How to Calculate Your SaaS PPC Budget: The Complete Guide

As a SaaS (software-as-a-service) brand, you have two options for PPC (pay-per-click) advertising: hire a SaaS PPC agency, or do it yourself.

If you opt for the latter, it is important to buff up on this neck of the marketing woods as much as possible and resist the urge to go in blindly with your campaign preparation.

One of the most important elements that shouldn’t be overlooked is your SaaS PPC budget. Your budget is the backbone of any campaign – and that’s especially applicable when dealing with PPC advertising.

If you’ve never dabbled in this before, this article explains everything you need to consider when drafting up a budget, as well as some priceless advice for your campaign planning.

Let’s dive deeper.

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SaaS PPC Budget Explained

As a brand/marketer, you will no doubt already be familiar with the importance of your marketing budget, and how it should be spent.

If you’ve yet to dabble with SaaS, naturally, you will need to factor this into your budget also. The next factor to consider is your marketing goals and how you wish PPC advertising to fit into them. Questions to ask yourself include:

What do you hope to get out of your PPC campaign?
Is it important to drive more traffic to your website? Is this a key goal?
Do you wish to increase brand awareness via your campaign?
Are you looking to increase sales?

Being clear about your goals (and narrowing it down to one or two) will help you outline the right campaign type, as well as giving you an idea of what your budget should realistically be. Once you’ve done this, the next questions you should be asking yourself are:

What audience do you wish to target?
What keywords are they likely to be punching into the search engine?
How much are you realistically able to bid for these keywords?

Once you have all your answers, you will have an informed idea as to what your SaaS PPC budget should be. This doesn’t have to be an exact sum that you strictly adhere to – just a guideline.

If you’ve never delved into this area of marketing before, Google Ads’ keyword indicator tool may help you out in regards to your ad spend.

Calculating Your SaaS PPC Budget

Because PPC depends on bidding and because you will be charged for every click – whether or not the clicker converts – it is especially important to have a realistic idea of your ad spend, as well as how to stay within budget.

As long as your targeting has been on-point (and the content of your campaign is relevant and appealing), you should see a profitable ROI on your PPC campaign.

You can calculate your ideal PPC budget by following these four simple steps:

Be clear about your goal/s.

We referenced this earlier and it is important enough to say again – GOAL CLARITY IS IMPERATIVE.

There should be a clearly defined goal behind every ad campaign you create. Failure to do this will likely generate mixed messaging to your audience and will almost certainly not be a financially fruitful endeavour.

Research your keywords.

PPC ad success depends on keywords, so do your homework. They will also help you gauge your budget, because you will know what keywords are the right ones for your campaign, and how much you’re willing to spend on bidding for them.

Those familiar with how keyword bidding works will understand that certain keywords will accrue a higher cost than others because they’re more valuable and the competition for them is stiff.

To preserve your budget as best as possible, you will want to refine your keyword choices to the most relevant to your campaign.

Make use of Google Ads’ Keyword Planner

We mentioned earlier that Google Ads has a great tool in the form of its Keyword Planner. Get acquainted with it and it will be a priceless asset for your campaign planning.

How it works is it provides an accurate forecast on the CPC (cost-per-click) trends, as well as helping you find new keywords and indicating how many other brands/marketers are using them.

Finally, it will recommend a price on how much it thinks you should bid per word.

Discern how many clicks you wish for your campaign.

Head over to Google Analytics to calculate your click amount goals. You can do this by dividing the total number of clicks on your campaign by the number of conversions that happen via the campaign.

The sum you’re left with will then give you an idea on how many clicks (per conversion) you should be aiming for with this campaign. You can then multiply this number by the average CPC price on your chosen keywords, which again, all helps you narrow down an ideal budget.

Calculating the Value of Your Leads

Your target audience is broken down into individual leads, all of which have a certain level of value. Naturally, you’ll want to go for the highest-value leads. Discerning the value of each lead depends on these following factors:

Precedence. Your past leads will give you an indication on how they qualify as a lead.
Geography. Is location an important factor? Is it worth paying more for certain locations if there are leads in that area?
Engagement. Do your leads engage with your brand before they convert? If so, why?
Site behaviour. How long do they stay on your site once they’ve clicked? What are their actions once they do?

Going back to keywords for a second – as important as your positive keywords are, it’s worth researching the negative ones too to aid in your ad’s visibility. Negative keywords serve to filter out the words/phrases that aren’t likely to lead to a conversion.

Also, you can filter out certain websites (site exclusions) you don’t want your ad to appear on, as well as adjusting bids based on time of week/day (known as dayparting). Segmentation is also a key player in budgeting.

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Setting & Tracking Your PPC Budget

SaaS companies creating a PC ad campaign will need to set their budget based on the above research and actions, and then keep an eye on it while the campaign is live. Here’s why:

It provides an accurate forecast on your ROI.
It helps identify areas in which you’re over/underspending.
Allows you to make informed decisions about resource distribution.
Provides insight in areas that need tweaking.
It is essential to SaaS marketing.

Creating a Successful SaaS PPC Ad Campaign: Top Tips

Adhering to these top nine tips will help you on your way to PPC campaign success:

Only opt for keywords with the most relevance to your campaign’s content, as mentioned earlier.
Split-test your section headlines. A/B testing in general is important, but particularly on your headlines, as leads often skim-read content.
Keep an eye on your competitors. This will allow you to compare your performance with theirs. Be mindful, however, of reverse engineering.
Optimise your landing page. Your lead won’t convert via your ad – they’ll do so on your website, so make sure it’s up to scratch (simple to navigate, clear CTA, etc), and make sure it echoes the tone and sentiments of your ad.
Create an email list. An excellent marketing strategy for all SaaS brands is to create an effective email list. This is because email is still a powerful marketing tool.
Price-testing. If your campaign is to advertise a new SaaS product, before it goes live, it can be worth UX testing the product, as well as researching a suitable price. This can also be achieved by creating buyer personas and understanding your target audience fully.
Retargeting. Retargeting ads is a particularly effective marketing method for SaaS brands, particularly if the goal is to boost web traffic.
Gauging your CPA (cost per acquisition) and your CR (conversion rate). This means putting monetary value on each individual lead. Your CPA is total ad spend divided by your total number of leads. A healthy conversion rate should be between 5% and 15%. Again, making use of your Google Analytics will help you here.
ROI metrics. Finally, you’ll need to analyse whether the campaign provided a good return-on-investment. You can do that by allocating your key performance indicators (KPIs) of choice and start collecting data.

Conclusion

There is an art to successful SaaS PPC marketing and often the trick lies within good budget planning and management.

By following these top tips, you’re likely to see a profitable return on your efforts.

If you’d like to learn more about how we help B2B SaaS companies grow their MRR through SEO and PPC, contact us online or send us an email today at info@getuplead.com to speak with someone on our team.