Updated 1/18/2022
Did you know that 75% of online shoppers prefer to click on paid search ads? Why? Because it's the fastest way for shoppers to get to the information they are searching for online. PPC (pay-per-click) advertising is one of the fastest ways SaaS companies can create momentum for their products while also building a buyers list at the same time.
PPC for SaaS companies, however, can be tricky to navigate. If you don't know what you're doing, you can kiss your marketing budget goodbye with the wrong targeting or keywords.
But you're not going to make those mistakes. You're here to learn everything you can for campaigns that perform and help meet the goals of your overall SaaS marketing plan.
In this extensive guide, you're going to learn everything you need to know about PPC for SaaS and how you can implement it into your marketing strategies.
Here's what you're going to learn as you read through this guide:
*Why PPC is important or SaaS companies
*The considerable benefits of implementing PPC for SaaS companies
*The questions you need to ask when starting PPC campaigns
*How to determine your PPC budget
*The types of ad networks available
*PPC best practices including landing pages, split testing, conversion and ROI tracking, optimization, and targeting
Ready? Let's dive in.
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What is PPC?
PPC — pay-per-click advertising — is a type of digital advertising where the advertiser only pays a fee when the ad is clicked on by a potential buyer. Most traffic channels offer advertising solutions such as Google Ads, Bing Ads, Facebook Ads, LinkedIn Ads and YouTube Ads.
There are two main PPC categories - SEM and Social - and they work slightly different. For example, with Google and Bing Ads you have search intent, which can help attracat quality traffic. Whereas with social, they're not actively looking for your solution, but may be the right audience.
And while it sounds simple enough, any novice SaaS marketer or SaaS founder who has dabbled in PPC has found out it's a very quick way to lose a lot of money... fast.
Why PPC is important for SaaS companies
Many SaaS companies think of Google when they're considering pay-per-click (PPC) advertising. And while this isn't wrong, there are more options to PPC than just Google ads.
You can run PPC ads on many platforms, including Google and LinkedIn.
And while you might believe that platforms such as LinkedIn or Instagram are more the "paid social" types of ads, they can also come under the PPC umbrella.
As you're developing your marketing plan, it's essential to take a more holistic view of PPC. Think about your target audience... How does your intended PPC marketing strategy impact them throughout your sales funnel? Ideally, the ads should provide a smooth transition through the funnel into a purchasing decision, not an experience that's clunky or disjointed.
By stepping back and taking a more holistic approach, you're able to consider all the available advertising platforms to your SaaS company. This includes PPC and traditional means.
When looking at investing in digital advertising, the questions to ask yourself are:
*How do these ad platforms work together to allow a person to convert into a sale?
*How can we make this process even easier for the rest of our audience?
So what are the long-term benefits?
The significant benefits of implementing PPC for SaaS companies
The benefits of implementing PPC marketing are going to largely depend on what phase your SaaS company is at.
Starting Phase SaaS Company
If you're in this phase, it's likely that you've had to bootstrap your way to this point. Or maybe you've been lucky enough to receive seed funding already. Either way, you're just getting started.
As you begin to build out your SaaS content marketing strategy, utilizing PPC is an excellent option for testing the waters. The great thing about PPC ads is that you can be super specific about whom you're targeting.
This allows you to:
*Test different types of messages
*Try different audience segments
*Expand into other areas
*Become more familiar with different ad platforms
When you're in this early phase, it's best to keep your PPC ads to about 10-15% of your ad budget, maybe even less. Focus on experimenting with your messaging and audiences in the beginning. Once you know that your brand messaging and content connect with your target audience, your advertising will be easier.
Mid to Late Phase SaaS Companies
If you're in this phase, you've already got an established content marketing plan in place and you're likely averaging anywhere from 10s to 100s of thousands of website visitors per month. You're now ready to start looking at other scalable acquisition options. This is where PPC can be a good fit.
