What platforms should we advertise on? How much budget should we allocate to each? What’s the ballpark CPC for our industry?
I often hear questions like this from founders and marketers when they explore advertising for their SAAS startup. And my answer is always the same, “it depends”.
It depends on so many factors and if someone can give you a straight answer, they’re scamming you.
I’ve helped dozens of SAAS companies like Typeform, Olark, and ClickUp set up ad campaigns, and I know from experience that, while there are similarities, there are also differences.
And, in general, advertising for SAAS is not as straightforward as advertising for eCommerce. You can’t just throw up an ad and expect sales to come rolling in.
Like if an eCommerce store advertises a t-shirt with the words, “Talk moistly to me,” people go crazy for it. But I don’t see that reaction for enterprise procurement software ads.
This is where a framework comes in handy. It’s a systematic process that will help you figure out which platforms to advertise on, what your ads should look like, and so on. Instead of guessing or listening to the “gurus” and ending up with sub-optimal ad campaigns, you’ll be able to devise a profitable ad strategy that works for your SAAS.
In this post, I’ll share the framework I use for every SAAS company I work with.
PS – If you prefer video, here it is –
An Overview Of The Framework
The framework I use for ads is conceptually similar to my overarching framework for identifying growth channels at a startup. Both frameworks are built on the stage of awareness concept created by Eugene Schwartz in his book Breakthrough Advertising.
You’ve probably come across some version of it before. Customers typically start off being Unaware that they have a problem. At some point, it comes to their attention that they have a problem, so they’re Problem Aware.
As they start looking for ways to solve their problem, they become Solution Aware. Then they become Product Aware as they learn of the products that enable these solutions. And finally, they make a Decision.
I’ve adapted this concept to SAAS with the main idea being that people are searching for different things or have different needs at each stage of the journey, hence they should see different ads. So, for example, this is what it would look like for Shopify –
The bulk of Shopify’s marketing is aimed at first-time eCommerce entrepreneurs though a second and, I’d expect, more profitable customer persona would be the entrepreneur with an existing retail store.
So let’s say you’re a purveyor of tiger cubs and you sell them at your zoo/shop. Business is going well and you’re pretty happy until one day you realize that you could actually be making more.
Maybe it’s because your main competitor, Carole Baskin, is doing way better than you and you absolutely hate her guts, especially since she definitely killed her husband and got away with it. Or you may have just tapped out the local market and you’ve hit a plateau. Whatever it is, you realize you have a problem. You’re Problem Aware.
To solve this problem, you look for solutions. Maybe you dig into Carole’s business, or you start reading articles online about how to grow your business. Your research leads you to many solutions like opening up new locations, switching to a franchise model, or selling online. You’re Solution Aware.
Let’s say you decide to go online because of the attractive cost structure. Now you’re trying to figure out how that works. Should you hire someone to build a website and checkout system for you? Is there an easier way? You do a lot of Googling, subscribe to the newsletter of one of those fake make money online gurus, and find out that there are products like Shopify, Magento, and BigCommerce that make it easy. You’re Product Aware.
Now it’s time for you to make a decision. After asking around, looking at reviews, and even trying out the different products, you pick one and move your store online. Congratulations, you’re now selling tiger cubs internationally while you sit at home in your pajamas.
As you can see, understanding this journey for your customers and business allows us to determine the targeting, messaging, and call to action at each stage. We can also create a sequence of ads and landing pages that take people from one stage to the next.
For Panoply, we’ve seen far greater effects by segmenting landing pages to ad intents than broad tactical message or layout tests.
Trevor Fox, Panoply
The closer someone is to that final Decision stage, the easier it is to convert them. So I usually start my campaigns with the Product Aware stage and move backward. That way I can get some early wins before tackling the tougher ones.
Let’s dig deeper into each stage and see how it works.
Product Aware
In this stage, the prospect knows about the various products that solve their problem, and they’re trying to figure out which one to pick.
In SAAS, this usually means taking a free trial, looking up reviews or comparison posts, or talking to people at other companies to see which product they picked.
