# **What Is a Good CPM on LinkedIn for B2B Companies and How to Improve It? 40+ Experts Share Their Best Practices**

#### Table of contents

- What is LinkedIn Ads CPM?
- Is LinkedIn Advertising Effective?
- What is the Average CPM on a LinkedIn Ad?
- What is a Good CPM on LinkedIn Ads?
- Factors that Influence LinkedIn CPM Negatively
- How Companies Optimize Ad Spend on LinkedIn: 5 Best Practices
- FAQ

## What is LinkedIn Ads CPM?

CPM, or cost per impression, is a LinkedIn ad pricing model in which you pay for every 1,000 impressions. You will be required to pay when people view your ads, not when they interact with them.

To calculate your LinkedIn ads CPM, simply divide the total ad spend by the total impressions your ad gets.

For example, if the total ad spend is $8,000 and the total impressions are 145,000, the CPM will be $55.

## Is LinkedIn Advertising Effective?

To find out if B2B advertising on LinkedIn is the real deal, we surveyed 46 B2B companies. 65.22% of our respondents belong to B2B services/products, while 34.78% are agencies or consultants working for a B2B company.

More than 90% of our respondents use LinkedIn ads, and the majority of them have been advertising on the platform for over a year. Over 80% believe LinkedIn ads are very effective.

## What is the Average CPM on a LinkedIn Ad?

According to 51 B2B companies, the average CPM for LinkedIn ads was **$26.91** in February of 2023.

## What is a Good CPM on LinkedIn Ads?

A good CPM for LinkedIn ads is subjective and can depend on various factors, such as industry, company size, and location. Many agreed it varies and can range from <$1.00 for generic ads to >$200 for highly specific campaigns.

## Factors that Influence LinkedIn CPM Negatively

Several factors can cause the CPM to spike, including audience specificity, niche industries, ad relevance scores, ad format, and bidding strategy.

### Audience specificity

The more generic your audience is, the lesser the CPM; the more specific, the higher the CPM. Targeting senior positions and decision-makers increases costs.

### Niche industries

Advertising to a niche industry will drive the CPM higher due to less competition in these markets.

### Ad relevance scores

Higher ad relevance scores denote engaging content and often lead to lower CPMs, whereas lower scores increase costs.

### Ad format

The type of ad format impacts the CPM. Sponsored content is typically the most expensive, while text ads are comparatively cheaper.

### Bidding Strategy

Choosing automated maximum delivery may spike CPM; opting for manual bidding allows you to control costs more effectively.

## How Companies Optimize Ad Spend on LinkedIn: 5 Best Practices

1. **Targeting the right people with Matched Audiences**: Utilize LinkedIn's tools to hone in on specific industries and exclude irrelevant options.
2. **Narrowing your target audience**: Focus on segments that are aligned with your existing customer profiles to reduce ad spend.
3. **Testing and experimenting with LinkedIn ads**: Conduct various tests to find optimal CPM settings and configurations.
4. **Advertising to A- and B-level employees**: Target these employees to influence decision-makers without incurring high CPMs associated with C-suite targets.
5. **Considering other pricing models than CPM**: Evaluate CPC or other models that might offer better ROI based on campaign objectives.

## FAQ

**What is Databox and how can it help me improve CPM and ROI from LinkedIn Ads?**

Databox is a Business Intelligence platform that enhances visibility into ad metrics like CPM, CPC, conversions, and engagement.

**How can Databox help me optimize LinkedIn Ads CPM?**

Databox provides customizable dashboards to track and visualize LinkedIn ads’ CPM alongside key performance indicators.