The Breakeven Formula — Start Here
Before choosing CPC or CPM, calculate your breakeven CTR. This is the CTR at which CPM bidding produces the same effective CPC as CPC bidding. Above that threshold, CPM is cheaper per click.
Example: $35 CPM ÷ (0.7% × 1,000) = $5.00 effective CPC
Example: $35 CPM ÷ (0.4% × 1,000) = $8.75 effective CPC
Example: $40 CPM ÷ (0.5% × 1,000) = $8.00 effective CPC
Breakeven CTR = CPM ÷ (target CPC × 1,000)
Example: $35 CPM ÷ ($7 CPC × 1,000) = 0.5% breakeven CTR
If your current CTR is above your breakeven CTR, switch to CPM. If it's below, stay on CPC. Run the calculation with your own CPM and target CPC before making a decision.
CPC vs CPM — Head to Head Comparison
| Factor | CPC (Cost Per Click) | CPM (Cost Per 1,000 Impressions) |
|---|---|---|
| What you pay for | Each click | Every 1,000 impressions, regardless of clicks |
| Risk profile | Lower risk — no clicks, no spend | Higher risk — pay even with 0% CTR |
| Best when CTR is | Unknown or below 0.5% | Proven at 0.5%+ with tested creative |
| Cost efficiency at high CTR | Average | Better |
| Cost efficiency at low CTR | Better | Worse |
| Campaign objective fit | Direct response, lead gen | Awareness, content promotion, retargeting |
| Budget predictability | High | Medium |
| LinkedIn's default | Yes — default for most campaign types | Must be manually selected |
When to Use CPC — Decision Criteria
Use CPC when:
- You're launching a new campaign with untested creative — CTR is unknown
- Your current CTR is below 0.5% — CPM would be more expensive per click
- Campaign objective is direct response (demo requests, lead gen form)
- Budget is tight and you need cost certainty — CPC caps maximum spend per click
- You're testing multiple audiences or creatives and need comparable cost data
When to Use CPM — Decision Criteria
Use CPM when:
- Your creative has proven CTR above 0.6–0.7% — CPM produces lower effective CPC
- Campaign objective is brand awareness or reach maximisation
- Running retargeting campaigns where audience is warm and CTR will be high
- Promoting Thought Leadership or Document Ads — these formats achieve higher CTR than average
- You want to maximise impressions within a fixed budget regardless of click volume
CPM is particularly efficient for retargeting campaigns. A warm retargeting audience achieves 0.8–1.5% CTR. At $32 CPM and 1% CTR, effective CPC = $3.20 — significantly below LinkedIn's average CPC bid of $5–$8.
Scenario Comparison — $10,000 Monthly Budget
How CPC and CPM bidding perform differently under the same budget with different CTR assumptions:
| Scenario | Bidding Model | CTR | CPM / CPC | Clicks from $10k | Effective CPC | Verdict |
|---|---|---|---|---|---|---|
| New campaign, unproven creative | CPC | Unknown | $7 CPC | 1,429 | $7.00 | Use CPC |
| Proven creative, CTR 0.4% | CPM | 0.4% | $35 CPM | 1,143 | $8.75 | CPC better |
| Proven creative, CTR 0.7% | CPM | 0.7% | $35 CPM | 2,000 | $5.00 | CPM better |
| Retargeting, CTR 1.0% | CPM | 1.0% | $32 CPM | 3,125 | $3.20 | CPM clearly better |
| Awareness campaign | CPM | 0.3% | $30 CPM | 1,000 | $10.00 | Impressions are the goal |
How Bidding Model Affects CPM and CTR Over Time
LinkedIn's relevance score adjusts delivery based on engagement signals. This creates a compounding dynamic that most advertisers miss.
On CPM bidding, high CTR improves your relevance score — which reduces your CPM over time. A campaign starting at $38 CPM with 0.8% CTR may settle at $28 CPM after 3–4 weeks as LinkedIn rewards the engagement signal. This means CPM bidding with proven creative gets cheaper over time, not more expensive.
On CPC bidding, your cost per click is set by auction dynamics and doesn't benefit from the same relevance feedback loop in the same way. CPC is more stable but doesn't compound the same efficiency gains.
→ See the full CPM mechanics: LinkedIn CPM benchmarks and targeting breakdown →
Calculate your LinkedIn breakeven CTR
Use the CPM calculator to find your effective CPC at different CTR levels — then decide which bidding model makes sense.
Research LinkedIn keyword opportunities with Mangools →Frequently Asked Questions
Should I use CPC or CPM for LinkedIn Ads?
Use CPC for new campaigns with unproven creative. Use CPM when your CTR is above 0.5–0.6% — at that point CPM produces a lower effective CPC. Calculate the breakeven: CPM ÷ (CTR × 1,000) = effective CPC. Compare this against LinkedIn's suggested CPC bid to decide.
Which is cheaper — LinkedIn CPC or CPM?
It depends entirely on your CTR. At average CTR (0.44%), CPM and CPC produce similar effective cost per click. CPM becomes cheaper than CPC when CTR exceeds roughly 0.5–0.6%. CPM becomes more expensive than CPC when CTR falls below 0.3–0.4%. Run the formula with your actual numbers before deciding.
What is LinkedIn's default bidding model?
LinkedIn defaults to Maximum Delivery (automated bidding) for most campaign types, which operates similarly to CPC for direct response objectives. Manual CPC bidding is available for all campaign types. CPM must be manually selected and is most accessible in Awareness and Website Visits objectives.