That implies anyone who has come across your product, or a competitor’s product, but is still trying to decide, is in the Product Aware stage. Most people who have either visited your website but haven’t signed up, or are specifically Googling a competitor’s product, or are looking at reviews on a site like G2Crowd, are in this category.
So your targeting becomes website traffic, competitor searches on Google, and review sites. Your message is whatever can convince the customer that your product is better than the others they’re looking at.
Let’s look at some examples of Product Aware campaigns –
Competitor Targeting
In 2014, I used to work for a company called LemonStand, an eCommerce platform like Shopify, and recently acquired by Mailchimp.
Back then we couldn’t afford to advertise for keywords like “eCommerce platform” because the word eCommerce was bid up by Shopify. In fact, if you searched for “worst eCommerce platform” you’d see their ad, though now they’ve wisened up.
To side-step this we simply advertised to people searching for Shopify. They weren’t a household name like they are now in 2020 but they were still well known in the eCommerce space. We figured anyone looking for them could be a potential customer.
Our biggest differentiating factor was customizability. With LemonStand you could change every aspect of your online store, but you couldn’t do that with Shopify.
And the campaign worked! We got leads that wanted more control over their store. We even drew the ire of Shopify who reached out to us via email and then started their own competitor ads, which didn’t really matter to us because we didn’t have a lot of traffic anyway.
Sadly I can’t seem to find screenshots of my campaigns, but it turns out Wix is carrying on the fight.
There’s is an art to tasteful competitor campaigns as I’ve learned over the years since, and I’ll share them in a separate blog post. But look up a well-known software product in any industry and you’re bound to see competitor ads. Use those as guidelines to set up your own!
Retargeting
I often suggest setting up retargeting early on even if you’re not planning on launching other ad campaigns. A good retargeting campaign that runs in the background can bring in new customers for pretty cheap. I prefer Facebook and Instagram for this but that depends on where your audience is.
One tactic is to promote a customer testimonial or case study as social proof. Try to highlight why a customer chose you over other products. Another previous client, an eCommerce customer support app called Gorgias, does this well.
For freemium SAAS, I sometimes break it up into two. The first ad converts site traffic to free users, and the second converts free users to paid.
Here’s one I made for Scott’s Cheap Flights. It’s not exactly SAAS but works on a freemium subscription model. They send you price drop alerts for international flights every day for a small fee.
I used a mild “Fear of missing out” tactic by highlighting some of the deals they missed by not signing up.
I then follow up with a case study, similar to Gorgias, to convert the free users to premium.
Remember that in this stage people are almost ready to make a decision, so your CTA for any ad and landing page is to sign up for your product, whether it’s free or paid.
Solution Aware
Once I max out Product Aware channels, and that could happen quickly if your competitors have low search volume or you have a large budget, I move back one stage to Solution Aware.
Here people are still researching solutions to their problems. They may not be ready to pick a product, and may not even know what products exist yet.
So on Google, they may be searching for “XYZ software” or “How to automate XYZ”. I may sometimes send traffic straight to a landing page depending on the search query.
On social networks like Facebook, Instagram, or LinkedIn, you could target a custom audience of prospect emails. I often promote blog content or webinars here to get an email address at the very least. After this, our retargeting ads kick in.
Here are some example campaigns –
Buyer Intent Campaigns
When expanding past competitor ads and retargeting into Solution Aware campaigns, I like to start with Google ads targeting buyer-intent keywords. These are keywords that indicate someone is looking for a particular solution. They may not necessarily know which products exist but at least they have an idea of the solution they need.
For example, one of my past clients is Procurify, a procurement software company. They have a complex product with features for every part of the procurement process – from creating purchase orders to approving them based on budgets, to paying suppliers, and tracking the delivery.
This is to say they solve many problems. So while they brand themselves as a “spend management” software, I also figured that anyone looking for, say, software to manage purchase orders would be qualified. So each solution Procurify offered had its own campaign.
These campaigns went to a landing page that talked about that specific solution, and also introduced the product and its other features. In fact, I didn’t send them to a landing page with only one CTA. While the primary CTA was to book a demo, the page I sent them to was also just a regular product page with links to other pages.
The reason is, again, we’re in a Solution Aware stage and people may not necessarily be ready to buy the product even though the keywords have buying intent. The page allowed visitors to self-select and either book a demo if they wanted to move quickly, or explore the rest of the site and understand the product a bit more.
