Sep 8, 2020
Show Resources:
Little Easter Egg hack - each embed you see for a chart, you can flip through the GDS charts. There's an extra I didn't publish.
LinkedIn Learning course about LinkedIn Ads by AJ Wilcox: LinkedIn Advertising Course
Contact us at Podcast@B2Linked.com with ideas for what you'd like AJ to cover.
Show Transcript:
What happened to LinkedIn Ads during the COVID-19 pandemic? Is there an opportunity for you as an advertiser? Spoiler alert, yes.
Welcome to the LinkedIn Ads Show. Here's your host, AJ Wilcox.
Hey there LinkedIn Ads fanatics. So I've gotten lots of questions from advertisers during the COVID pandemic, asking about what's changed. We definitely noticed the impact. So I've been telling people kind of shooting from the hip, like, oh, 5 to 10% drop in cost per click.
0:38
Well, I decided to actually dig into the data. And what I found is
there's much more to the story, and I'm super excited to tell you
all about the impact, but especially the opportunity for you as
advertisers. In the news, not a ton has changed recently on
LinkedIn Ads, but in personal news, it's the summer and our air
conditioner went out. We spent three days in the dark with all the
windows shut. No one allowed to open a window or a door just to
keep the house from getting to the 80 degrees or 27 Celsius like it
got on the first day we realized that it wasn't working. You know,
there's something wrong when your butter is a pool rather than a
cube. And of course, everyone's excited about spending a bunch of
money on a new air conditioner during a pandemic. That was sarcasm.
A review to highlight here thatch_o said "best marketing podcast".
"This is the best marketing podcast hands down. As a PPC marketer,
I want to improve upon my LinkedIn ad skills. AJ is not only very
knowledgeable on the topic, he's an engaging speaker and makes
learning more about LinkedIn ads entertaining, easy and fast. This
podcast has become one of my very favorites, and is a must listen."
thatch_o, thank you so much for submitting that. That warms my
little ginger heart. I've said this in the past but the way I
approach this podcast is thinking of all of you as listeners like
you are a member of my team. And it really is a masterclass on
LinkedIn ads. I don't hold anything back and I train you just as if
I would train the members of my team. It makes me so happy when I
find that people like you are getting a lot out of this. And it is
helpful information. So thank you, and everyone else I want to
feature you. So please, whatever podcast player you are using,
write a view, and I'd love to feature you here. Okay, without
further ado, let's hit it.
2:18
COVID-19 has had a strong influence on most of the major ad
platforms. I've heard from multiple large Facebook advertisers that
cost per click and cpms have fallen by like 30 or 40%. And one big
advertiser even told me that YouTube ad inventory for them
decreased by 80% at one point. So we analyzed the data from $1.5
million worth of spend across almost 2,900 campaigns. So it's a
large data set. But certainly, if LinkedIn released something like
this, it could tell a more complete story. Or of course, if any of
you listening have access to a much larger data set, let me know we
can collaborate. But here's how the analysis went. We ingested the
1.5 million in advertising spend and segmented them out by ad
format and bid type. And we analyzed the differences in both
average cost and average click through rate for every day from
February 1 to August 28. And the goal of this was just to find
insights. When were engagement rates high and low, when we're costs
high and low. And what we saw was especially interesting around the
costs because we saw average costs decline from February to April,
and then have rebounded and some even fully recovered.
3:33
Results
So now we're going to go into the results and I'm going to share with you what we found, which I found really interesting. And if you're like me, and you listen to podcasts really sped up, I listened to podcasts at two and a half times speed, then this might be a part where you want to slow it down just so you can get a feel for the metrics because we're going to throw out some percentages. Overall we found cost per click to drop about 2.9% from February to March. And then they dropped another 25.2% from March until April. So looking at the platform, overall, it drops 28.1%. And those are costs per click. If you click on the link down in the show notes, it'll take you to the post where you can see charts. And you can see what this drop looks like and then what the recovery looks like. And I'll do my best to describe it to you over words, even though I'm not what I would call wordsmith. And then in May, we noticed a recovery of about 11.5%. And then that recovery, even though there was a little bit of a drop in July, kept going all the way through August the end of our data set. And the net result of this is that we're currently as advertisers paying 13.4% less than when we started before the pandemic. So to me, this spells opportunity. I love buying ads at a 13% discount. But then the story goes deeper here because we started breaking it out by individual ad type and what we found when we were looking at just sponsored content ads, we noticed a similar very large drop, 27.7%. But they've only recovered about 6% since that drop. So what I'm telling you is the most competitive inventory on LinkedIn is currently running at a 21.7% discount. And of course, since the platform overall is at a 13% discount, and sponsored content is at a 21.7% discount, that means that the other ad formats are either dragging that down or reversing it. And this is true when we broke out the other ad formats and looked at their data. Text ads are currently costing almost 18.5% more now than they did in February. Dynamic ads currently cost 17% more than in February, and the sponsored messaging ad formats, which are message ads and conversation ads, are now costing almost a 38% premium compared to that of February and granted the majority of our data set is sponsored content, that's the majority of what we run. But we're still talking 10+% of the data being dedicated to each of these ad formats. So it sure looks solid to me. And I'm not exactly sure what would cause sponsored content to get abandoned so much. But text ads and dynamic ads and sponsored messaging to get adopted so quickly. I would have guessed that text ads and dynamic ads because they're only on desktop would actually get more inventory, because so many people working from home on their computers all day and not using their mobile devices because they don't have to worry about their boss seeing them on LinkedIn or a social network. But the data is telling us that these ad formats are actually more expensive, which is crazy.
