Google Ads for SaaS Companies
Not every Google Ads management strategy works for a SaaS product. Google Ads play an important role for acquiring new customers for approximately 85 percent of the top 100 SaaS companies. Google Ads are responsible for a significant portion of their lead generation efforts (MQL, SQL). Managing Google Ads for SaaS can quickly turn into a capital-intensive disaster if you aren’t familiar with the best practices of Google Ads for SaaS startups effectively.
Purchasing advertising space for software as a service (SaaS) can seem overwhelming. The majority of software-related keywords have high cost-per-click (CPC) bids, reaching up to $100 in some cases. Competition for each customer is fierce, with five, ten, or fifty businesses vying for their attention.
With limited resources and little information about the value of each user, it can seem impossible for a SaaS startup with limited data to launch and optimize a profitable Google advertising campaign.
Google Ads campaigns require an initial investment, just like any other advertising platform. You’ll spend more money on each user in the beginning than you will after several months of optimization. As a result, you may even incur a loss on each customer acquired at the outset of your campaign.
Google Ads, on the other hand, can develop into an extremely effective customer acquisition tool for your SaaS startup if used properly over time if properly managed and optimized. It is possible to bring in thousands of new users per day at a cost per acquisition that is extremely profitable for your startup with the right targeting, bidding, and optimization.
Is Google Ads a Part of Your SaaS Business Strategy?
In the early stages of your SaaS startup, it’s all too easy to dismiss Google Ads Management as “too expensive,” especially if your software is reasonably priced. Customers can be attracted, valuable brand exposure can be earned, and a consistent stream of leads can be generated at a very low cost if the right strategy is implemented.
AdWords is a powerful tool for acquiring new trial users and paying customers for SaaS businesses. If this is the case, try some of the techniques listed below to get your campaign off the ground. Results can be spectacular when the right keywords, ad creative and bidding strategy are used in conjunction with one another.
Incorporating these strategies, we have assisted our SaaS clients in breaking through the high Google Ads cost per click (CPC) barrier and generating profitable leads and loyal customers for their SaaS startup, which has resulted in the following outcomes:
• Increased monthly sales qualified leads by 40%
• Increased Marketing Qualified Leads (MQLs) by 62%
• Reduced cost per customer acquisition (CAC) by 35%
Calculate Return On Advertising Spending (ROAS) Using CLV, Not CPC
Prior to launching any paid acquisition strategy, whether it’s Google Ads, Facebook Ads, or LinkedIn Ads, it’s critical to understand your SaaS metrics.
It’s mind-boggling how many SaaS companies we speak with each week that want to scale their paid acquisition efforts but are unable to answer questions such as:
• “What is your target cost per acquisition (TCPA)?” Or, in other words, “How much can you afford to pay to acquire a customer while still remaining profitable?”
• “What is the average customer lifetime value (LTV)?”
• “How long does your current payback period last?”
It’s difficult not to wince when you see Google’s suggested bids for SaaS keywords. While the average cost per click for the majority of SaaS keywords appears to be high in comparison to the monthly cost of SaaS products, it’s critical to keep things in perspective when calculating return on ad spend.
If you sell a SaaS product for $51 per month and the cost of acquiring a paying customer is $300, it’s tempting to declare the campaign a failure. However, the correct way to evaluate the return on investment (ROI) of a SaaS product is to look at the customer’s lifetime value (CLV).
The majority of SaaS products have a churn rate of between 1 and 5%. This means that approximately one in every twenty to one hundred customers cancels their subscription each month.
If your average churn rate is 5%, you can estimate a new customer’s average lifespan to be around 20 months. On average, each new customer you acquire is worth $1020. From this vantage point, the $20 suggested CPC bids returned by Google’s Keyword Planner appear less expensive.
Rather than focusing exclusively on high CPC bids, compare the cost of advertising your SaaS product to the revenue you can expect from each customer. Once you begin calculating ROI using CLV rather than CPC, you’ll notice that even the most difficult Google Ads campaign keywords aren’t as expensive as they appear.
Utilize the Google Display Network and Video Advertisements
It’s natural to be taken aback when using the Google Ads Keyword Planner to find your target keywords. Popular Google Ads management SaaS keywords generate massive CPC bids, frequently exceeding $100 per click.
Before you abandon your campaign concepts, keep in mind that these suggested bids are for Google search traffic. By advertising on the Google Display Network, you can reach a comparable audience at a fraction of the cost per click (CPC) that a search network campaign would cost.
There are a number of advantages to using the Google Display Network rather than the Google Search Network over the latter. Because it is made up of millions of websites, it has the potential to reach a large number of people with your campaign. It is possible to reach potential customers through an extensive range of websites if your SaaS software is designed to appeal to a large number of people.
Furthermore, it is significantly more cost-effective than the alternative. In contrast to the Search Network, where the average AdWords CPC ranges between $1 and $2, the average AdWords CPC on the Display Network is less than $1.
