The efficiency of your paid acquisition strategy significantly depends on the data analysis. Evaluating B2B SaaS PPC metrics and estimating the progress of advertising campaigns by data rather than by guess or personal experience helps:
- allocate resources to the most profitable segments;
- identify areas of wasted spend;
- reduce costs and keep them in control;
- outperform the competition by implementing a cost-efficient strategy;
- discover opportunities for growth;
- better know the target audience.
Performance marketing activities generate lots of data to analyze. If you just start implementing paid acquisition strategy for your business, this article could help you understand what metrics you should focus on. We gathered the most critical KPI’s for B2B tech companies to explore your marketing data, structure advertising campaigns, and cut costs of the digital marketing operation.
Most important B2B SaaS PPC metrics you should track can be divided into two groups: business metrics and campaign optimization metrics. Business metrics evaluate the performance of campaigns and how beneficial they are for your SaaS business or a tech product. Campaign optimization metrics help us understand if we are on the right track in terms of strategy, keywords and target audiences.
Campaign optimization metrics
Cost per click
CPC shows an average cost you pay every time a user clicks on your ad. However, CPC varies by industry, location, and advertising platform where the ads are running. You may learn more about the industry benchmarks on different advertising platforms in our upcoming article.
One of the cost-efficient strategies is an omnichannel paid acquisition. You can generate lots of relevant traffic on cheaper platforms (Google, Bing) and retarget B2B users on LinkedIn Ads.
The way of cost formulation is similar to how an auction works. Therefore, advertisers put bids on the keywords they want their ads to be shown. The bids regulate the competition of the keywords and form the market.
Nevertheless, if you place the highest bid, it doesn’t mean that your ad will appear above your competition. The ranking of ads also depends on keyword relevance and content quality. If you notice a high CPC increase, try bidding on long-tail keywords to generate more relevant traffic and stay on track within your most competitive keywords.
Strategize your advertising budget with CPC
500 clicks x 6% conversion rate = 30 demos scheduled
500 clicks x $12 CPC = $6,000 monthly budget
CPC also helps strategize your advertising budget. If you have a conversion rate you want to achieve in mind and are thinking about how much you need to invest, you can follow one of these best practices. If your average cost per click is around $12, the conversion rate is 6%, and you want to get about 30 demos scheduled, your planned budget should be approximately $6,000.
Cost per acquisition
The cost per acquisition metric shows the actual amount of money you pay for every lead or sale of your service or tech product subscription you get. Usually, it is calculated based on the lead qualification data. Imagine you spent $1,000 on clicks and got 40 leads. This means you paid $25 for every lead converted.
Not every click or contact you get is a lead that has an intention to buy your service. Only after your sales team have qualified all the leads you got with your ad campaign, you will have a clear picture of an average CPL.
Sometimes when you get a high CPA, it’s wise to look at your customer’s lifetime value. You can analyze how long your customers are using your B2B SaaS product. If it is around 6 or 9 months, a high CPA might be reasonable here as you invest in long-term relations. The customer lifetime value metric is valuable for subscription-based business models that deal with repetitive purchases and encourage customers to stay longer with your product.
Conversion rate is the metric that shows the actual performance of your ad campaign. It reveals the percentage of generated conversions to the total amount of clicks. Many B2B tech businesses, when setting KPIs for their ad campaigns, are wondering about what conversion rate is good.
For the B2B SaaS industry, a 3-6% conversion rate is a good result. While anything between 7-8% is a strong conversion rate meaning your paid acquisition strategy is cost-effective and works well.
Nevertheless, CR is not a constant metric. It very much depends on trends, seasonality, and pace of market development. B2B SaaS businesses should always keep track of market changes to adjust bids and advertising strategy. If you know that you get the most sales during the Black Friday offer or holiday breaks, try to allocate more resources during this period and generate more targeted traffic.
CTA and clear USP are some of the main parameters that influence the conversion rate. Here’s a simple infographic revealing conversion rate optimization tactics for B2B tech businesses.
Return on ad spend
ROAS measures the cost-efficiency of your B2B SaaS paid acquisition strategy. Accordingly, it is a sum of how much you earned with paid ads divided by the sum of all your advertising expenses (advertising bids, third-party agency or freelancer and designer management fees, and data analytics and marketing automation tool subscriptions).
The critical insight for the successful scaling of the strategy is making sure you get positive ROAS. To improve your ROAS, you should evaluate your ad copy, optimize your landing page or website, conduct comprehensive keyword research, and implement the best CRO tactics. Once you have a campaign achieving performance goals, you can pursue expansion opportunities based on performance and insights gained from managing the account.
B2B SaaS campaign optimization metrics
Number of clicks
The number of clicks is the basics of any advertising campaign. It shows how many times users clicked on your ad and, as a result, were referred to your website or landing page. Tracking clicks can help you understand what ads are more relevant for your audience to increase bids on them and improve keywords. If you see a dramatic decrease in clicks, it’s time to revise your ad structure, evaluate ad copy and graphics, and investigate keywords.
Click-through rate counts the percentage of clicks that generate impressions. In other words, it is the proportion of the ads that were clicked on to the ones that were viewed. The difference between the number of clicks and click-through rate is that CTR shows your ad performance and relevance. Say your ad was shown 1,000 times, and you got 100 clicks. This means that your CTR is 10%. CTR is a good metric to better understand what your audience needs and wants. As a result, if you get a low CTR, you will likely work on your message and CTA to make more people go to your website or landing page and book a demo or subscribe for a free trial.
Proper conversion tracking and comprehensive data analytics are some of the basics for a successful B2B paid acquisition strategy. Following a performance-based approach lets you start small and scale conservatively based on the performance. It helps keep costs in control and invest the budget wisely. Make sure to take the most out of your marketing budget and generate profitable results. If you have any useful insights on improving the conversion rate of your SaaS advertising campaign, or have dealt with interesting cases, feel free to share them with everyone in the comments. Let’s build a great community of professionals striving to build valuable strategies and make beneficial decisions.