LinkedIn Ads Bidding Strategies: Cost Cap vs Auto

We already covered why "Maximum Delivery" (Auto) is dangerous. Now we go deeper. Once you have graduated from "Manual Cost Per Click," you enter the world of Cost Caps. This is where the algorithm starts working for you, not against you. But you have to give it the right constraints.

The Theory: The Vickrey Auction

LinkedIn runs a "Second Price Auction" (mostly). If you bid $10.00 and the next highest bidder is $6.00, you pay $6.01. However, in 2024, most platforms are moving to First Price or "Value Based" auctions. This means your bid matters more than ever. You are not just bidding money; you are bidding Expected Value. Bid * CTR * CVR = Ad Rank

Strategy 1: The "Bully" Bid (Cost Cap)

Goal: Dominate a small, high-value audience. Method:

1. Identify your "Tier 1" Audience (e.g., CEOs of Fortune 500).
2. Set your Cost Cap to 3x the suggested bid.
3. Why: You tell LinkedIn, "I will pay whatever it takes to win this impression."
4. Result: You win 90% of the auctions. Your CPM is high ($150+), but you ensure your target sees you.

Strategy 2: The "Bottom Feeder" Bid (Manual CPC)

Goal: Get cheap traffic from a broad audience. Method:

1. Target a broad audience (e.g., Function: Marketing, 2M+ size).
2. Set Manual Bid to Floor + $0.05.
3. Why: You only enter auctions where there is no competition. You pick up the "leftover" inventory.
4. Result: Low CPM ($20), Low CPC ($4). Volume will be inconsistent, but cheap.

The "O-Curve" Optimization

Bidding is not static.

• Launch: Bid High (Auto or High Manual) to get data fast.
• Stabilize: Switch to Manual Bid to control costs.
• Scale: Switch to Cost Cap to let the algorithm find efficiency at volume.

Summary

• Manual CPC: Use for 80% of your campaigns. It is safe, predictable, and creates a ceiling.
• Cost Cap: Use for "Must Win" audiences where losing an impression is worse than overpaying.
• Auto: Use only if you hate money.