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CPC vs CPM Advertising on LinkedIn. Which is right for me?

When launching a LinkedIn advertising campaign, one of the crucial decisions you’ll face is choosing between Cost Per Click (CPC) and Cost Per Mille (CPM) bidding strategies. Both methods have their merits, but selecting the right one depends heavily on your specific campaign goals, budget constraints, and industry context. In this article, we’ll explore these two popular advertising models and provide a real-world example from our experience with a global ICT company to illustrate how to make this choice effectively.

Understanding CPC and CPM

CPC Advertising is where you pay for each click on your ads. This model is ideal if your goal is to drive specific actions, such as traffic to a landing page, generating leads, or completing sales. It ensures that you pay only when a user shows direct interest in your offering by engaging with your ad.

CPM Advertising, on the other hand, charges for every thousand impressions your ad receives. It’s best suited for goals related to increasing brand visibility, building awareness, or fostering brand loyalty. With CPM, you’re paying for exposure, regardless of whether that exposure leads to immediate action.

Choosing the Right Strategy

To determine which bidding strategy is right for your campaign, consider the following:

  • Campaign Objectives: If you’re looking to generate direct responses or actions, such as filling out a form or signing up for a webinar, CPC may be the best option. However, if your goal is to build brand recognition or advertise a product launch widely, CPM might be more appropriate.
  • Budget Considerations: CPC can often be more budget-friendly for smaller or more targeted campaigns because you only pay when someone clicks on your ad. CPM might be more cost-efficient for larger budgets aimed at maximum exposure.
  • Industry Influence: In highly competitive industries, CPC costs can escalate as more advertisers bid for the same audience. Alternatively, in broad markets, CPM can provide extensive exposure without the necessity for immediate engagement.

Real-World Example from Our Global ICT Client

Our agency recently managed a campaign for a global ICT company aiming to promote their new cloud storage solution. Given the competitive nature of the cloud storage market, we initially considered a CPC model to drive conversions. However, after analyzing the client’s objectives to build broad market awareness alongside generating leads, we opted for a mixed strategy.

We used CPM bidding to cast a wide net and increase visibility among a broad audience of IT professionals. This approach ensured that the campaign gained significant exposure. Simultaneously, we implemented targeted CPC ads focused on specific demographics within the audience, which were more likely to convert into leads. This dual strategy allowed us to balance cost-efficiency with targeted engagement, optimizing the campaign’s overall performance.

Conclusion

Deciding between CPC and CPM on LinkedIn doesn’t have to be a binary choice. As demonstrated with our global ICT client, a mixed approach can sometimes offer the best of both worlds, allowing for both broad awareness and targeted conversions. When planning your LinkedIn advertising strategy, carefully consider your primary objectives, budget limitations, and the competitive landscape of your industry to choose the most effective bidding strategy. With the right approach, you can maximize both your visibility and your return on investment.

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