Your investors and leadership team will love PPC metrics, but you'll also be able to get specific on the type of people you target with your ads. When you've got an optimized PPC campaign running, you'll be able to:
*Create tracking metrics that provide accurate data to help inform marketing budgets and plans
*Identify and test new markets that your brand can expand into
*Leverage smarter content production
*Identify the best ad network mix for your SaaS company
The questions you need to ask when starting PPC campaigns
When developing your campaigns, whether you're new to them or familiar with them, there are some essential questions you'll need to answer to make sure that you're heading in the right direction.
These questions include:
1. What is the purpose of your ads? This goes beyond simply saying "lead conversions.” The goal should be specific to ensure that you're able to be clear in your targeting.
2. What are the ads optimized for?
3. Do you plan to use branded or unbranded keywords in your targeting?
4. What part of the funnel are you targeting? Top, middle, or bottom?
5. How does the copy you're writing connect to that stage of the sales funnel?
6. What does the buyer's experience look like after they click the ad?
You'll also want to make sure that your PPC ads are conversion-focused versus awareness-focused. By answering these questions, you can get a better understanding of how your target buyer might interact with your ad.
Avoid These Mistakes
Don't forget to segment your PPC campaign! A lot of SaaS companies fail to do this. They believe that by having branded and unbranded keywords, that's enough to segment.
And while that's a good starting point, you'll see better metrics (and ROI) if you segment by dividing keywords between each sales funnel stage (top, middle, and bottom).
By doing this, the advertising platform you're using is then able to optimize for the right audience at the stage they are at. If you only segment by keywords, it will be harder for the advertising platform, like Google, to determine whom to show your ad to. It's also super confusing for your ad viewers.
Here's an example: Let's say your SaaS company sells accounting software to small businesses. You decide you want to create a PPC campaign that targets the keywords "best accounting software" and "how to set up a budget." The first keyword is a bottom of funnel (BoFu) keyword, and the second is a top of the funnel (ToFu) keyword.
The first keyword is more for the searchers who are closer to a buying decision. The second one is more for those who are in the educational stage of the buyer journey. Google is so confused about what you're trying to do that it doesn't display either of these ads.
This is why keyword segmentation is so important based on the funnel stage.
How to determine your PPC budget
Before you dive into running your PPC ads, it's important that you have your budget determined.
Before we get to that, you need to make sure that you understand the difference between the lifetime value (LTV) of the customer versus the initial transaction value of the customer.
It's not just about the ROI of the ad; it’s also about lifetime value.
You need to know what that is for your business before you determine your PPC ads budget.
For example, let's say your ad generates an initial $10 transaction. But if the LTV of your customer is $10,000, it makes sense to pay $1 for one click.
Or, the reverse is the same. If your LTV doesn't go beyond $5, then paying $1 per click will not be scalable long-term.
As a SaaS company with an ongoing subscription, the LTV of your customers will be higher than the initial transaction. Keep this in mind as you dive into calculating your budget.
1. Start by defining your SaaS marketing goals. You can use something like the S.M.A.R.T goals framework. Are you looking to increase leads, sales, something else?
2. What are your traffic generation needs? This is how many clicks do you need to achieve your goal? Listed in point 1?
3. What's your cost-per-click? You can get an estimated one using the Google Keyword Planner tool here. A better metric is to view your previous campaigns, but the keyword planner will be a good starting point if you are just getting started.
Here are the variables you need to run the calculations:
*A goal that determines the number of people you need to convert for ROI
*The average conversion rate (typically between 1% - 5%)
*How many clicks you'll need to get customers (this is the traffic)
*The cost per click (estimated)
*Once you've got those numbers, you can craft your PPC budget.
The calculation is: traffic needed x average cost per click
We also recommend running two calculations so that you have a high and low range option for your budget:
Highest traffic needed x Highest average CPC = Highest total budget
Lowest traffic needed x Lowest average CPC = Lowest total budget
Now you can plan accordingly!
The types of PPC ads available
Digital ads fall under the PPC umbrella. Let's look at what PPC ads are available and which ones work best for SaaS companies.