And if they chose the latter, that was fine because our YouTube and Facebook retargeting from the Product Aware stage would kick in.
Informational Campaigns
Many B2B SAAS companies have large email lists for cold outreach. You can upload these into Facebook to create custom audiences that are probably Solution Aware, if not Product Aware, depending on your initial criteria for creating the list.
This strategy worked well for Plato, a mentorship platform for engineering managers. We’d run webinars with the VPs of engineering and product at high-profile tech companies like Lyft and Segment.
Then, we’d promote those webinars to a custom audience of our email list on Facebook and Instagram and optimize for webinar signups.
After that, our retargeting campaign would kick in and push people to sign up for a demo of Plato.
Another option is targeted newsletter inserts. Marketplaces like BuySellAds allow you to place ads in curated lists. So instead of building the list yourself and then reaching them in Facebook, you use an existing list and reach them directly.
Problem Aware and Unaware
You’ll find that a bulk of your ad spend will go to Solution Aware and you may not even need to hit the Problem Aware stage.
In fact, people in the Problem Aware stage are so early in the buying process that if you’re expecting an instant return on your ad spend, you definitely shouldn’t bother with this.
However, if you have more realistic expectations, here are some campaign ideas. For starters, your audience will probably just be anyone in your ideal customer profile.
On Facebook and Instagram this could be a lookalike audience or interest-based audience. So Shopify would target people who like entrepreneurship.
On LinkedIn, you could use job title targeting. On Google Display and YouTube you have audience-based options for people in a certain industry or in the market for certain types of software.
Pain Point Campaigns
One example would be a campaign that targets a broad audience and highlights a pain point that your product solves. The idea here is to bring awareness to that problem so that the prospect starts to think about it and eventually begins the journey of looking for a solution.
Grammarly does an amazing job here. This YouTube video ad targets students and all it does is highlight the pain point of writing a term paper.
Notice there’s no narrator going “Grammarly helps you yada yada yada…” It’s just a simple ad showing a student who is frustrated initially while writing a term paper and then eventually gets an A+ because she used Grammarly.
As a student, you may realize, upon seeing this ad, that you have a problem with writing grammatically correct sentences too, and that might get you to start taking it more seriously, eventually ending up using a tool like Grammarly.
Here’s another example from a past client, ClickUp, a project management software. They’re using a lookalike audience to highlight the pain point of not being able to visualize projects.
In fact, many display, video and even billboard ad campaigns fall under this category. The point is not to get you to buy something instantly, which is why all the new-age marketers who make fun of it don’t really understand what’s happening.
The point is simply to highlight a pain point you might have and get you to start thinking about solving it. If you click through and sign up immediately, that’s just a bonus.
Optimization and Scaling
So the framework helps you decide which platforms to use, and what your ads and landing pages should say. But how do you know if your campaigns are working or not? When do you decide to cut something or double down on it?
For starters, you want to be profitable. In general, I like to aim for a 3:1 ratio of LTV to CAC. Sometimes, depending on the payback period, I may even go higher.
I also try as much as possible to look at the CAC holistically. So instead of comparing platforms, since my platforms are working together to create a cohesive ad campaign, I’m looking at overall CAC.
To optimize within platforms, I’d do a straight comparison for campaigns in a certain stage of the journey. So I wouldn’t compare a Product Aware campaign on Google against a Solution Aware campaign.
But I would compare all Product Aware campaigns against each other to decide which ones to double down on and which ones to drop.
I’d then do the same thing on an ad set and ad level.
As you pause underperforming ads or campaigns, expand the best-performing ones, and even add new campaigns as the framework dictates, you’ll be able to scale your ads profitably.
Putting it all together
In the end, you may end up with a set of ads across different channels that work together to move people from one stage in the journey to the next, and finally to a purchasing decision.
As you can see, there’s no “best ad platform” or “best type of ad”. They each have their strengths and work at different parts of the journey.
If you’re looking to get started with ads for your SAAS business, I suggest testing the waters with the Product Aware campaign ideas I suggested.
And if you need help, feel free to contact me!