< Previous: Make the most of your budget | Analyze your campaign performance: Next >

How bidding works

Space for advertising is limited, so marketers compete in ad auctions by bidding. You compete against other advertisers targeting the same audience. 

When you create a campaign in Campaign Manager, the advertising platform on LinkedIn, you’ll choose your bid type and set your bid.

Why bidding matters

If your bids are too low, your ads will not get delivered and the audience you want to reach won’t see your ads.

We also use a “second-price auction”. That means instead of having to pay the full price, the winning bid pays $0.01 more than second-highest bidder. So you can set your bids as high as you are comfortable based on the true value of your ad for its audience, but you will not have to pay this full amount.  

Smart bid management will improve your ROI and ensure you’re spending your marketing budget where it matters most to your business.

Types of bids

Maximum Cost Bid - You set the bid yourself. Our system will not charge higher than the bid you set. We recommend using this option if you want the most control over your cost per result.
Types: cost per click (CPC), cost per 1,000 impressions (CPM), or cost per view (CPV). For objectives “Website conversions” & “Lead generation”, we also have optimization built in, so it will adjust your Maximum Cost bid dynamically to those more likely to convert or submit a lead-gen form.

Automated Bid - Our system uses historical campaign data and member information to automatically set the right bid. We recommend using this option to get more results for your budget, but your cost (e.g. CPC) may be higher than Maximum Bid. Note: This option charges by impression, or every time your ad is served, and currently only supports Sponsored Content.

How to choose the right bid type

How do I pick between Maximum Cost Bid (e.g. “Maximum CPC”)  versus Automated Bid?If your primary goal is to get more results for your budget (e.g. the most clicks), select “Automated bid”. Note: Your cost per result may increase if your campaign isn’t spending its budget with Maximum Cost Bid.

If your primary goal is to have the most control over your cost per result (e.g. keep your CPCs under $10), select “Maximum Cost bid”.

What are the optimizations available for the bidding options?

Maximum Cost Bid best practices

When you create a campaign in Campaign Manager, you can set your bid, budget, and scheduling. Use these tips to get started with a smart bidding strategy:

•  Bids and budgets work together to support campaign performance. Learn the best ways to get started with your budget.

•  Start at the high end of the recommended range. Campaign Manager will suggest a bid range that makes your ad content most likely to be seen. For a strong start, bid toward the top of that range.

•  If your campaign is not winning auctions, your ads are not being seen. Try bidding higher above the suggested range to increase chance of winning. You will only pay the minimum needed to win, not your maximum.

•  Try reducing your bid slowly to find your ideal level. Monitor campaign performance and stop lowering the bid amount if you see a dip in key metrics (like impressions, clicks, or conversions).

•  Experiment with changing your bid type to see how it affects the delivery and performance of your campaign. For example, if you’re bidding by cost per 1,000 impressions (CPM), you could change the pace of your ad spend by switching to cost per click (CPC).

•  Select Audience Expansion to reach more people who are similar to your target audience. This increases the number of people seeing and clicking on your content, which generally decreases the bid needed to win.

Automated Bid Best Practices

•  Turn on Automated Bid on campaigns that are spending 85% of their daily budget with Maximum Cost Bid. In Campaign Manager, check out the “Avg. Daily Spend” in the “Budget & Bid” column and compare it to your “Daily Budget”. Is the percentage of spend around 85% of its daily budget? If yes, it will be a good campaign to consider automated bidding.

•  High costs? Lower the campaign’s daily budget to the actual spend level of when using Maximum Cost Bid. For example, if the daily budget is set to $200, but you're spending only $100 per day, lower the daily budget to $100 to see lower costs. You can check daily spend via the “Avg. Daily Spend” column.

•  Use forecasting toolbox to compare Maximum Cost Bid and Automated Bid. When setting up a campaign in Campaign Manager, the forecasting tool can dynamically estimate performance for your budget. Pick the option that works better for your goals.