Additionally, the GDN has a few flaws. Due to the fact that display advertising is a numbers game, you will not achieve the same conversion rate as with search advertising. Around 86 percent of people who view your ads will not notice them, which means you’ll need many more impressions to achieve the same conversion rate as a small search campaign.
Another factor to consider when it comes to video and display advertising is whether your target audience visits websites that partner with Google to display ads.
The GDN’s greatest strength is that it provides you with massive exposure at a low cost. Rather than bidding high on search ads to reach a highly targeted audience, you’ll reach a broad audience, some of whom will remember your brand and others who will convert.
Utilize video advertisements to achieve the greatest impact at the lowest cost. This way, you can promote your brand to both customers and noncustomers without paying a premium for each search network impression.
Utilize Audiences as a Metric for Your Campaigns
In-market audiences enable advertisers to reach consumers who are actively researching or comparing products and services on Google Display Network publisher and partner sites, as well as on YouTube. They can help you achieve incremental conversions by connecting with consumers just before they make a purchase decision.
Similar to remarketing lists, these can be used as a targeting or observation setting in your search campaigns.
For instance, individuals in the “Business & Productivity Software” in-market segment are interested in purchasing software that includes business applications such as word processing, spreadsheet, presentation, or dictation.
If we added this in-market audience to the “targeting” list, Google would only display ads to users who fall into that category, significantly limiting your reach.
If we add this audience as an “observation,” Google Ads will begin providing us with insights into all click, conversion, and engagement metrics, but will continue to show our ads to users who do not fit this audience.
We recommend beginning with observation. With time, you’ll be able to determine which in-market audiences perform well or poorly. Armed with these insights, you can now decide whether to increase or decrease bids OR to completely exclude an in-market audience. It will eventually assist you in lowering your CAC.
We strongly advise you to include in-market audiences. You may discover that your customers have additional interests, such as “Home & Garden,” “Real Estate,” or “Travel.” We frequently encounter audiences with high conversion rates that defy logic, but as is always the case with performance marketing, the data does not lie!
Gmail Ads to Target the Customers of Your Competitors
Gmail Ads are extremely effective at putting your message directly in front of your target audience.
No audience is more valuable to a SaaS startup than your competitors’ customers. With Gmail Ads, you can limit your Google Ads campaigns to only those who receive emails from your competitors, providing you with direct access to those who already use similar products.
This can be accomplished in a variety of ways. One Google Ads Management for SaaS strategy, which we previously discussed, is to focus on keywords that your competitors are likely to use. Subscribe to your competitors’ email lists and take note of any words or phrases they frequently use; then incorporate them into your target keywords. A more precise solution is to target the domains of your competitors.
By utilizing Gmail Ads, you can reach the same audience as a search engine marketing campaign at a fraction of the cost.
Utilize Audiences that are Similar to Your Current Audience to Broaden Your Reach
Two factors may impede your ability to scale Google Ads campaigns for SaaS companies as quickly as your larger competitors:
1. Your audience is restricted to individuals who have an immediate need for your product.
2. You simply lack the data necessary to scale your operations efficiently and effectively.
One of the most straightforward ways to circumvent these constraints is to scale your campaign using lookalike audiences. If you use a retargeting pixel, targeting similar audiences enables you to market to people who share your website’s browsing habits.
3. By including similar audience targeting in your campaign, Google will conduct a search of your retargeting list for common or similar cookies. Rather than waiting to scale your campaign using keyword or placement data, you can quickly and effectively scale to a similar audience.
4. Select a precise target and then conduct remarketing
If your Google Ads for SaaS top of the funnel targeting is effective, only a small percentage of visitors to your SaaS website will be uninterested in the product. Then retargeting is an excellent strategy for reconnecting with potential customers and putting your brand in front of them.
One method of remarketing is to include an AdWords for SaaS tag on your website, which will advertise to anyone who visits it. This strategy will result in a small number of conversions.
Alternatively, rather than targeting every visitor to your website, you could create a custom audience based on users who have already converted on your site and then exclude them from the retargeting audience. Unlike eCommerce websites, which sell a variety of products, SaaS websites typically sell only one.
This means that targeting website visitors who have already converted is pointless. This way, you’ll avoid wasting money marketing to users who have already paid for your SaaS, leaving you with more funds to spend on reaching motivated potential customers.
Utilize a Search Term Report to Keep Your Blog Current
In the Google Ads search terms report, you will find a list of search terms entered by users that resulted in your ad being displayed or being clicked. Quite frequently, this list will be significantly different from the Google Ads management for SaaS keywords lists you have created.
In general, reviewing these lists on a regular basis aids in the identification of negative keywords as well as new keyword opportunities for use in campaign optimization efforts. Additionally, we recommend that you review your search terms report in order to identify low-intent keywords that are further up the conversion funnel.
For example, you might notice that users are asking a variety of questions about your product. In spite of the fact that these users are not actively looking for a software solution, they may be considered potential customers and are therefore worth engaging with, provided that you have the appropriate strategy in place.
