How much should you spend on LinkedIn Ads in 2025?

I keep coming back to this question, and I know I’m not the only one: how much should you actually spend on LinkedIn Ads in 2025?

On paper, it looks straightforward. There’s even a neat formula for it:

Budget = (Audience size × Penetration × Frequency ÷ 1000) × CPM

Plug in your numbers, and voilà — a budget.

But if you’ve ever run campaigns, you know it’s not that clean. The formula tells you the ceiling for efficient spend, but it doesn’t tell you when to start small, when to expand, or how to keep spend from getting wasted.

So let’s answer this question properly: both from the perspective of someone just getting started with LinkedIn Ads, and from the perspective of someone who wants to scale efficiently without burning cash.

Two scenarios you need to consider

There are really only two ways companies approach LinkedIn Ads. And which camp you fall into determines your starting budget.

Scenario A: You already have healthy website traffic

If you’re driving traffic through channels like Google Ads, SEO, or paid listings, and that traffic is converting, then you can start LinkedIn Ads with $1,000/month.

At that budget, LinkedIn should be used for retargeting only. Why? Because you already have qualified traffic coming in, and LinkedIn’s insight tag lets you retarget all visitors, not just the ones who arrived through LinkedIn itself.

Retargeting means showing up in the feed of people who’ve already raised their hand in some way. You’re not introducing yourself cold; you’re reinforcing trust.

The types of retargeting content that work best here:

• Case studies and testimonials
• Customer success stories
• Educational “how-to” videos
• Snippets from your community or thought-leadership
• Requesting prospects to book a demo with you

Done right, $1,000 on retargeting can start producing ROI within 30–60 days, because these visitors are already mid-funnel.

Scenario B: You’re building LinkedIn Ads as a silo

This is where most companies underestimate the cost. Running cold campaigns in LinkedIn isn’t cheap, and it takes time to collect enough data, build awareness, and nurture prospects into hand-raisers.

If you’re going this route, I recommend a minimum of $5,000/month for at least 3–4 months.

Why that much? Because you’ll need to:

1. Run cold prospecting campaigns to attract attention.
2. Build a pool of engaged visitors (your “digital hand-raisers”).
3. Layer retargeting campaigns to nurture those hand-raisers.
4. Finally, convert them into paying customers.

This cycle takes time and enough budget to build statistically meaningful audiences. At $5,000/month, you’ll typically need 3–4 months before you see break-even ROI. Beyond that, with refinement, profitability becomes more realistic.

If you're looking to calculate the exact number you'd need to spend for your business, read on.

Four levers that drive spend

Once you’ve decided whether you’re in retargeting or silo mode, the math kicks in.

There are four levers that determine your ideal budget:

• Audience size: Your true Serviceable Addressable Market on LinkedIn.
• Penetration: The percentage you can realistically reach (30–70%, with 50% being a healthy target).
• Frequency: How often your ICP should see you in 30 days (6–8 for awareness, 10–12 for demand creation).
• CPM: The going market rate for attention. In SaaS, $100–200 CPM is becoming the norm, but it also depends a lot on your audience size and how many other companies are actively advertising to them.
  
  If you're looking to understand what your CPM will be here's a process I typically follow:
  
  Create a campaign, select Brand Awareness objective, build your ICP audience, switch to “Impressions” bidding goal, and switch to Manual Bidding. This setup gives you a recommended CPM bid. It is an accurate real CPM when using Maximum Delivery, give or take 15%.

Together, they give you the ceiling for efficient spend.

Example LinkedIn Ads budget calculation

Suppose your ICP is 6,400 senior marketing leaders at 201–500 employee companies.

• Audience size: 6400
• Penetration: 65%
• Frequency: 9/month
• CPM: $125

Reusing the formula from above:

Budget = (Audience size × Penetration × Frequency ÷ 1000) × CPM

This is how the math looks like:

6400 x 65% = 4160 reachable audience

4,160 × 9 = 37,440 impressions/month

37,440 ÷ 1000 × $125 = $4,680/month

That’s your efficient ceiling. Anything below that and you’re under-penetrating. Anything above, and you’re over-saturating.

Now that you have your monthly budget, you can then divide this by 30 to get your daily budget.

Where I've seen budgets break with LinkedIn Ads

So if the math is simple, why do campaigns fail? Usually because of one of these:

• Audience is too small: LinkedIn can’t spend efficiently.
• Audience is saturated: CPMs climb and CTRs fall.
• Creative fatigue sets in: Impressions keep serving, but nobody clicks.
• Leadership pushes budget beyond the ceiling: More money spent, worse results.

This is why “how much should I spend?” is about diagnosing where the spend is leaking.

Even when the model looks fine, reality bites:

• CPM spikes unexpectedly: Competitors pile into the same audience, or CTR slips, and LinkedIn raises your cost.
• High frequency, low CTR: Your ads are over serving. The audience sees you, but they’re bored.
• Decent CTR, no pipeline: Clickers are the wrong audience, or your offers are mismatched.

Each of these has a fix, usually creative refreshes, campaign segmentation, or tighter exclusions. But the point is: these are the real-world traps where “just spend more” doesn’t work.

These are also common reasons why LinkedIn ads is not a set it and forget it kind of a channel. It requires constant monitoring, week-on-week, and month-on-month trend comparisons.

Benchmarks I keep in my head

• 50% penetration is healthy; 70%+ is rare.
• 8–12 impressions/month is the sweet spot.
• Creative should refresh based on performance of each creative and not the typical 4–6 weeks that everyone preaches. Typically, I like to make sure:
  • Image ads get at least 0.4% CTR
  • Video ads get at least 1.5% completion rate
  • Thought leader ads get at least 10% engagement:clicks to landing page
  • Conversation ads get 50% open rate and 2% in click-to-open rate
  • Frequency for each creative doesn't exceed 3 in the last 30 days

So, what’s the ideal LinkedIn Ads budget in 2025?

If you already have healthy traffic, start with $1,000/month on retargeting. You can see ROI quickly because you’re reinforcing existing demand.

If LinkedIn is your primary demand channel, plan for $5,000/month for at least 3–4 months. That gives you the space to run cold campaigns, collect enough data, and build effective retargeting layers.

If you’re looking to find your exact budget number for LinkedIn Ads, calculate your ceiling using the four-lever formula.

Budget = (Audience size × Penetration × Frequency ÷ 1000) × CPM

Yes, the important part is finding the number. But it’s also being able to show your leadership team the logic behind it.

Because credibility doesn’t come from saying “we need to spend $20K”. It comes from proving you understand the mechanics of LinkedIn’s economy, attention, competition, and price, and that you’re not guessing.