In the first quarter of 2018, we analyzed over 2.5 billion LinkedIn ad impressions and over 3.4 million clicks from AdStage customers. Based on our data, we saw year-over-year CPMs increase 29%, while year-over-year CPCs decreased 12%.
Q1 2018 LinkedIn advertising performance
We observed the following median results among marketers using AdStage products:
- LinkedIn CPM: $6.59
- LinkedIn CPC: $5.26
- LinkedIn CTR: 0.13%
Dive deeper into the Q1 2018 PPC Benchmark Report for the latest trends.
Supply & demand
First quarter 2018 Y/Y spend remained unchanged among same marketers, while Y/Y impressions dropped 41%. We saw very little Q/Q spend change (-1.2%) during the first quarter, while Q/Q impressions decreased 15%.
LinkedIn CPMs decrease by 18%
Our AdStage data shows Q1 median CPMs decreasing for the first time after four consecutive quarters of increasing costs. The 2017 year-end CPMs were up 57% going into 2018, but declined to $6.59 by the end of Q1 2018. We’re yet unsure if the dip indicates a new trend, or if the lower prices are reflective of seasonal swings.
Marketers that we studied reacted to increasing CPMs in 2017 by choosing to keep budgets flat, or pull back slightly. However, lower CPMs are a good signal that maintaining spend will continue to return increased reach of LinkedIn users.
LinkedIn CPCs increase by 4%
First quarter 2018 median CPCs continue to be well below last year averages, down 11.6% Y/Y. Marketers are benefiting from lower engagement costs while budgets continue to buy more impressions. This is a positive trend for new marketers looking to allocate budget for LinkedIn Ads.
We have early indications that CPCs should remain below the 2017 average through mid-year, and at least $1.00 less per click than the high median CPC of $6.31 we observed in Q3 2017.
LinkedIn CTRs increase by 58%
The data from marketers using AdStage showed increasing CTRs throughout 2017, with median CTRs increasing over 112% in 2017. Our data shows Q1 2018 median CTRs dropped slightly ending at 0.13%, a 58% Y/Y increase over Q1 2017. The overall upward trend is a result of better engagement on LinkedIn ads, a good indicator that new LinkedIn Marketing Solutions features are paying off.
As with CPM, it’s too early to say this first quarter CTR correction is the new normal or if we can chalk it up to season swings (the consensus around here is leaning towards seasonal). We’ll learn more as we dig into the mid-year data.
What to expect in 2018
While last year presented us with increased prices and a bump in engagement, marketers may experience a cooling period during the first half of the year. As increased competition continues to be a factor, marketers will need to be more strategic with their spend and focus on strategies that prove ROI.
Video is key to clicks
Video is no longer a nice to have, it’s a necessity. LinkedIn Marketing Solutions is all in on video and is providing helpful tips to nail down the right strategy for your objective. Released at the end of Q1, video for Sponsored Content is now a powerful medium for the toolkit.
Combine LinkedIn video ads with Matched Audiences and Lead Gen Forms, and there’s no question video can work in your favor. In fact, LinkedIn is on record stating that “users are sharing video 20 times more than other content like images or posts.”
According to Buffer’s 2018 State of Social Report, 85% of businesses are planning on creating more video content in 2018.
Additional Budget For A/B Testing
Testing is an ongoing process and new ad types are not always winners with every target audience. With lower CPCs and CPMs relative to last year, it’s safe to allocate more budget to testing which mix of content and placement work best for the target objective.
According to The CMO Survey, reported B2B marketing budgets up over 9% for 2018. That includes a portion for digital, which should factor into grow and testing strategies.
As Linkedin releases more ad features, such as their new Bid Auto-Optimization for Lead Gen Forms, we can expect marketers will see better results from their spend.
In 2017 the overall spend on LinkedIn ads increased 23 percent among marketers on AdStage. We expect that spend will continue to increase as LinkedIn develops new and better ways to connect with leads.
Experts expect brands to shift more budgets to LinkedIn
AJ Wilcox of B2Linked, who manages some of the biggest LinkedIn ad accounts in the world, expects companies to shift more budgets from Facebook to LinkedIn. "The B2B environment on Facebook has gotten rough with job title and company targeting being taken away," AJ said. "Couple that with the fact that Facebook CPMs are rising rapidly, and I think we're about to see a lot more brands invest more heavily into LinkedIn due to the quality of traffic and the reach they can't get on Facebook."
Takeaways and insights
Based on the data from Q1 2018, here are our main LinkedIn insights:
- Advertisers are getting better results with the same amount of spend
- CPCs are down, which provides room to grow and experiment
- Video for Sponsored Content is a game changer. Marketers should take advantage of new ad type opportunities while the competition is low.