Advertisers are hitting the brakes on LinkedIn spending as ad costs have more than doubled in the last two years. This dramatic price hike is causing many brands, particularly small and medium-sized ones, to plan a 20% budget cut. They are now looking for more affordable and wider-reaching alternatives like Meta, raising questions about LinkedIn’s long-term value for a broad range of businesses.
Advertisers Feel the Squeeze from Rising Costs
A growing number of marketers are expressing frustration with LinkedIn’s advertising platform. One marketer summed up the feeling by saying, “LinkedIn is just way too expensive to be worth it most of the time.” This sentiment is becoming common across the industry.
The numbers support this feeling. Over the last two years, both the Cost Per Mille (CPM) and Cost Per Click (CPC) on LinkedIn have nearly doubled. This makes it a difficult platform for small and medium enterprises to compete on, as larger brands with bigger budgets continue to drive up prices.
As a result, many businesses are reallocating their funds. Smaller companies are shifting their advertising budgets to platforms like Meta, which offer a broader audience reach and lower cost-per-click, providing more bang for their buck.
Deepak Mann, VP of Marketing at 1% Club, noted that the high costs mean LinkedIn is now viewed more as a branding tool rather than a platform for driving direct sales, as it can strain budgets two to three times more than other channels.
Why are Brands Pulling Back from LinkedIn Ads?
The decision to cut LinkedIn ad spending isn’t based on a single issue. Instead, it’s a combination of factors that make the platform less appealing for a growing number of businesses, especially those outside of niche B2B industries.
Several key reasons are behind this strategic shift in digital advertising budgets. These issues range from direct costs to the general behavior of users on the platform.
- Higher Ad Rates: LinkedIn’s CPM and CPC rates are currently 15-20% higher than on other major social media platforms.
- Lower Audience Engagement: Users on LinkedIn are often less receptive to ads compared to users on more consumer-focused platforms.
- Better Alternatives: Competing platforms like Meta, Snapchat, and X offer broader reach and more cost-effective results for many campaigns.
Yasin Hamidani, a director at Media Care Brand Solutions, highlights that in a market like India, LinkedIn’s high CPM rates make it unattractive for brands that want to reach a wide consumer base. The platform’s high costs are simply not justifiable unless the target audience is a very specific professional segment.
A Comparison of Social Media Ad Costs
The rising costs on LinkedIn become clearer when compared directly to its competitors. High demand for specific professional audiences, such as in IT or Finance, has pushed prices up significantly due to the platform’s auction-based model.
Here is a breakdown of the average ad cost increases across major platforms:
| Platform | Average CPM Increase | Target Audience |
|---|---|---|
| 20% | B2B Professionals | |
| Meta | 10% | General Consumers |
| Snapchat | 15% | Younger Demographics |
| X | 12% | Broad Audience |
This data clearly shows that LinkedIn’s ad cost inflation is outpacing other social media giants. For businesses with tight budgets or those targeting general consumers, the return on investment can be much stronger on platforms like Meta or X.
Is LinkedIn Still Worth it for B2B Marketers?
Despite the high costs, LinkedIn hasn’t lost all its value. For B2B companies targeting high-value decision-makers, the platform remains essential. Sectors like IT, finance, and SaaS find that the quality of leads from LinkedIn is often superior to other channels.
Shailendra Singh Mehta of AdLift explains that the premium pricing reflects the value of reaching a high-intent professional audience. A campaign might generate fewer leads, but if those leads are more qualified, the higher cost can be justified, especially when the lifetime value of a customer is high.
However, the platform’s effectiveness is limited for B2C brands. The audience is primarily made up of professionals in a work-oriented mindset, which is not ideal for consumer-focused marketing. Petal Gangurde of XYXX Apparels also points out that there’s a lack of information and education about LinkedIn’s ad ecosystem. She suggests that LinkedIn needs to be more aggressive in sharing case studies and creating ad formats that appeal to a wider range of industries beyond finance and tech.
