How to set your budget for LinkedIn Ads

LinkedIn ads can be a highly effective tool for SaaS businesses, but if your budget doesn’t align with your target audience size, you may find your campaigns underperforming. The issue lies in a common mistake that many SaaS businesses make: targeting a large audience without ensuring that your budget is sufficient to support that scale.

This blog breaks down the key factors that impact the success of your LinkedIn ad campaigns, providing actionable steps to help you optimise your strategy and drive better results.

The problem with LinkedIn ads

A common issue with LinkedIn ads is a mismatch between your audience size and ad spend. While it’s tempting to cast a wide net and target a large number of potential customers, the budget you allocate must support this effort. Without sufficient ad spend, your ads may only be shown to a small fraction of your target audience, limiting brand awareness and engagement.

For example, if your target audience is 100,000 people but your monthly budget is £1,000, your ads will only be shown to a tiny fraction of that group. Even if they do see your ad, the frequency will likely be too low for it to have a lasting impact.

Option 1: Increase your budget

In an ideal scenario, you could simply increase your budget to match the size of your audience. A larger budget would allow you to show your ads more frequently to your target group, increasing brand visibility and engagement. However, many businesses may not have the budget to support this option, especially in the early stages of growth.

Option 2: Reduce your audience size

The more practical solution, particularly when working with limited resources, is to reduce your audience size to better align with your budget. By narrowing your focus, you can ensure that your ads are shown to a more relevant and engaged group of prospects, making your budget work harder for you.

How to narrow your audience:

• Geographic focus: Limit your targeting to specific regions or cities instead of the whole country.
• Job title focus: Instead of targeting a wide range of job titles, concentrate on key decision-makers, such as founders or senior marketers.
• Company size: If you’re targeting all company sizes, focus on mid-sized companies that are more likely to benefit from your product.

By refining your audience, you increase the frequency of your ads, making sure that your prospects are regularly exposed to your brand, which leads to better engagement and recognition.

The importance of retargeting

In addition to optimising audience size, it’s essential to balance your cold audience targeting with retargeting. A common mistake is to focus too heavily on retargeting, as these individuals are already familiar with your brand. However, it’s crucial to allocate a significant portion of your budget to cold audience targeting to expand your reach.

The ideal approach is a 70/30 split: allocate 70% of your budget to cold audience targeting and 30% to retargeting.

Why this split works:

• Cold audience targeting: This approach focuses on people who have never engaged with your brand. Since this group is much larger, it requires a larger portion of your budget to increase brand awareness and drive engagement.
• Retargeting: The retargeting audience is smaller, so it requires less budget to convert those who have already interacted with your brand.

By increasing your budget for cold audiences, you’re helping prospects move through the funnel and into the retargeting phase, where they are more likely to convert.

Ad frequency and its impact

Ad frequency is crucial for LinkedIn ads to be effective. If your ads aren’t shown regularly, your audience won’t remember your brand or be motivated to engage. Ensuring that your prospects see your ads multiple times a week can significantly improve brand recall and trust.

The goal is for your audience to see your ad enough times for your brand to become familiar to them. Ideally, they should see your ads at least once a week, though more frequent exposure (every day or every two days) will have an even greater impact.

Structuring your LinkedIn ad funnel

LinkedIn ads work best when they’re integrated into a larger marketing funnel. Your LinkedIn campaigns should not be standalone efforts but part of a strategy that nurtures prospects through different stages of their buying journey—from awareness to consideration and ultimately to conversion.

Here’s how to structure your LinkedIn ad funnel:

1. Top of the funnel (Awareness): Focus on creating educational content that introduces your brand to a broad audience.
2. Middle of the funnel (Consideration): As prospects engage with your brand, use lead magnets like eBooks, case studies, or webinars to further nurture them.
3. Bottom of the funnel (Conversion): Retarget prospects who have interacted with your content and encourage them to convert with targeted offers and clear calls to action.

By structuring your ads in this way, you’ll be able to guide prospects through the journey and increase the likelihood of conversions.

Wrapping up

To optimise your LinkedIn ad campaigns, it’s essential to align your budget with the size of your target audience. If your budget is limited, reducing your audience size is a practical solution to ensure that your ads are shown more frequently. In addition, balance cold audience targeting with retargeting and adjust your budget split accordingly. Lastly, maintaining high ad frequency will help keep your brand top-of-mind for prospects and increase engagement.

With these adjustments, your LinkedIn ad campaigns will be better positioned to drive more leads and conversions, helping you scale your SaaS business effectively.

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By Ryan James

Founder of Rocket SaaS