14) per click if you’re targeting a precise group of high-ranking decision-makers, like CEOs of a particular region.

This can be a little scary if you’re coming from a platform like Facebook, where the CPC is 4-5x cheaper.

Many get worried about the high costs associated at the early stages, but we need to keep in mind the quality of the traffic.

As long as we’ve got a strong relevant offer and decent customer lifetime value, then the high CPC isn’t really something to worry about.

Note: an exceptionally high CPL might signal an issue with how the ad is written (it might be unclear), the creative might be weak, or the general offer itself might not be enticing enough or relevant to your target audience.

2. Cost Per Lead (CPL)

Now this is a funny one to calculate because it depends on what & where you’re sending the traffic to.

It also depends how you define a lead.

Some define a lead as a booked demo, or a scheduled phone call – that’s going to be quite expensive  (anywhere from £150 to £250 ($345) and above).

But that’s not how I personally define a lead.

For me, a lead is someone who’s downloaded a piece of gated content & is now part of our mailing list.

Things like booked demos, or scheduled phone calls can be calculated separately further down the line.

If a prospect is part of our mailing list, there’s a lot more we can do with the data because we’re in a position to build a relationship with them. They’ve shown interest in what we’re offering and our email follow-up sequence (which we’ll talk about in a moment) will ensure they’re warmed up before ask them to jump on the phone, or book a demo.

Remember, the cost per lead will then depend on how strong & relevant your gated content is (your lead magnet).

Let’s go through an example

The cost per click is £2, and we drive 1000 clicks to that page.

That means we’ve spent £2,000 for 1,000 clicks. If the conversion rate is 20% (which is what it should be if we’ve got a good relevant offer), that’s 200 leads & each lead will have cost £10 ($13.80).

That’s 100 quality leads we can nurture over the upcoming weeks.

Leads can cost anywhere from $12 to $25 and upwards.

Now they’re ready to go through our follow-up system, and we can calculate the effectiveness of our emails based on how many prospects jump on a phone call or book a demo with us.

Note: a good cost per click but exceptionally high cost per lead could signal there’s something wrong with the landing page, the gated content might not be relevant, or it’s not connecting with the audience.

  1. CUSTOMER LIFETIME VALUE (CLV)

As I said in the beginning, it may cost anywhere from £1,000 to £3,000 to acquire a customer on LinkedIn.

So it only makes sense to run ads if you’ve got a high CLV (£10k to £15K and above).

Here’s the traditional CLV formula: 

Gross margin x (retention rate / [1 + Rate of discount – Retention rate]

If you don’t have all the data to make that calculation, that’s still okay, use what you’d generate in the first sale or a conservative estimate based on how much your clients will pay in the first year of working with you.

Mistake no. 2 DOING TOO MUCH TOO SOON

While some businesses do too little, some do too much too soon.

For example, you might know how valuable follow-up systems are and you might want the best data insights (like knowing how many times a particular call-to-action button has been clicked on in your follow-up emails).

But there’s no point doing too much too soon. There are way too many software to master & decide on, so it’s best to focus your energy on what matters at the beginning.

The beauty of LinkedIn ads is that you can increase the budget if you learn that your offer is doing well. You don’t need to spend a huge amount straight away.

So for example, if we’re only spending £3,000 to see how our initial offer performs, it might not make sense to set up or refine our follow-up system.

We’re not going to be overwhelmed at the back-end with that much being spent on ads.

But if we increase the budget after seeing the numbers all add up, we can then reinvest the extra cash into hiring professionals to build, refine & maintain a great follow-up system

They’ll bring all their knowledge to the table, meaning you don’t need to spend hours researching what the best follow-up email or data visualisation software might work for you.

You can just use their recommendations.

So just to reiterate:

  • There’s no point setting up an entire funnel with a back-end tracking system if you don’t know whether your lead magnet is good or not.
  • Smart business owners reinvest the extra cash flow into refining their follow-up system & lead tracking after they’ve gained proof of concept.
  • Once you’ve established a decent offer, you’ll then have the money to hire an expert to set up & refine a good follow-up system, meaning you don’t have to worry about mastering complex software.

Mistake no. 3 NOT EXPLORING OTHER PLATFORMS FIRST

Because LinkedIn is probably one of the most expensive places to generate leads, it it makes sense to explore other platforms first.

Just because I run an agency which (mainly) specializes in LinkedIn ads, I’m not going to say LinkedIn ads is the best option for you, because it might not be.

There are other platforms to run ads on:

  • Facebook
  • Snapchat
  • Tik Tok
  • Twitter
  • YouTube

And LinkedIn should be the last option, simply because it’s the most expensive.