In Google Ads for SaaS, if you can direct these users to an article on your website that addresses their questions and provides value to the user, you’ve effectively established yourself as a thought leader, which naturally leads to the development of trust in your organization. This is a strategy that is based on the principle of “value first.” In the event that someone has read a valuable article, they are much more likely to consider an offer made by your company later on in the process.
Once you’ve done that, you can create audience lists for any users who have visited the blog URLs and include them in a remarketing campaign that directs them down the path to optimized conversion rates.
Focus on Competitor Keywords to Attract New Customers
Within Google Ads, you can use keywords to target competing brand names and products. While competitive keywords are costly, they work. When the lifetime value of a SaaS customer is taken into account, the cost of bidding on competing keywords becomes significantly more manageable. One of our clients obtains 54% of their total conversion volume via competitor terms.
Utilize the “Auction Insights” tool on existing campaigns to determine which competitors you should bid on. The Auction insights report enables you to compare your performance to that of other advertisers participating in similar auctions. Then, using Keyword Planner, conduct a search for your competitors’ terms and associated search volumes.
Google will not permit you to advertise using a competitor’s trademark. Additionally, your ad copy or landing page should never contain any false claims or unfair comparisons.
The simplest way to execute this Google Ads management for SaaS strategy is to bid on the brand name of a competitor, e.g. “competitor name.”
When combined with a landing page that focuses exclusively on the value of your software, this type of keyword can generate a steady stream of trial signups and paying customers for your startup.
When you compare similar products – for example, your reviews and their reviews, or your pricing and their pricing – you force potential customers to choose between your product and their product.
Offer superior value for money, superior features, or a superior reputation, and you’ll attract customers who weren’t actively looking for your business.
Google Advertisements A funnel strategy is one that we use to increase conversion rates and decrease CAC for the SaaS companies that we work for. We use funnels to maximize our ability to move users from awareness to consideration and finally to purchase. Many SaaS companies do not use a funnel structure in Google Ads Management for a variety of reasons, including a lack of budget or knowledge.
According to the data, a prospect user does not complete the desired action on your website upon their first click. It may take several visits, weeks, or even months for them to gather sufficient information and feel prepared to schedule a demo or begin a trial. This information is available in Google Ads via the Attribution Time Lag report, as well as in Google Analytics via the Conversions, Multi-Channel Funnels, and Time Lag reports.
You can create “middle of funnel” campaigns and specifically target these users using audience lists created in either Google Analytics or Google Ads.
Users who have visited a website are significantly more likely to act on the second/third/fourth touch. Individual budgets can be assigned to these middle-of-funnel campaigns. You want to maximize your ad spend on these campaigns and appear every time a previous visitor conducts a Google search. Without segmenting these users, you risk running out of budget for top-of-funnel campaigns.
The messaging in the advertisements can be customized. For instance, the advertisements may contain incentives or limited-time offers to entice the user to act. Increased bids will assist in dominating and securing the top position.
Utilize a Duplicated Campaign Structure
We frequently discover that this is a winning strategy in the B2B space with, particularly high CPCs.
Create and run two identical campaigns, one with [exact match] keywords and the other with broad match keywords.
Broad match campaigns are launched with smaller budgets than exact match campaigns. Their purpose is to assist you in generating new keywords that you may have overlooked while conducting keyword research and building campaigns using the search query report.
The exact match campaign’s strategy is to increase your impression share on the exact traffic you want by allocating larger budgets.
You must split the two campaigns; as otherwise, you will be unable to allocate budgets separately for each keyword match type.
Enhance the Efficiency of Your Google Ads Account
Google Ads has a plethora of fantastic features, but not all of them are applicable to a SaaS company or a SaaS startup. Many of the features offered by Google Ads Management are geared toward eCommerce websites, retailers, direct marketers, and other non-SaaS entities.
Because AdWords is designed for such a diverse range of marketers, it can be challenging to determine what can and does work for you. Here are a few Google Ads features you can bypass to streamline your account and focus exclusively on what works for you:
Campaigns for Shopping
While shopping campaigns are beneficial for retailers, if you only sell one item, you will see no benefit from product ads, therefore you can safely exclude the Shopping ads from your Google Ads management for SaaS.
Updates in Real Time
For SaaS products, real-time updates are largely ineffective. While you can use them to promote your software during a limited-time sale, they are unlikely to yield significant positive results, therefore you can also leave it out from your Google Ads management for SaaS strategies.
Make Extension Calls
If you sell a high-priced SaaS product, call extensions can assist you in contacting prospects and closing deals. At the typical SaaS price point of $49 to $99, however, encouraging customers to call you is not a scalable strategy.
Rather than focusing on extensions, which you can use to optimize your Google Ads campaign once it has begun to generate profitable leads and sales, concentrate on keyword targeting and improving your ad copy during the early stages of your campaign.