Why Benchmarking Your LinkedIn Ad Performance Matters
Running LinkedIn ads can be an incredibly powerful way to connect with your target audience—especially in the B2B world where LinkedIn thrives. However, understanding whether your campaigns are truly successful requires more than just looking at the numbers in isolation. You need context, and that’s where benchmarking comes in. Benchmarking allows you to compare your LinkedIn ad performance against industry standards, helping you understand if your campaigns are as effective as they could be.
If you’re working with a LinkedIn ad agency, they may provide insights based on past experience, but benchmarking provides solid, data-driven context. It helps answer crucial questions like, "Is my click-through rate good?" or "Am I spending too much for each lead?" By comparing your performance metrics against industry averages, you gain the clarity needed to optimize campaigns for better results.
1. Identifying the Right Metrics to Benchmark
Before diving into industry benchmarks, it’s essential to know which metrics matter most for LinkedIn ads. Not all metrics are created equal, and some provide more valuable insights into your campaign's effectiveness than others. Here are the key metrics you should consider when benchmarking your LinkedIn ad performance:
A. Click-Through Rate (CTR)
CTR is a measure of how many people clicked on your ad compared to how many saw it. It’s a direct reflection of how engaging and relevant your ad content is. If your CTR is lower than industry standards, it might indicate that your headline, image, or messaging isn't resonating well with your audience.
B. Cost Per Click (CPC)
CPC indicates how much you’re paying each time someone clicks on your ad. Benchmarking your CPC helps ensure that you’re getting a good return on your ad spend. A higher CPC than average may mean that your targeting is too competitive or your ad quality is lacking.
C. Conversion Rate
While CTR and CPC are important, they don’t tell the whole story. Conversion Rate measures how many people who clicked your ad took a desired action, such as filling out a form or downloading a resource. This metric is critical in determining the ultimate success of your campaign, especially if your focus is lead generation.
D. Cost Per Conversion
This metric tells you how much you’re paying for each lead or action that your ad generates. A high cost per conversion may suggest that, while people are clicking on your ad, the landing page or offer may not be convincing enough to convert visitors.
E. Engagement Rate
Engagement rate measures other forms of interaction, such as likes, comments, and shares. This can provide additional context to the effectiveness of your content, particularly in how well it resonates with your audience and encourages them to engage beyond the click.
2. Gathering Industry Standard Data for Benchmarking
To accurately benchmark your LinkedIn ad performance, you need to gather reliable industry data. Here are a few ways you can find these standards:
A. Industry Reports
Several marketing platforms and research organizations regularly publish reports with advertising benchmarks. For LinkedIn ads, companies like HubSpot, WordStream, and LinkedIn itself often release useful data on industry-specific performance standards. These reports provide metrics like average CTR, CPC, and conversion rates broken down by industry.
B. LinkedIn’s Campaign Manager
LinkedIn’s own Campaign Manager offers a handy tool for comparing your campaign performance against similar campaigns. This feature provides you with insights into how your ads are performing relative to other advertisers in your sector, helping you see where you stand.
C. LinkedIn ad agency Insights
If you're partnered with a LinkedIn ad agency, they may have access to proprietary data or past campaign performance across a range of industries. Agencies can leverage this data to provide a customized benchmark that’s tailored to your business type, ensuring you get the most relevant comparisons.
3. How to Compare and Analyze Your LinkedIn Ad Metrics
Once you have the industry benchmark data, it’s time to compare your metrics with these standards. Here’s how to go about it:
A. Evaluate CTR Against Benchmarks
Start by comparing your CTR to industry averages. For example, if the average CTR for your industry is 0.6%, and your ads are only getting a 0.3% CTR, this indicates that your ads aren’t capturing enough attention. Consider testing different types of creatives, headlines, and CTAs to increase engagement.
B. Assess Your CPC
If your CPC is significantly higher than industry standards, it’s time to refine your audience targeting or bid strategy. A high CPC could be the result of overly competitive targeting criteria. You might want to consider narrowing down your audience to reduce competition or adjust your bidding to maximize efficiency.
C. Review Conversion Metrics
High CTRs and low CPCs are great, but if those clicks aren’t converting, you need to figure out why. Compare your conversion rate to the industry benchmark. If your conversion rate is lower, there might be issues with your landing page experience. Make sure the page aligns with the messaging in your ad and provides a clear and compelling call to action.
D. Keep an Eye on Cost Per Conversion
If your cost per conversion is higher than average, it might be worth evaluating your offer. Is the incentive strong enough? Are there barriers (like a complicated form) preventing prospects from converting? This metric tells you whether your advertising budget is being used effectively, and keeping it in line with industry standards helps maximize your ROI.
4. Optimizing Your LinkedIn Campaigns Based on Benchmarking Insights
Benchmarking is only useful if it leads to actionable insights and improvements. Here are some ways to optimize your LinkedIn campaigns based on the data you’ve gathered:
A. Revise Your Ad Copy and Creative
If your CTR is underperforming, experiment with different ad formats and messages. A/B testing various ad elements can help you pinpoint which creative and messaging strategies resonate best with your audience.
B. Refine Your Targeting
Targeting is a major factor in determining CPC and engagement. Ensure that your ads are reaching the right people by reviewing your audience settings. Narrow your targeting to focus on those most likely to convert—this can also reduce costs and increase relevance.
C. Optimize Your Landing Pages
If your CTR is healthy but conversion rates are lacking, the problem may be with your landing page. Ensure that your landing page delivers what the ad promises, loads quickly, and provides a frictionless user experience.
D. Adjust Your Bidding Strategy
If your CPC is too high, consider testing different bid strategies. LinkedIn offers options like automated bidding, which might help bring down costs by allowing LinkedIn’s algorithm to optimize for the lowest CPC while still reaching your target audience effectively.
Conclusion: The Power of Benchmarking with a LinkedIn Ad Agency
Benchmarking your LinkedIn ad performance against industry standards is an essential step toward improving the effectiveness of your campaigns. By focusing on key metrics like CTR, CPC, and conversion rates, and comparing them to reliable industry data, you gain valuable insights into where your campaigns excel and where they fall short.
Working with a LinkedIn ad agency can streamline this entire process. With access to comprehensive data and industry expertise, an agency can help you navigate benchmarking with precision, offering actionable recommendations that lead to measurable improvement. By continuously optimizing your campaigns based on these benchmarks, you can ensure that your LinkedIn ads remain competitive, efficient, and most importantly, successful in achieving your marketing goals.
