Solved: Improve LinkedIn Ad Targeting (The Secret Sauce Inside)

Hi there,

Thanks for reaching out! Happy to give you some initial thoughts on your LinkedIn ads problem. I've had a look at what you've said, and honestly, I think you might be focusing on the wrong thing. It's a super common trap to fall into, so don't worry.

The problem isn't that you lack specific location data. The real issue, and what's probably holding you back from getting results with your budget, is that focusing on geography is one of the least effective ways to find high-value B2B customers on a professional network like LinkedIn. We need to completely reframe how you think about targeting, moving away from *where* your customers are and focusing intensely on *who* they are and what keeps them up at night. Let's get into it.

We'll need to look at why location targeting is a trap...

Right, let's get this out of the way first. Thinking you need granular location data to succeed on LinkedIn is probably the biggest myth in B2B advertising. It comes from experience with platforms like Google Search, where "plumber near me" is a high-intent search, or Facebook, where you might target local consumers for a restaurant. LinkedIn is a different beast entirely.

Think about it. You're not selling pizza. You're selling a professional solution to a professional problem. Does the Head of Engineering at a 100-person tech company in Manchester have a fundamentally different professional problem than her counterpart in Bristol? Unlikely. They both worry about developer churn, hitting roadmap deadlines, and managing technical debt. Their professional identity—their job title, the industry their comapny is in, the tools they use—is a million times more relevant than their office's postcode.

When you prioritise location, you're telling the algorithm to find people based on a very weak signal. This often leads to a few bad outcomes:

• You shrink your potential audience massively. By insisting on targeting only specific cities, you might exclude thousands of perfect-fit customers who happen to work remotely or in a different location you hadn't considered.
• You pay more for what you get. Because you're adding a restrictive layer, you can sometimes increase your CPMs (cost per thousand impressions) without actually improving the quality of the audience.
• You miss the entire point of the platform. LinkedIn's unique power isn't its map; it's its org chart. It's the only platform where you can reliably target a "VP of Marketing" at "SaaS companies with 50-200 employees" who is a member of the "SaaS Growth Hacks" group. That is incredibly specific and powerful information. Their city is, at best, an afterthought.

  I remember one B2B software client we worked with. They were adamant about only targeting London, convinced that's where all their 'big' clients were. Their Cost Per Lead (CPL) was hovering around £150. We convinced them to run a test. We stripped out the location targeting entirely and instead went nationwide in the UK, but doubled down on getting the job seniority and industry targeting absolutely perfect. Their CPL dropped to £45 within two weeks. Why? Because we massively expanded the pool of relevant people and let the algorithm find the most engaged decision-makers, regardless of where their office was. The focus shifted from geography to psychography—the professional's mindset and challenges.

  I'd say you need to define your customer by their nightmare...

  So, if we're not starting with location, where do we start? We start with pain. Forget the sterile, demographic-based profile your last marketing hire made. "Companies in the finance sector with 50-200 employees" tells you nothing of value and leads to generic ads that speak to no one. To stop burning cash, you must define your customer by their specific, urgent, expensive, career-threatening nightmare.

  Your Ideal Customer Profile (ICP) isn't a person; it's a problem state. You need to become an obsessive expert in that problem.

  Your Head of Sales client isn't just a job title; she's a leader staring at a sales forecast that's 30% below target for the quarter, terrified she's going to have to explain that failure to the board. Your Head of IT client isn't just looking for 'cybersecurity solutions'; he's haunted by the memory of reading about a competitor's data breach and knows his own systems are just as vulnerable, putting his job on the line.

  When you understand the nightmare, everything else falls into place. Your targeting becomes clearer, your ad copy writes itself, and your offer becomes irresistible. This isn't just fluffy theory; it's the practical foundation of every successful B2B campaign we've ever run. Campaigns that fail almost always do so because they're selling a feature to a demographic, not a solution to a nightmare.

  Here's a simple process to start defining this properly. Instead of just filling out a spreadsheet with job titles, you need to map out the entire problem ecosystem.

  Step 1: The Role

  Who are they by job title?
  e.g., Head of Sales, CTO, Finance Director.

  →

  Step 2: The Nightmare

  What is their urgent, expensive problem?
  e.g., "My best reps are leaving," "We're vulnerable to a data breach."

  →

  Step 3: The Consequence

  What's the career/business risk?
  e.g., "I'll miss my quota," "The company faces massive fines."

  →

  Step 4: The 'Watering Holes'

  Where do they go for information?
  e.g., Specific podcasts, newsletters, industry groups.

  
  

  Once you've done this work, your targeting strategy on LinkedIn becomes obvious. You're not looking for people in a certain city; you're looking for the job titles who experience the nightmare, at the companies where that nightmare is most acute (based on industry or size), who signal their interests by joining specific groups or listing certain skills on their profile. This is the blueprint for your entire campaign.

  You probably should focus on these targeting levers instead...

  Right, so we've established that you need to target the *person*, not the place. So what are the tools for that job inside LinkedIn Campaign Manager? This is where the platform's real power lies. Forgetting location frees up your mental energy (and budget) to focus on the layers that actually predict buying intent.

