Taking your first steps: Introduction to Google Ads for SAAS Companies

Paid Media for SASS

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We have all seen these ads online. It seems like every SAAS product has some partnership with Google that can get you “free money”. And yet… you still haven’t dipped your toe into the ad world.

Why? For most people, it is because it is a big investment in both time and money.

I am writing this article for those of you in that situation – you are familiar with Google Ads and think they could benefit your SAAS company but aren’t sure where to start and how to go about it in the right way.

Let me walk you through taking your first steps in paid media at your SAAS company and answer some of the common questions we get.

 

When should I start using paid media for my SAAS company?

As someone who makes a living partially off of clients using paid media, you may expect me to say something along the lines of “Everyone should use paid media. If you are breathing right now and like money, you should be using paid media”.

The truth, however, is that not everyone should be using paid media.

The channel should be treated just like any other marketing channel, from email to SEO – you should only use it if you can get a positive ROI out of it. And in paid media, just like any other channel, you can only have success if you know a few things first:

Know your audience

Who are you selling your product to? I don’t just mean what their title is, I mean you should know everything about them:

  • Are they mostly male or female?
  • What age range do they fall between?
  • What publications do they frequent?
  • Where do they live?
  • Hanes or Gildan? (okay, maybe not that one)

While this is important for any marketing, it is especially important to paid media. Google Ads has some VERY specific targeting methods that allow you to prioritize certain attributes of users. This is one of the strengths of the channel, and if you don’t have an accurate understanding of your buyer then you will be throwing money away on clicks that are unlikely to convert.

Note: If you aren’t confident in who your persona is, then use a tool like Hubspot’s persona worksheet to figure it out.

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Other, more important note: If you think you have an understanding of your persona but you have not taken the time to talk to real clients, you may want to revisit that. You can tell some demographic information by looking at your clients, but without talking with them (or better yet having a third-party talk to them) you can only assume what their pain points and desires are.

 

Know what your offering is

While it would be great if every click you got on an ad led to a customer, that is not going to be the case. Depending on the set up of your campaign, users may still be in the early stage of the buying process when they click; they’re doing research for solutions to their problem. If your ads are targeting those still in the research phase, they may not be ready to make the purchase, so don’t try to force them to. That is like the Comcast rep asking you if you’re interested in buying Xfinity Mobile when you just called to cut cable – you’re not in that mindset.

Instead, give them something useful for where they’re at in their journey. Maybe you offer a whitepaper, tip sheet, or worksheet to guide them in their decision process.

If your SAAS company offers a $10-a-month product, however, you may be able to go straight for the sale. The important part is understanding where prospects are in the buyer’s journey and how you can help get them to the next stage.

 

Know how to use the platform (or work with someone that does)

There are some types of marketing that you can do without any complicated tools – like social media, for example. If you know what you are doing, you can just jump on LinkedIn and start creating great content. You don’t really need to know how to use a social media management tool.

That is not the case for paid media and Google ads specifically – lack of knowledge of the platform leads to a lot of wasted money and effort. I don’t say this to discourage you, but instead to make sure that you get a positive return from your efforts. Many business owners or marketing managers of SAAS companies have sworn off paid media because “it just doesn’t work for them.” And yet, it is bringing in mountains of leads for their direct competitors…

Luckily, there are lots of free resources to learn everything there is to know about Google Ads. They even have their own academy and certification process!

 

How much should I spend?

One of the first questions I get when I start working for a client that is interested in paid media for their SAAS company is, “How much should I spend?”

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A simple and very reasonable question. The answer, however, is not as simple. And while that’s probably not what you were hoping if you’re asking it as well, the answer is that it depends.

What does it depend on?

Hey, that’s a great follow-up question. First and foremost, the amount you should spend depends on the competitiveness of your market. Google Ads is built on a bidding system, so as competitors increase, so do prices. If you are a lawyer, then you are going to need to spend a lot more than Lefty’s would.

Secondly, it depends on your results. If you are running ads and have tightened up your campaign to the point that you are getting a 200% ROI – scale, baby! It usually takes time to build up to that point, but if you are getting a great return on your ads then increase your budget and take over a larger share of the market.


While tracking ROI is an article in its own, I do want to note that you need to take more than just your average cost-per-click from paid media into account. If you make $5,000 from your ads this month and only spent $2,000 that may sound good, but if it costs $3,500 to deliver the goods (labor, rent, taxes, etc.) then you are actually $500 in the hole.

The math
Income:         +  $5,000
Ad Cost:        -  $2,000
COGS:           -  $3,500
Profit:            ($500)

If you are reading this and thinking “I get it, there are lots of factors in figuring out pricing. But just give me a number!”

I hear you. Spend $1,456.75 /mo. to start off. No more, no less.

 

How should I set up targeting?

Paid media tools like Google Ads are particularly strong in their ability to target accurately. To provide an example, we recently set up a campaign for a waterproofing company that connected to an open-source weather API to increase ad spend when it rained outside. You can’t do that with SEO.

Use that power. Too often we see campaigns that are only using keyword and geographic targeting. That is a start, but you may find after looking into the data that 85% of the sales come from the 35-44 age bracket while 60% of your clicks are going to the 65+ age bracket that led to no sales! This is an extreme example, but it highlights the importance of targeting.

Here is a list of some of the targeting options available through Google Ads:

  • Keywords
  • Location
  • Geography
  • Age
  • Gender
  • Marital Status
  • Contextual Targeting
  • Interests
  • Device
  • Audience
  • And more…

Big picture, target as precisely as you can. You want to balance tight targeting and having a big enough audience to drive real traffic to your site.

Adwords is all about testing, learning, and tweaking. Start the campaign off with the targeting you think will work best, give it a week or two, then look at the data. After a few weeks of this, you will be making decisions based on cold, hard data and will be well on your way to building up your marketing funnel.

I hope this answered your initial questions on paid media for SAAS companies, but I know the world of paid media can be a confusing one. If you want some expert guidance from a team of content creators, analytics professionals, and strategists all dedicated to making your paid media campaign a success, then please reach out.

Best of luck on your journey toward success in paid media.

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