SaaS Paid Ads: Stop Wasting Money (LTV Guide)

Everyone wants to know the magic number. The "average cost" of getting a SaaS customer through paid advertising. But if you're asking that, you're already thinking about it the wrong way round. There is no magic number. I've seen campaigns for one B2B SaaS client where we reduced their Cost Per Acquisition from £100 down to £7, and another where a $22 cost per lead from a C-level decision maker was an absolute bargain.

The real question isn't "what will it cost me?". It's "how much can I afford to spend to beat my competition and win a valuable customer?". The answer isn't in some industry report, it's in your own numbers. Get this right, and you can scale aggressively. Get it wrong, and you'll just be burning cash with nothing to show for it.

How do I figure out what a customer is actually worth?

Before you spend a single quid on an ad, you need to know your Lifetime Value (LTV). This is the total profit you can expect to make from an average customer over the entire time they stay with you. Without this number, you're flying blind, making decisions based on gut feel instead of cold, hard maths. And that's a surefire way to lose money.

Most people overcomplicate this. It's actually a pretty simple bit of arithmetic. You just need three numbers:

1. Average Revenue Per Account (ARPA): How much cash does a typical customer pay you each month?
2. Gross Margin %: After your cost of goods sold (server costs, support staff etc.), what percentage of that revenue is actual profit?
3. Monthly Churn Rate: What percentage of your customers cancel their subscription each month?

The formula is: LTV = (ARPA * Gross Margin %) / Monthly Churn Rate

Let's say your ARPA is £200, your gross margin is 75%, and your monthly churn is 5%.
Your LTV = (£200 * 0.75) / 0.05 = £150 / 0.05 = £3,000.

So, each customer you sign up is worth £3,000 in profit to your business. Now we're getting somewhere. Use the calculator below to figure out your own LTV.

Now you have a target. A healthy SaaS business aims for an LTV to CAC ratio of 3:1. So for a £3,000 LTV, you can afford to spend up to £1,000 to acquire that customer. This is your new benchmark. Your entire paid advertising strategy now revolves around hitting that number.

What am I actually paying for on different platforms?

Okay, so you've got your target CAC. Now, where do you spend the money? For UK SaaS, there are really only three platforms that matter: Google, Meta (Facebook/Instagram), and LinkedIn. Each has a different role to play and comes with very different costs.

Google Ads: The Intent Catcher

This is where you start. Google Ads is for capturing demand that already exists. People are actively typing their problems into a search bar, looking for a solution. Your job is to show up with an ad that says "I can fix that". For a B2B software, you don't target broad terms. You go after keywords that signal real buying intent. Think "accounting software for small business" not "what is accounting". Because these users are pre-qualified by their search, they often convert at a higher rate. We've seen this work time and time again; if you want to understand the specifics of this, we've put together a full guide on how to make Google Ads convert for UK SaaS.

-> Cost: You're bidding on keywords. In the UK, expect to pay anywhere from £2 to £15 per click for decent commercial terms. Your final Cost Per Trial will depend entirely on how well your landing page converts that click.

Meta Ads: The Demand Creator

Nobody goes on Facebook or Instagram to look for a new CRM. You're interrupting their scrolling. This means your job is harder. You have to create demand where none existed a second ago. The mistake everyone makes is running "brand awareness" campaigns. Don't do it. You're literally telling Facebook's algorithm to find the cheapest people who will never, ever buy from you. Always, always run conversion campaigns optimised for a trial, signup, or lead. We've seen SaaS clients get thousands of trials this way, one got over 5,000 trials at $7 each. The key is brilliant ad creative that stops the scroll and speaks directly to a pain point. If you want to grow past the low-hanging fruit on Google, you'll need to master this, and understanding how to properly scale Meta ads for SaaS is the only way to do it.

-> Cost: Clicks are cheaper here, maybe £0.50 to £2.00. But because the intent is lower, your conversion rates will be too. A good Cost Per Trial might be anywhere from £5 to £50. It all depends on your targeting and creative.