  Here’s how I'd prioritise my targeting layers, from most to least important for most B2B offers. Notice where location sits.

  Relative Impact of LinkedIn Targeting Levers on B2B Lead Quality

  Job Title

  Critical

  Company Size

  Very High

  Industry

  Very High

  Seniority

  High

  Group Membership

  Medium

  Skills

  Medium

  Location

  Low

  
  

  Let’s break this down:

  1. Job Title & Seniority: This is your bread and butter. You have to get this right. Are you selling to the C-suite, VPs, Directors, or Managers? Be specific. Don't just target "Marketing"; target "Head of Demand Generation," "VP of Marketing," "Marketing Director." This ensures your message about solving a specific nightmare is hitting the exact person who feels that pain.
  2. Company Attributes (Size & Industry): This is your next most important filter. A solution for a 50-person startup is often very different from one for a 5,000-person enterprise. Likewise, the pain points in the 'Financial Services' industry are different from 'Hospitality'. Use these to ensure your solution is relevant to the company's context.
  3. Skills & Group Memberships: These are brilliant for refining your audience and finding highly engaged people. Does your ideal customer need to know 'AWS' or 'Salesforce'? Target those skills. Are they likely to be a member of a group like 'Fintech Professionals'? Target that group. This is how you find the hyper-engaged people within your broader ICP.
  4. Location: And finally, we get to location. Use this broadly. Target entire countries (e.g., United Kingdom, United States) or large economic regions (e.g., EMEA). The only time to get more specific is if you have a genuine, hard operational constraint, like you physically need to be on-site and only serve a specific county. For 99% of B2B SaaS and service businesses, this isn't the case. Cast a wide geographic net and let the professional targeting layers do the heavy lifting.

  One campaign we worked on for a software client targeted B2B decision makers. We found that a combination of specific job seniorities (Director and above) and a curated list of target industries brought us leads for around $22 each. When we tried to layer on specific city-level targeting, the cost jumped to over $50 and the volume dried up. The data is clear: on LinkedIn, professional identity trumps physical location every single time.

  You'll need to understand what a customer is actually worth...

  The phrase "limited advertising budget" tells me something important. It suggests you're operating from a position of fear, trying to minimise costs at all costs. This is a natural instinct, but it's also the fastest way to guarantee your campaigns fail. The real question isn't "How low can my Cost Per Lead go?" but "How high a CPL can I *afford* to acquire a truly great customer?"

  The answer lies in its counterpart: Customer Lifetime Value (LTV). Once you know what a customer is truly worth to your business in profit over their entire relationship with you, you stop thinking about ad spend as a cost and start seeing it as an investment. It liberates you to be more aggressive and intelligent with your budget.

  Let's do the maths. It's simpler than you think.

  • Average Revenue Per Account (ARPA): What do you make per customer, per month/year?
  • Gross Margin %: What's your profit margin on that revenue after deducting the costs of servicing them?
  • Monthly Churn Rate %: What percentage of customers do you lose each month? (If you measure annually, just divide by 12).

  The calculation is: LTV = (ARPA * Gross Margin %) / Monthly Churn Rate

  This number is the absolute foundation of a scalable ad strategy. Let’s take an example. A SaaS business with an ARPA of £200, a gross margin of 75%, and a monthly churn of 5%. Their LTV would be (£200 * 0.75) / 0.05 = £3,000.

  Now, a healthy business model often aims for a 3:1 LTV to Customer Acquisition Cost (CAC) ratio. This means for a customer worth £3,000, you can afford to spend up to £1,000 to acquire them. If your sales process converts 1 in 10 qualified leads into a paying customer, you can afford to pay up to £100 per qualified lead. Suddenly, that £45 CPL we got for our other client doesn't seem like a cost; it looks like an absolute bargain, printing money.

  Use the calculator below to get a feel for your own numbers. Play around with the sliders. See how a small decrease in churn or an increase in revenue can dramatically increase the amount you can afford to spend on ads. This is the maths that unlocks growth.

  Average Monthly Revenue Per Account (ARPA): £500

  Gross Margin: 80%

  Monthly Churn Rate: 4.0%

  Customer Lifetime Value (LTV) £10,000

  Affordable CAC (at 3:1 ratio) £3,333

  
  

  You'll need a message they can't ignore...

  Once you know who you’re talking to (your ICP based on their nightmare) and what they're worth (your LTV), you can craft an ad message that actually resonates. Generic ads fail because they try to speak to everyone and end up speaking to no one. Your ad's only job is to stop the scroll for one specific person with one specific prbolem.

  The best way to do this is to use a proven copywriting framework that speaks directly to their pain. For B2B, the most effective is often Problem-Agitate-Solve (PAS).

  You don't sell "fractional CFO services"; you sell a good night's sleep to a founder who's terrified of running out of money. Here's how it works:

  😢

  Problem

  State the 'nightmare' directly and concisely. Use the language they use to describe it to themselves.

  "Are your cash flow projections just a shot in the dark?"

  🔥

  Agitate

  Twist the knife. Remind them of the negative consequences and emotional stakes of not solving the problem.