6:42
Okay, here's a quick sponsor break, and then we'll dive into what
we found by each individual bid type.
6:47
The LinkedIn Ads Show is proudly brought to you by B2Linked.com,
the LinkedIn Ads experts.
6:57
If the performance of your LinkedIn Ads is important to you,
B2Linked is the agency you'll want to work with. We've spent over
$130 million on LinkedIn Ads, and no one outperforms us on getting
you the lowest cost per lead. And we're the only media buying
agency to be official LinkedIn partners, and we don't have a sales
team. So you'll deal directly with LinkedIn Ads experts from day
one. Fill out the contact form on any page of B2Linked.com to chat
about your campaigns, or heck, send a carrier pigeon. Our mission
is always to make you look like the hero.
7:28
All right, let's jump into the differences that we saw by bid type
because this was really fascinating. And again, refer to the charts
that you can see here in the post that I linked to in the show
notes. If you've been listening to the podcast for a while, you
know that there is a significant difference in the costs on
LinkedIn, depending on your bid type. So if you look at these
charts, you see pretty much exact opposite charts for those who are
bidding CPC versus those who are bidding CPM. And what we've done
is based off of the bid type, we looked at your effective cost per
click. So no matter how you were bidding, what your cost per click
ended up being. And advertisers paying my cost per click are
currently still buying LinkedIn Ads at a 14.3% discount. While
advertisers who are paying CPM are currently paying 49.4%, more
than before the pandemic. So, the lesson here is that the majority
of advertisers should be bidding CPC and not using auto bidding or
CPM. They're being way overused, and it's causing them to pay
significantly more per action. As you know, from listening to
Episode 06 about bidding and budgeting, a low CPC bid strategy is
cheaper than auto bidding about 90% of the time. And I think the
simple reason why so many advertisers are using these inefficient
bid types is that auto bidding is the default bid type when you
build most campaigns. So advertisers who don't know better will
oftentimes just go with the default. So when did we see these costs
start to drop. Well, what's so interesting is that I was expecting
a precipitous drop right in the middle of March, when advertisers
were starting to come to grips with the reality of impending
business closures and potential global recession. But check out
this heat map picture that I've got in the post showing daily
performance for all of March. And what we see is that costs really
didn't start to drop until the 23rd of March. We see cost per
click, we're definitely in the eights. And you'll see them in red
because this is a scale of red are the highest CPCs and green are
the lowest. And it starts to go yellow around the 23rd and 24th of
March and goes green for the rest of the month. And I think this
makes sense because B2B companies tend to move a little bit slower.
So it looks like companies waited a little bit to cut their budgets
back and actually made those cuts later in March, and certainly
early April, as we definitely saw costs really drop in April. So
takeaways for you, I think LinkedIn advertisers are buying at a
13.4% discount right now. So if you're on the fence about investing
or increasing budget, this is just a great time to do that. And
surprisingly, the less competitive ad formats have actually
increased in cost. So they're not as advantageous a buy, but
sponsored content being still down by 21.7%. That seems like a
great discount. So any of you who want permission to run sponsored
content, you've got it from me, that's for sure. Another takeaway
here is that too many advertisers are bidding using either auto
bidding or CPM rather than cost per click, which is less efficient
the majority of the time, and it looks like most advertisers really
held steady through most of March, and then the big budget
withdrawals happened during April. I want to ask a favor of you. If
you know anyone who manages LinkedIn ads, or has an extreme
interest in them, please share this post with them or share this
episode, or both. I would absolutely love to see this information
get into the hands of all those who are advertising. And with that
being said, I've got the episode resources for you coming up. So
stick around.
11:16
Thank you for listening to the LinkedIn Ads show. Hungry for more?
AJ Wilcox, take it away.
11:27
Okay, so of course, the big resource here is going to be the link
to the study that I did. So you'll see that it's
B2Linked.com/blog/COVID-19effectonlinkedInads. Don't try to do that
from memory. Just go to the show notes, or just navigate to the
B2Linked.com blog and click on one of the latest posts. And there
is a little easter egg hack for those of you who are sticking
around. I embedded these charts into the post through Google Data
Studio. And I just realized that in Data Studio, you're not limited
to just the individual page. And there were some extra charts that
I didn't publish, but created. So if you're interested, just flip
through there on any of them and just check that additional info
out. If you're new to LinkedIn ads or have a colleague that you're
trying to train, definitely check out the course that I did with
LinkedIn Learning. The link is, of course down below as well. And
it is either free or $25, depending on your LinkedIn subscription.
And it is by far the best training resource that I've seen out
there for LinkedIn ads. And it's a heck of a lot cheaper than
hiring me to train your team individually. Look down at your
podcast player right now and make sure that you've nailed that
subscribe button, and then please rate the podcast. Obviously, I'd
appreciate five star,s but whatever. And do leave a review because
I would love to shout you out here on the show. And of course, if
you have any feedback, any questions, any topics you'd like us to
cover here on the show, email us at Podcast@B2Linked.com. And with
that being said, I'll see you back here next week. Cheering you on
in your LinkedIn Ads initiatives!