Google Ads
Google Ads are the most common ad network. It's the default platform that most SaaS companies start with, and for a good reason. Google ads offer many options, and with a large reach, it makes sense to advertise with them.
Search PPC ads
These types of ads are probably the ones you're familiar with. They show up inside a Google search. This allows your business to be displayed on a search engine results page, right in front of your target audience at a time when they are searching for what you're offering. We recommend adding search engine ads into your PPC marketing strategy for this reason.
Display PPC ads
These types of ads are entirely different to search engine ads. Display ads allow you to put your ad right in front of your potential customers without waiting for them to search for you (or the keyword phrase your targeting). This type of ad allows you to be more proactive in the top-of-the-funnel phase, getting people familiar with your product and brand before they even realize they need it. Display ads aren't optimized for intent, and they are optimized to grow brand awareness online.
Display ads show up on various websites that your ideal target customer frequents throughout their day, whether they are searching for your product or not.
We recommend implementing display ads into your marketing strategy once your search engine ads are converting well.
Remarketing and Retargeting
Now that you've done all that work to get people into your funnels, the goal isn't to leave them alone. We want to make sure that you're also taking advantage of marketing strategies like retargeting and remarketing.
The most significant difference between the two is that retargeting is when you retarget a person who has already interacted with your ad or website. On the other hand, remarketing is collecting potential prospects email addresses and then sending them sales-related emails.
Both are effective, and we recommend incorporating them into your marketing plan.
Now that we've covered Google ads, what other platform allows PPC advertising?
Facebook Ads
Facebook Ads can be hit or miss, depending on your industry. Facebook give you the opportunity to set up your ad campaign to match your marketing funnel. For example, ads to your cold audience, warm audience retargeting ads, all with offers that match the phase in their buyers journey.
Facebook Ads work best when you have a customer list to upload and create lookalike audiences to use while layering in your audience targets. Be sure to add detailed UTM tracking to your ads so you can have additional data in Google Analytics.
LinkedIn Ads
LinkedIn PPC Ads are a great place to get in front of your high-end customers. LinkedIn offers both sponsored ads and sponsored stories as part of their pay-per-click options.
Users on LinkedIn trust the platform more than others like Facebook because of the quality of users and advertisers.
This is why we use Google and LinkedIn Ads together, as they offer the most robust results for SaaS companies.
You're nearly ready to dive into creating your campaign. But before you do, let's make sure you've got some best practices in place.
PPC best practices for SaaS companies
As a SaaS company, you’ve likely discovered that your sales cycle is longer, which means that your marketing and advertising need to take a long view. You need multiple touchpoints to convert your leads while also staying top-of-mind in your customer's eyes.
And while PPC ads are going to go a long way to helping you achieve both of those objectives, there are best practices you can implement now to ensure that ALL of your assets work together to support each other through the entire sales funnel process.
#1: Optimize your landing pages
When you start paying for clicks, you want to ensure that every stage of your sales funnel is optimized. This starts with making sure that your landing page speaks to the intent you're optimizing for immediately.
The worst thing that can happen for your campaign is to have your prospect landing your landing page and immediately bounce off your landing page because it either wasn't what they expected or didn’t answer questions or search parameters.
This is why you want to spend a lot of time on developing landing pages that meet the needs of the target audience you're PPC ads are for. Every element on your landing page should help the user get to your call to action and then take whatever action you want them to do.
When you first start running a PPC campaign, the fastest way to figure out what's going to work is to split test everything.
Your ad images. Your ad headlines, copy, landing pages, even the keywords you're targeting.
This process can take 30-60 days to cycle through, but it's worth it to make sure you're getting the ROI you're looking for and achieving the goals you set out at the beginning of your campaign.
#2: Use a funnel
Your prospects are all in different parts of their buyer's journey. Some are in research mode, others are comparing and some are ready to chat with you or buy now. Their keyword search queries typically shed a lot of insight into where they may be in their buyer's journey. Shorter "head" term searches often have the most search volume. These types of searches are most often used by those who aren't too far along in their buying process. The longer, more specific search queries are often made by those who are further down the funnel, likely in the consideration or decision stages as they've already narrowed down their search.
