B2B SaaS Case Study: How We Improved Sales by 5% with 30% Less Ad Spend
Last updated: May 26th, 2021
Conversations with new clients often start with them saying:
“We’re wasting money on PPC and we don’t know why.”
This was the case for a B2B SaaS client that sells fitness business software.
When they came to us, they were spending 180% of their PPC ad budget — almost double the amount they had budgeted. And they couldn’t figure out why.
They’d been working with an agency who “set it and forgot it.”
With their Google Ads, they were running outdated bidding strategies and wasting a significant amount of money displaying prospecting ads to existing customers.
Meanwhile on Facebook, they structured their campaigns based on audiences, rather than objectives — an approach more common in eCommerce (indicating their agency wasn’t familiar with best practices for B2B SaaS marketing).
And we found a ton of campaigns left running that weren’t producing any conversions.
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These are fundamental mistakes that will limit any SaaS business from achieving budget efficiency in their paid ads, yet we see these errors made all the time.
By fixing these problems, we cut their spending by 30% in the first two months while maintaining conversions (and increasing lead quality, too).
In this article, you’ll learn:
- More about the mistakes they’d made with their Google and Facebook Ads (which can help you spot sources of inefficiency in your own paid ad efforts).
- The specific changes we made to their Google Ads, like creating exclusion audiences — which reduced spend by 23% from January to March.
- Why restructuring their Facebook campaigns to focus on objectives versus audiences reduced spend by 36% in the same time period.
Are you worried that you’re overspending on B2B SaaS Facebook and Google Ads? Schedule a Free SaaS Scale Session to find out how we can help you optimize your budget.
The mistakes they made with Google Ads that overshot their budget
We found four areas of inefficiency in our client’s Google Ads that led to overspending:
- Including Display and Search Partners in their targeting for inbound search.
- Inconsistent, scattered geotargeting.
- Using manual bidding with enhanced cost per click & max conversions when there was sufficient data to use smart bidding.
- Wasting spend on existing customers by not having an excluded audiences list.
Before we cover the steps we took to fix them, let’s look at each and why they were the source of their wasted ad spend.
1. Including Search Partners in their targeting
One of the options available when advertising through Google is to run ads to “Search Partners” — websites in Google’s Search Network extend the reach of your ads to non-Google websites, as well as to YouTube and other Google-owned sites.
These can be useful when you need to create more volume and awareness for a unique product, or you have more budget than you are spending and want to reach additional people.
But the downside of using this setting in Search and Display ads is that you have very little control over who can see your ads. This was causing our client’s ads to appear in front of poor-fit prospects who had no use for their product.
For example, their ads appeared on sites that were irrelevant to the kind of software they were selling, such as:
- Dating Apps like Tinder, Meet4U, Sexy Girl Chats and more.
- Apps for Coloring and Games (your customers don’t want to be bothered with your ads when they are taking a break to play a game).
- Various websites with sensitive, offensive, or polarized political content (Places you really don’t want your product being shown).
Note: This tactic can and does work for some clients, but in this instance, it was depleting ad spend with no discernible ROI.
2. Inconsistent geotargeting
Every company has a primary region they target their advertising to.
Generally speaking, most companies start by targeting North America as a whole.
When combined, the U.S. and Canada have the highest consumer search volume in the world.
Most of our client’s ideal customers were U.S. based. But their settings were configured to display ads to people in a hodgepodge of locations, making it hard to get a full picture of what locations were actually working.
Specifically, their settings were set up where some campaigns were targeting “people in or looking for” versus “people in”. This allows Google to show ads to anyone in the world versus people in just their targeted locations.
Google recommends this setting, but in most cases, we recommend exclusively using the “people in” setting.
3. Using eCPC (enhanced cost per click) and Max Conversions
We noticed that they primarily used enhanced CPC (cost per click) and Max Conversions. These settings are fine when you’re just starting because you likely don’t have much conversion data yet. Relying on data from hoards of other sources that Google’s collected is one way to get your campaigns off the ground.
