LinkedIn CPM: a complete explanation

You likely already know what CPM stands for: Cost Per Mille. But what does this figure actually tell you? In this article, we explain everything you need to know about CPM on LinkedIn. It is a valuable KPI for assessing your campaign performance. We will share the average LinkedIn CPM for various campaign objectives and discuss how to further optimize a LinkedIn campaign based on CPM data.

Understanding LinkedIn CPM is an essential prerequisite for setting up an effective LinkedIn campaign. It is both a key bidding strategy and a practical KPI to steer on. But first, let’s answer the question: what does CPM actually mean?

CPM meaningLinkedIn CPM

CPM stands for Cost Per Mille, or the cost per 1,000 impressions. On LinkedIn and many other advertising platforms, you can view this at both the campaign and ad level. This tells you how much it costs to display your campaign 1,000 times, as well as the cost to show a specific advertisement 1,000 times.

Why do we use CPM?

CPM is a standard factor across (online) advertising platforms. This makes it a handy KPI for comparing the costs and effectiveness of different platforms. However, there are more reasons to use CPM when analyzing and optimizing campaigns:

  • Cost control: CPM allows you to quickly see how much it costs to display your ad. In many campaigns and bidding strategies, CPM dictates the total cost, so insight into CPM makes it easier to manage your budget.
  • Budget planning: If you know roughly what CPM to expect beforehand, you can use this to align your budget with your audience size. Do you know in advance that your audience is too large for the available budget? Then you can adjust it for a more focused campaign. It also works the other way around: setting your budget based on the size of the target audience.
  • Audience optimization: The average CPM is not the same for every audience. Based on the CPM, you can make choices to approach different target groups as cost-effectively as possible.
  • Comparison with other platforms: As mentioned, CPM makes comparing different advertising platforms very straightforward.
  • Measurability and ROI: Are the campaigns delivering the desired results? CPM is one of the factors that helps you easily determine how a campaign is performing.
  • Optimization: Just like other campaign KPIs, CPM is a valuable factor to optimize for, helping you improve both your ad spend and campaign effectiveness.

LinkedIn CPM compared to other platforms

In LinkedIn Advertising, CPM holds a very unique position. This is because CPM determines 100% of your campaign costs. While on Google you might pay per click (CPC) in an auction, the costs of your LinkedIn ad campaign are determined by the CPM associated with your specific audience. Is your target group popular? Expect a high CPM (> €100 to sometimes even €300). The flip side is also true: if you have a target group that is not frequently targeted by advertisers, you can sometimes appear for < €30.

The fact that CPM determines your LinkedIn advertising costs isn’t always a disadvantage compared to Google’s CPC model. If you have a campaign that performs exceptionally well (high engagement), you can achieve a much higher return from your budget.

Regardless, LinkedIn is often known as a relatively expensive advertising platform. And indeed, LinkedIn’s CPM is higher compared to Instagram or Facebook. However, a higher CPM doesn’t necessarily mean you should ignore LinkedIn as an advertising platform. It is important to understand why the LinkedIn CPM is higher so you know for which audiences and campaigns LinkedIn can be used most effectively.

LinkedIn has a unique professional focus

The main difference between LinkedIn and other (social) advertising platforms is the strong business focus. This is reflected in the users, the content, and the targeting options. On LinkedIn, you aren’t just reaching people with a focus on career-related topics; they are also more inclined to share and consume content with a professional angle. Furthermore, the targeting options have a unique professional focus, such as company names, job titles, education, and specific skills. These three factors combined mean that an impression or click on LinkedIn is considered more valuable from a B2B perspective—and therefore costs more.

High-quality leads

While this is a result of the professional focus mentioned above, it is worth highlighting separately. The business focus of LinkedIn, combined with specific campaign and audience settings, allows you to collect very high-quality leads through the platform.

Competition

Although LinkedIn is known for higher costs per 1,000 views, practice shows that this varies greatly per target group. The degree of competition heavily influences the CPM; for example, marketers, IT professionals, and healthcare professionals are audiences where we typically see a higher CPM. However, in niche markets, the CPM can actually turn out relatively low while maintaining the benefits of a professional audience.

Average LinkedIn CPM per campaign objective

What can you expect from a LinkedIn CPM? We show what you can expect for some of the campaign objectives we frequently use.

LinkedIn CPM, average CPM on LinkedIn for brand awareness, website traffic, video views, and lead generation

The graphic above is unfortunately outdated. For the most recent figures, please refer to our LinkedIn Benchmark.

Which factors influence LinkedIn CPM?

To truly understand LinkedIn CPM, it’s important to know which factors influence it. We’ve already mentioned audience and competition, but those aren’t the only ones. These factors also affect your LinkedIn CPM:

  • Seasonality: We often see CPM fluctuate during holiday periods, such as summer and autumn breaks, as well as around Christmas. In our experience, this comes down to two factors: the activity of your target group on LinkedIn and the level of competition. The result varies significantly per audience and period. For instance, an audience may be less active during the summer, but due to lower competition, the CPM might be lower, making it still interesting. That same audience might have a higher CPM during a shorter break if competition remains high. In our view, it’s always worth testing!
  • Bidding strategy: The options available for bidding strategies vary per campaign and ad type, but they can make a big difference in your results and CPM. The default strategy is often set to “Maximum Delivery” (automated). However, you can also choose a different strategy, such as a manual cost cap or a manual CPM limit.
  • Ad type: There is a significant difference between ad types. For example, InMails are relatively cheap but, in our experience, often less effective. Depending on your message and product, it is worth testing different ad formats. Note that you can only use one ad type per campaign, so testing multiple types requires a higher budget.
  • Campaign objective: It makes sense when you think about it, but the CPM of a Brand Awareness campaign is much lower than when you opt for Lead Generation.
  • Ad relevance: This isn’t unique to LinkedIn, but it is decisive for your results. How relevant is your ad? Relevant ads that the audience responds well to are rewarded by the algorithm: more views at lower costs.
  • Landing page quality: It’s not just the ad; the quality of your landing page matters too.
  • Network and devices: Where do you want to show your campaign? You can choose between just the LinkedIn network or including the LinkedIn Audience Network, and of course mobile versus desktop. The choice between mobile and desktop often depends on the ad type. In our experience, the LinkedIn Audience Network provides a lower CPM, though we find the quality of those placements and clicks questionable. Test and evaluate this per audience.

Tips for a lower LinkedIn CPM

Now that you understand what LinkedIn CPM is and how it works, you naturally want to know how to achieve a lower CPM for your campaigns. The most important tip we can give you is to optimize your target audience. Take advantage of the unique possibilities LinkedIn offers and define your audience as specifically as possible. Not only does this allow you to focus on the people most valuable to your campaign, but it also allows you to create highly specific ads. This immediately strengthens your ad relevance. From there, it is a matter of testing and optimizing. Consider the type of ad, your bidding strategy, campaign objective, and the timing of your advertising.

If you want to read more about LinkedIn CPM or the possibilities of LinkedIn, check out our page on LinkedIn advertising. Prefer to discuss the possibilities further? We are happy to share our knowledge and experience with LinkedIn campaigns for various B2B markets in a personal conversation.