If you’re in a niche industry like SaaS, your business has a unique set of needs. It takes a thoughtful and strategic marketing approach to yield meaningful results. In this article, we discuss digital marketing for SaaS companies–how businesses can benefit from SaaS Google Ads and some tips to set your campaign up right.
What Is Google Ads?
Before we explore tips for SaaS advertising, let’s examine what Google Ads really is. It’s a form of paid online advertising that places your business in high-value locations on the web. It’s a great way to boost your brand’s visibility and generate more sales by driving traffic to your business via Google.
Google Ads operates under a pay-per-click (PPC) model. That means marketers compete for keywords by making bids, competing with other brands also targeting that same keyword. The bids you make are maximum bids, meaning the most you’re willing to pay for an ad. You can either manually file bids, or set up a daily budget to keep track of how much you’re spending. For bids, you have three options.
- Cost per click (CPC)– How much you pay when a user clicks on your ad
- Cost per mille (CPM)– How much you pay per 1000 impressions
- Cost per engagement (CPE)– How much you pay when a user performs a specific task on your ad (signs up with their email, watches a video)
Quality Score and Ad Rank
Your bid is combined with something called a Quality Score. This is essentially an assessment of your ads keywords and landing pages. A higher quality ad leads to a better Quality Score, and a better Quality Score means lower ad prices and better ad positions.
Your Quality Score combined with your bid amount creates your Ad Rank—the position your ad will appear in the search results page. When a user clicks on your ad, your brand pays Google a small fee (hence the CPC model). This makes it a high ROI for many businesses because they’re only paying for what they get: measurable results.
How can a SaaS Business Benefit from Google Ads?
Let’s look at all the key ways that Google Ads can help your SaaS business.
Due to Google’s massive consumer base, you have a bigger reach. By getting your ads placed in front of your target customers, you increase your chances at converting. With the right strategy these ads have good chance of generating high quality leads for your business.
Google Ads is that it’s capable of targeting customers based on a variety of different characteristics, sending your ad to the most likely consumer to buy your product. It also has the ability to target different devices, such as mobile or tablet.
Decreasing Cost Per Acquisition (CPA)
Companies pay less per customer when they’re building out an ad campaign with Google. Their pay-per-click model keeps CPA costs down while generating more customers.
Increasing Brand Awareness
Higher search rankings and targeted ads means enhanced reach and awareness for your business. You’re able to connect with more consumers and build your brand’s visibility.
How to Use SaaS Google Ads Like a Pro
SaaS Google Ads Strategy Insight #1: Set Your Goals
Before you get into the details of your SaaS ads campaign, it’s important to set out clear objectives and identify key metrics in advance. Maybe you want to focus on generating leads, or increasing sales. You could focus on increasing site traffic, or boosting brand awareness. By setting your goals early you can more easily create benchmarks along the way to ensure your campaign is on the right track.
SaaS Google Ads Strategy Insight #2: Get to Know Your SaaS Metrics
Before you commit a huge chunk of your budget to your marketing campaign, calculate how much you’re able—and willing—to pay for each lead. To do that, you’ll want to get familiar with some key metrics. Here are some of the big ones:
Your churn rate is essentially the percentage of users who stopped using your service during a certain time frame. Here’s an example of calculating churn:
Say you had 300 users at the start of the month and only 270 at the end. Due to the 30 people that left, your churn rate for that month would be 10%.
Businesses want to keep this value low, because it means you’re able to retain customers which increases their value.
Customer Lifetime Value (CLV)
Customer lifetime value is basically what a customer is worth to your business over the course of their lifetime. For instance, if your monthly SaaS tool costs $20, and customers stay on for an average of 10 months, your customer lifetime value would be $200. It’s really a way to understand how much customers are contributing to your business over time.
Customer Acquisition Cost (CAC)
This is a metric that identifies how much you’re spending to acquire a customer. Here is the calculation:
Sales costs + Marketing costs / Newly acquired customers
Ideally, you want to keep your CAC lower than the customer’s LTV. Both metrics shed light on your Google Ads campaign.
Months to Recover CAC
As the name suggests, this metric tells you how many months it takes your business to recover your CAC. If your CAC is $20, and your service is $5/month, it would take 4 months to recover CAC. The benchmark for most SaaS companies is 12 months to recover CAC.
Qualified Marketing Traffic
Qualified marketing traffic refers to the people and visitors of your ads and website that are likely to convert into customers in the future. It’s basically a measure of how many potential buyers have been interacting with your business recently. Calculate it by:
Number of people who become leads / Total number of visitors
This is the holy grail metric of digital marketing: the conversion rate. There are a variety of best practices that go into optimizing the conversion rate, and it takes constant refinement to perfect your ad’s conversion. Measure it by:
Total number of conversions / Total number of interactions
SaaS Google Ads Strategy Insight #3: Use Automated and Manual Bidding Wisely
When it comes to managing your Google Ads campaign, there are two routes you can take. You can either manually oversee your bids and keywords, or automate the task and have an AI do it for you. Let’s explore each one.
1. Manual Bidding
Manual bidding requires patience, effort, and time to see an ROI. Businesses usually rely on past experience, intuition, and keyword analysis to guide their decisions. Manual bidding is best for brands that:
- Have small budgets
- Have limited customer data
- Want more control over their campaign
- Have more time
2. Automated Bidding
Now let’s look at automated bidding, also known as smart bidding. It’s an AI-led keyword bidding strategy that uses algorithms to optimize bids according to your PPC campaign goals.
Automated bidding is good because it has versatile segmentation–the ability to create and target custom audiences. You can also free up time to do other high-value tasks since the AI is taking care of your PPC strategy.
There are two key bidding strategies:
- Maximize clicks- This aims at getting as many clicks as possible within your budget.
- Maximize conversions– This focuses on generating as many relevant results as possible (email sign-ups, leads, sales).
Maximize clicks is best for brands who don’t have as much data about conversion rates, while maximizing conversions is better when you have enough data. Try to maximize conversions with the TCPA setting (target cost-per-action). This allows you to set a target price per desired action, such as new lead or conversion, ultimately keeping your costs down.
SaaS Google Ads Strategy Insight #4: Be Smart About Audience Targeting
In-Market Audience Segments
These are audience segments that Google creates for you. It targets potential consumers who have recently searched for or interacted with something related to your service.
Google takes into account recently clicked on ads and conversions, as well as website visits and the content, frequency, and recency of those visits. It then categorizes these users based on their likelihood of purchasing, and then targets your ads based on that ranking.
This is great for CAC, as it targets only the most likely candidates for your service. That means more of them convert using less of your budget, hence a lower CAC.
Custom Intent Audiences
Another versatile option for audience targeting is custom intent audiences. These allow you to create a highly specific consumer profile that fits your service. You can take into account a wide range of variables, such as geography, gender, income range, search history, interests, and behaviours. It’s a robust tool that allows you to make a unique class of audience that directly aligns with your service.
SaaS Advertising on Google Ads Should Be a Game-Changer
SaaS Google Ads has the potential to widen your brand’s reach, boost traffic to your site, and increase conversions. Google provides all the tools you need to get there–the key is knowing how to use them. That’s why you should consider working with PPC experts like Marketify.
Marketify is a small agency made of marketers who not only have extensive experience running successful paid campaigns but also once worked for Google giving them deep insight and knowledge about what works and how to best leverage your budget.
If you want a team that provides individualized attention and thrives on creating custom campaigns that can help you reach your goals–whatever they may be–the answer is Marketify.