Let's use "widgets" as an example - if someone is in research mode and just starting their buyer's journey, they may do a Google search for "widgets." After some research, they realize they really like metal widgets. Next, their search query could be "metal widgets" as they're more educated in widgets and know more of what they want; this could put them in the consideration stage. If their search gets as specific as "blue metal widgets for sale," chances are they're in the decision stage and ready to buy.
Having said all this, you should keep it in mind when planning out your PPC strategy as you'll likely want to match your landing page and call-to-action to their assumed stage in their buyer's journey.
Traffic using keywords that could be used in the research phase may need a different call-to-action than a more specific query. A popular call-to-action for those in the research phase is some kind of premium resource like an eBook, whitepaper, report, or webinar as they're educational based and can help those in research mode. Be sure to match your form fields accordingly. Asking for their phone number may not be appropriate for an eBook download.
More specific keyword search queries could be mapped to a "get a demo" landing page, where you can ask for more information like a phone number. You also may want to test other calls-to-action in this phase such as demo, free trial, or even buy.
A well-planned marketing funnel can typically net higher quality leads, reduce wasted ad spend and lead to a more successful SaaS PPC campaign.
#3: Focused targeting
As we've already alluded to earlier in this guide, you'll want to make sure you're segmenting your keywords when it comes to PPC ads. But you can also segment your leads too.
The important piece to understand here is that if someone clicks on your ad, whether they are the right lead or not, you'll still be charged for that click.
When you focus your targeting, though, you're able to reduce the number of people who aren't a good fit from clicking on your ads.
You can do that by segmenting your keywords based on the different phases of the funnel. Still, you can take it a step or two further by implementing audience exclusion and adding negative keywords.
Negative keywords allow you to ensure that your ads aren't served to people whom you know aren't the right fit for your product right now. An example of this would be an accounting software platform that was the best fit for companies with 500 or more employees. By adding the keyword search term "small business" as a negative keyword, your ad is then prevented from showing to any users who search for keywords like "accounting software platform for small business."
If you plan to utilize LinkedIn sponsored ads, then the audience exclusion will help ensure that your ads are targeted more accurately to whom you want to get in front of. You can remove specific demographics from your audience, targeting those who aren't a good fit for your offer.
To utilize both of these tactics, you'll want to add them into two points within the lifecycle of your ad.
The first instance will be at the beginning of your PPC ad campaign. Brainstorm some negative keywords and audience exclusions and add them to your ad campaign.
Then, once the ad has been running for 4-6 weeks, you can then review your data and see if you need to make tweaks based on the people who are bouncing straight away or not converting after going through your funnel.
#4: Conversion and ROI tracking
Ever hear the saying, "what you don't track, you can't measure?"
This is no more true than when it comes to measuring the effectiveness of your PPC ads.
At a minimum, you'll want to be tracking your conversion rates and cost-per-click. This will help determine your actual ROI.
Reviewing these numbers every week allows you to make tweaks and adjustments as needed, particularly when you're split testing.
Often, you won't know something is 'broken' in your funnel unless you're looking at your conversion tracking numbers regularly.
Rather than lose thousands of dollars, you can catch the issue and make changes instantly.
Get Your PPC Campaign Started
Whether you are running your advertising campaigns in-house or you're looking to partner with a SaaS marketing agency, utilizing pay-per-click ads is one of the most effective ways to get the leads and engagement you need for your brand.
And if you've tried to create your PPC campaigns or if you've run a few and they just didn't get the results you were looking for, it's time to figure out the right PPC strategies that will work for your SaaS company. Once you've got your marketing plan in place and a content plan ready to go, a PPC campaign is an excellent next step to getting the right leads into your funnel every time.
Are you looking for ways to accelerate growth for your SaaS company? We're here to help you grow and scale. Reach out to learn more about increasing sales opportunities with PPC ads or fill out the form below: