LinkedIn Ads ROI calculator 2024

Introduction

In the world of B2B marketing, LinkedIn Ads have become a powerful tool for lead generation. However, to justify your ad spend and secure future budgets, it’s crucial to demonstrate a positive return on investment (ROI). This guide will walk you through a 16-step process to calculate the ROI of your LinkedIn Ads campaigns for lead generation.

Why ROI Matters

According to LinkedIn, 58% of digital marketers need to prove ROI to justify their spending and get approval for future budget requests. While some marketers make the mistake of comparing platforms based on Cost Per Click (CPC), it’s more accurate to use Cost Per Lead (CPL) when evaluating lead generation campaigns.

The Process

Step 1: Determine Your Annual Customer Value

• Establish how much a customer is worth to your business per year
• Ideal annual customer value: > €4,000
• Example: €9,000 annual customer value

Step 2: Set Your Campaign Investment

• Decide on your media investment
• Consider measuring ROI over a one-year period for B2B campaigns
• Example: Five-month campaign with €11,500 total investment

Step 3: Estimate Your CPC

• European average: ~€6
• Example: Estimated CPC of €4

Step 4: Calculate Expected Clicks

Number of clicks = Media investment / Average CPC
Example: 11,500 / 4 = 2,875 clicks

Step 5: Estimate Click-to-Lead Conversion Rate

• LinkedIn average: ~6.1%
• Example: 7.5% conversion rate

Step 6: Calculate Total Leads

Number of leads = Number of clicks × Conversion rate
Example: 2,875 × 7.5% = 216 leads

Step 7: Determine Cost Per Lead (CPL)

CPL = Media investment / Number of leads
Example: 11,500 / 216 = €53 per lead

Step 8: Estimate Lead-to-SQL Conversion Rate

• Example: 50% conversion rate from leads to Sales Qualified Leads (SQL)

Step 9: Calculate Number of SQLs

SQLs = Leads × Lead-to-SQL conversion rate
Example: 216 × 50% = 108 SQLs

Step 10: Estimate SQL-to-Request Conversion Rate

• Example: 70% conversion rate from SQL to formal requests (e.g., quotations)

Step 11: Calculate Number of Requests

Requests = SQLs × SQL-to-request conversion rate
Example: 108 × 70% = 75 requests

Step 12: Determine Cost Per Request

Cost per Request = Media investment / Number of requests
Example: 11,500 / 75 = €153 per request

Step 13: Estimate Request-to-Customer Conversion Rate

• Example: 50% conversion rate from requests to customers

Step 14: Calculate Total Customers

Customers = Requests × Request-to-customer conversion rate
Example: 75 × 50% = 38 customers

Step 15: Calculate Annual Revenue

Annual Revenue = Number of customers × Annual customer value
Example: 38 × 9,000 = €342,000

Step 16: Calculate ROI

ROI = Annual Revenue / Media investment
Example: 342,000 / 11,500 = 29.74

This means for every euro invested, you’re getting €29.74 in return over a year.

Conclusion

By following these 16 steps, you can  accurately calculate the ROI of your LinkedIn Ads campaigns for lead generation. This data-driven approach will help you optimize your marketing strategies and justify your ad spend to stakeholders.