But once you have more insight on what’s generating conversions from your advertising (like our client did), it’s better to shift over to smart bidding.
This is an approach that uses machine-learning to optimize for conversions or conversion value in each auction.
Smart bidding allows you to make decisions based on data that’s unique to you, rather than the aggregate of other advertisers.
4. Wasting spend on existing customers
It’s common for users of software products to open up a web browser and search for the login or support page. For example, users will search “brand + login” or “brand + support” as a way to quickly navigate to those pages.
Especially for established companies, it’s essential to use negative keywords (keywords you do not want your ads to show up for) and audience exclusions (groups of people you don’t want to show ads to) to avoid wasting ad spend on current customers.
This company has over 7,500 gyms that use their software. By not using negative keywords and audience exclusions, their previous agency wasted a significant amount of budget displaying ads and paying for clicks from their existing customer base.
This was severely impacting the efficiency of their campaign budget and conversion performance.
Fixing it was one of the biggest contributors to improving performance.
The steps we took to reduce their Google Ads spend by 23%
1. Uploaded exclusion audiences
Usually when we start working with a new client, they have a general idea of the audiences they’d like to target.
But they rarely think about the audiences that their ads shouldn’t target.
Creating exclusion audiences is one of the critical ways you can get your ad spending under control.
To do this for our client, we turned to their CRM.
Creating this was an essential step to prevent wasting ad budget on their existing customers.
The other was adding in negative keyword lists.
2. Implemented more robust negative keyword lists
Just like exclusion audiences, many companies come to us without having much of a negative keyword list. This can often be the difference between running profitable and unprofitable ads.
Telling Google which keywords not to target is another key tactic for not wasting budget.
We use an extensive list of hundreds of negative keywords, many of which are specific to B2B SaaS. This list includes terms that help avoid showing ads to people searching for things like “brand + login” or “brand + support.”
There are several advantages to using negative keyword lists. For example, they can:
- Help your ads rank higher on Google.
- Improve your quality scores and click-through rates.
- Set you on a path to lower your cost per lead and cost per acquisition.
3. Paused ads to low performing keywords
There were many instances of our client wasting budget on keywords that weren’t getting impressions, clicks, or conversions.
For example, one keyword, martial arts attendance tracker, seemed like a keyword they should target. But when we looked at the data, we noticed it had a lower-than-average clickthrough rate. Their average CTR was 6.07%, while this one was below 3%.
To further reduce wasted ad spend, we paused ads to certain keywords that weren’t performing well. That led to improved overall conversion rates from narrowing in on keywords that were actually generating clicks and conversions.
And now, their average CTR is 15.7%.
4. Turned off broad match keywords
Google’s broad match keyword setting allows you to show your ads to anyone searching for:
- The specific keyword you’re targeting.
- Variations of that keyword.
- Related topics.
Google will argue in favor of using broad match, but doing so often leads to your ads showing up for generic searches that are irrelevant to your business.
Plus, they place you in unwanted competition with other advertisers, which drives up your cost per click.
Running ads to broad match keywords is only useful when you have a robust negative keyword list.
By removing broad match keywords and replacing them with phrase match, we were able to have more control over the search terms that our ads were being shown for and therefore decrease spending on irrelevant search terms.
5. Fixed geotargeting
Lastly, to focus on the highest quality audiences and optimize for conversions versus impressions, we changed their geotargeting settings to focus solely on North America.
Combined, these updates led to:
- 23% reduction in their Google Ads spend in just two months
- 11.5% increase in goal conversions
- 185% increase in conversion rate
Now, let’s look at the problems we solved with their Facebook Ads.
What we saw going wrong with their Facebook Ads
There were two core issues we found with their Facebook Ads:
- They were using separate campaigns for each audience they were targeting.
- They were wasting budget on campaigns that never converted.
Next, we’ll break down why each of these led to wasted spend, and then walk through how we fixed them.