If a customer costs £80 to acquire on Facebook, but £250 to acquire on LinkedIn – it makes zero sense to use LinkedIn.

When does it make sense to use LinkedIn then?

Well, it only makes sense if you’ve got a target audience that cannot accurately be targeted on other platforms.  

This means, if you want to target individuals by job type (or more specifically, IT Managers in FT5000 companies) then LinkedIn is a great place.

It’ll be very hard to identify that specific audience on Facebook or Twitter.

On the other hand, if your demographic is just ’19-year-old females’, then obviously somewhere like Tik Tok might be better.

Now if someone on your team is convinced you need to run Facebook ads to target high-level executives & managing directors, then this little exercise might get them to think twice.

  1. Go on Facebook.
  2. Join a supercar owners group
  3. Look at the profiles of those putting their supercars up for sale
  4. Notice how they barely have any details about what they do

On LinkedIn, users are expected to keep their profiles up to date – especially information like job role, positions head and at which company. Their career might depend on it.

Mistake no.4 NOT SPLIT TESTING THE OFFER

Many business owners only run one offer – they send people directly to the sales page hoping to book a demo or generate a sale on the spot.

This rarely works on its own.

It might work with something like Google ads, but it’s not the best strategy that performs well on LinkedIn.

With my clients, I run a split test between two offers.

Test A: send traffic directly to the sales page

Test B: send traffic to a lead magnet

We generate numbers on both sides and compare which option is best and where it’s better to ramp up the ad spend. That way, we avoid playing guessing games.

We need to find the most cost-effective way of taking customers off LinkedIn

That’s the main reason for these two split tests.

We’ve learnt how important this is because of updates like IOS 14 – retargeting costs are getting more expensive, so we need to take customers off the platform as quickly as possible and own the data ourselves.

Mistake no. 5 AN INAUTHENTIC FOLLOW UP SEQUENCE

Your customers are being targeted by other businesses on LinkedIn and they’ve (most likely) signed up to multiple follow-up sequences, so your emails won’t be the only ones hitting their inbox.

They’re going to be a part of many follow-up sequences which feel inauthentic.

An inauthentic follow-up sequence doesn’t feel personal. It looks like it’s been sent from a typical CRM system. The emails will be full of fancy fonts, images & colourful fancy branding.

When was the last time you replied to one of these generic emails? I don’t think I ever have.

The key here is to stand out and to do this we must go the opposite way.

The trick is to make our emails feel personal

Get this right and your conversion rates will shoot through the roof.

My favourite tool for doing this is Woodpecker.

The reason why this is different from a CRM system is that woodpecker is based on Gmail. This is what makes the emails feel authentic.

The next challenge is writing the emails. Something that kills authenticity is overthinking.

You Shouldn’t Overthink Your Emails

It should feel short, to the point and natural – as if you were reaching out to an acquaintance.

Here’s an example:

—-

Hey (name), thanks for downloading the Ultimate Guide to LinkedIn Advertising.

I had a good look at (Prospect Company Name) and from what I can see, I think LinkedIn ads could benefit you guys. 

Do you have 20 minutes to jump on a call and discuss this? Happy to go into specifics and talk about benchmarks, conversions and costs associated. 

Thanks,

—-

That’s it, short and sweet, incredibly simple.

Notice how we’re not trying to oversell here.

If you want more information on how I use this tool & the benefits of doing it this way, head over to this video here where I talk about how to write a follow-up email sequence

Useful Resources & Tutorials

I hope you found this ebook helpful. Down below, I’ve listed some links to tutorials that you might find useful if you’re looking to set up LinkedIn ads.

How To Run Successful LinkedIn Ads in 2021 – a step by step 38-minute tutorial where we cover all the fundamentals of running LinkedIn ads.

LinkedIn Campaign Manager Tutorial – a 9-minute video that’ll give you a deep overview & bring you up to speed on how LinkedIn Campaign Manager works.

Lead Generation Forms (step by step tutorial) – this 10-minute tutorial will show you how to use lead generation forms & get the cheapest cost per lead.

Which LinkedIn Ads Objectives – Explained (2021) – in this 13-minute video, I cover how to properly use the right LinkedIn ads objectives to your advantage.

Philip Ilic

Philip Ilic

B2B Growth Specialist

Phil helps B2B SaaS companies with growth marketing and is a deep specialist in Linkedin advertising and paid social more generally (Facebook, Twitter, LinkedIn). He runs a paid social agency called Superlumen.co and is the founder of B2Bhero.co.

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