  "Are you one bad month away from a payroll crisis while your competitors are confidently raising their next round?"

  🛡

  Solve

  Introduce your solution as the clear, simple, and direct path out of their pain.

  "Get expert financial strategy for a fraction of a full-time hire. We build dashboards that turn uncertainty into predictable growth."

  
  

  This structure works because it follows a natural psychological path. It first confirms that you understand the prospect's world ('Problem'), then raises the stakes to create urgency ('Agitate'), and finally offers relief ('Solve'). This is so much more effective than a bland, feature-led ad like "We offer outsourced accounting services." No one wakes up in the morning excited to buy "outsourced accounting services." They wake up worried about making payroll.

  Your ad creative (the image or video) should do the same. It needs to reflect the 'nightmare' state or the 'solved' state. A screenshot of a confusing spreadsheet for the 'Problem', or a clean, simple dashboard for the 'Solve'. The creative and copy must work together to tell the same story.

  And finally, you must delete the "Request a Demo" button...

  Now we arrive at the most common failure point in all of B2B advertising: the offer. I can almost guarantee your current Call to Action (CTA) is something like "Learn More," "Contact Us," or the dreaded "Request a Demo."

  The "Request a Demo" button is perhaps the most arrogant CTA ever conceived. It presumes your prospect, a busy decision-maker, has nothing better to do than book a 30-minute meeting to be sold to. It is high-friction, low-value, and instantly positions you as a commoditised vendor, just another person asking for their time.

  Your offer’s only job is to deliver a moment of undeniable value—an "aha!" moment that makes the prospect sell themselves on your solution. You must solve a small, real problem for free to earn the right to solve their whole problem for money.

  What does this look like in practice? It depends on your business, but the principle is the same: give value before you ask for a sales call.

  • For a SaaS Company: This is your unfair advantage. The gold standard is a free trial (no credit card) or a freemium plan. Let them use the actual product. Let them feel the transformation. A user who has already solved a small problem with your software is a Product Qualified Lead (PQL), and they are infinitely more valuable than a lead who just filled out a form.
  • For an Agency/Consultancy: Bottle your expertise. Don't just say you're an expert; prove it. Offer a free, automated audit tool that diagnoses a specific problem (like an SEO audit). Host a live, 30-minute workshop on a very niche topic. For us, it’s a free 20-minute strategy session where we audit failing ad campaigns. We provide real value, for free, which builds immense trust.
  • For a High-Ticket Service: Create a high-value content asset. Not another fluffy ebook. A detailed, step-by-step guide, a spreadsheet template with built-in formulas, a benchmark report with industry data they can't get elsewhere. Something they would happily pay for, but you're giving it away in exchange for their contact details and attention.

  The goal is to change the dynamic from "Can I have 30 minutes of your time to sell you something?" to "Here is something incredibly valuable for free that will help you right now." When you do that, the subsequent sales call becomes a collaborative discussion about a full implementation, not a cold pitch.

  This is the main advice I have for you:

  Area of Focus	Current Approach (The Trap)	Recommended Action (The Solution)
  Targeting Philosophy	Trying to find specific professional audiences using geographic data.	Abandon location as a primary targeting lever. Focus entirely on professional attributes: Job Title, Seniority, Company Industry, and Company Size. Use location targeting for whole countries only.
  Customer Definition	Defined by broad demographics (e.g., "companies in London").	Redefine your Ideal Customer Profile (ICP) around their specific, urgent, and expensive 'nightmare' problem. Know their pain better than they do.
  Budgeting Mindset	Operating from a "limited budget" scarcity mindset, focused on minimising Cost Per Lead.	Calculate your Customer Lifetime Value (LTV) to understand the maximum you can afford to pay per lead. Shift from a cost-centre to an investment-centre mindset.
  Ad Copywriting	Likely focused on features and what your company does.	Rewrite all ad copy using the Problem-Agitate-Solve (PAS) framework. Lead with their pain, not your solution's features.
  The Offer / CTA	Using high-friction, low-value CTAs like "Request a Demo" or "Contact Us".	Create a low-friction, high-value offer that solves a small piece of their problem for free (e.g., a free tool, a workshop, a valuable content asset, a free trial). Earn the right to a sales call.

  I know this is a lot to take in, and it's a fundamental shift from how most people approach LinkedIn Ads. It moves you from just 'doing ads' to building a proper, scalable customer acquisition system. It's not easy, and it requires a deep understanding of markering psychology, data analysis, and the nuances of the ad platform itself. The difference between a campaign that breaks even and one that drives significant growth often comes down to this kind of strategic depth and executional excellence.

  This is where getting expert help can make all the difference. Instead of spending your limited budget on trial and error, you can work with someone who has already made the mistakes, run hundreds of tests, and knows the playbook for your exact situation.

  If you'd like to go through this in more detail and apply it specifically to your business, we offer a completely free, no-obligation 20-minute strategy consultation. We can look at your current setup, your ICP, and your offer, and give you a few more concrete, actionable ideas you can implement right away.

  Regards,

  Team @ Lukas Holschuh