1. Using separate campaigns for each audience
The first thing we noticed when looking at their ad account was that they had separate campaigns for each audience they were targeting, running about 60 campaigns, each with a small daily budget.
The problem with this approach is that when campaigns don’t have enough budget, they don’t receive enough clicks to get out of the learning phase, or what Facebook calls “Learning Limited.”
The implication of this is that campaigns never collect enough data for Facebook’s algorithm to optimize those ads for your conversion goals.
When that happens, you aren’t able to tell which audiences are performing well and which aren’t.
This limits you from being able to optimize your ads by switching off poor performers, and focusing your budget on audiences that perform well — which leads us to the second issue we found.
2. Wasting budget on ads that never converted
The second thing we saw was that they were spending hundreds and sometimes thousands of dollars displaying ads in front of audiences who never converted.
Of the 60 campaigns they ran, we found 13 ads that were spending well over their target CPA (around $212) — with one spending over $1,100 per demo. And they had 21 ads running with 0 conversions.
In part, this was influenced by the way they had structured their campaigns. With many of their ads stuck in the learning phase, it wasn’t clear which campaigns had potential and which didn’t.
However, you could still see that some ad sets were converting, and many weren’t. The ones that weren’t were simply left on to continue wasting spend. And the ones that showed conversions were never allocated more of the budget.
How we fixed their Facebook Ads to reduce spend by 36%
Resolving the issue of wasting budget on campaigns that never converted was easy. We just looked through all of their campaigns, identified which ones had never performed well, and turned them off.
Most of the work we did centered around restructuring their campaigns.
Instead of using separate campaigns for each audience, we consolidated those 60 different audiences into four campaigns based on specific, SaaS-focused objectives:
- Brand awareness with blog post promotion.
- Prospecting with lead magnet downloads.
- Prospecting with demo offers.
- Remarketing with case studies and demo offers.
There are several distinct advantages of structuring campaigns this way in B2B SaaS.
First and foremost, by dividing their budget into just four campaigns (compared to the 60 they had prior), each campaign received significantly more budget, and therefore individual ads were able to receive enough clicks to get out of the learning phase.
This gave us the data we needed to see which audiences and ads were performing well, and which weren’t.
We then allocated more budget to the best performing campaigns, and continued to switch off those that received few or no conversions, which led to huge increases in efficiency.
The other advantage of structuring campaigns this way is that we were able to clearly organize their different offers (blog post, lead magnet, demo, etc.), and pair them with the most appropriate audiences.
We refer to this as journey-offer fit: presenting audiences with the offer that fits where they are in the buyer’s journey.
For example, we offered:
- Blog posts to lookalike audiences in their awareness campaign.
- Lead magnet downloads to lookalike audiences in their prospecting campaigns.
- Case studies to website visitors in their remarketing campaigns.
- Demos to people who had both visited their website and engaged with a lead magnet.
By pairing each audience with the most appropriate offer for their stage in the funnel, we were able to improve the relevance of the ad being shown to the user based on where they were in the funnel, and improve the quality of the leads coming in.
We actually had fewer conversions through Facebook than they had previously, and yet sales for the company had increased by 5% because the leads that did come through had higher intent to buy.
The results? Same lead volume, higher quality with lower spend
When we started working with this company, they were paying on average about $700 to $800 to acquire new demos. By the end of our first two months, those figures decreased down to $166.22 on average.
To recap, on Google we created exclusion audiences and paused keywords that didn’t convert. On Facebook, we consolidated audiences and restructured campaigns around specific objectives.
These changes contributed to investing their budget in ways that actually brought them new customers.
No longer did they have to worry about wasted ad spend on irrelevant audiences, like existing customers searching for login or support.
Making these changes ensured they were spending on gym owners who needed their software the most.
We help B2B SaaS companies increase traffic and quality leads through PPC and SEO. Book a Free SaaS Scale Session to learn what we can do for you.
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