LinkedIn Ads: The B2B Sniper Rifle

If you need to reach a Head of Engineering at a FTSE 250 company, LinkedIn is your only real option. The targeting is unmatched. You can go after job titles, company size, industry, specific company names... it's incredibly powerful. But you pay a heavy price for that power. It's by far the most expensive platform. This is only for high-LTV products where a single customer is worth thousands, if not tens of thousands. We ran a campaign recently that brought in leads from B2B decision makers for a software client at around $22 (£17) a pop, which was a fantastic result for them. But you have to be absolutley sure your funnel can convert those expensive leads.

-> Cost: Expensive. Be prepared for clicks costing £5 - £20+. A Cost Per Lead can easily be £50 - £250+. Don't even think about it unless your LTV is well into four or five figures.

Alright, but what are some actual numbers I can expect?

Even with all the variables, it's helpful to have a ballpark. Based on the campaigns we run, here's a rough guide. For a simple conversion like a free trial signup or an ebook download, you're looking at a cost per click (CPC) somewhere between £0.50 and £1.50 in a developed country like the UK. A decent landing page should convert between 10% and 30% of that traffic.

So, the maths: at the low end, your Cost Per Acquisition (CPA) could be £0.50 / 30% = £1.67. At the high end, it could be £1.50 / 10% = £15. Most of the SaaS campaigns we work on fall somewhere in that range for a top-of-funnel conversion. One of our app clients managed to get over 45,000 signups at under £2 each across multiple platforms, which shows what's possible when everything clicks.

This little tool can help you see how CPC and your landing page conversion rate affect your final cost per lead. Play around with it to see how a small improvement to your landing page can have a massive impact on your costs.

Why are my costs so high even with the right targeting?

If you've done your LTV homework, picked the right platform, and your costs are still way above your target CAC, I can almost guarantee the problem is your offer. The single biggest mistake I see SaaS companies make is asking for too much, too soon. Your "Request a Demo" button is killing your business.

Think about it from the customer's perspective. They're a busy professional. They see your ad. They have a problem you might be able to solve. But are they really going to commit to a 30-minute sales call with a stranger just to find out? No chance. It's a high-friction, low-value proposition. You're asking them to give up their time in exchange for the 'privilege' of being sold to. It's arrogant, and it's why your conversion rates are terrible.

The solution? Stop selling and start helping. Your offer's only job is to provide a moment of undeniable value. For SaaS, this is your superpower.

-> The Gold Standard: A free trial (no credit card required). Let them get their hands on the actual product. Let them solve a small part of their problem for free. Let the product do the selling. Once they're using it and seeing the value, the conversation about paying becomes a formality.
-> The Next Best Thing: A freemium plan. Same principle, but it's a permanent free tier. This creates Product Qualified Leads (PQLs) – people who are already convinced of your value because they're actively using your tool.

If you fix your offer, you fix your advertising costs. It's that simple. We often tell new clients that before they even think about ad spend, they need a proper UK startup ad audit, which almost always starts with a brutal look at the offer itself.

I've found something that works, but my costs are rising as I spend more. Why?

This is a completely normal part of scaling. You find a winning audience and ad, you increase the budget, and suddenly your CPA starts to creep up. It's frustrating, but predictable. You're experiencing audience saturation. There's only a finite number of people in any given audience who are prime to convert *right now*. Once you've reached them, the algorithm has to work harder, showing your ads to less-relevant people, and your costs go up.

You can't fight this, but you can manage it. When you hit this plateau, it's time to get more sophisticated.

-> Improve Your Funnel: Can you increase your landing page conversion rate by another 2%? Can you improve your trial-to-paid conversion rate? Every small improvement here means you can afford to pay more to acquire a user and still be profitable.
-> Aggressive Creative Testing: You need to be constantly testing new ad copy, new images, new videos. We've had massive success for SaaS clients with User-Generated Content (UGC) style videos. They look native to the feed and build trust. You should always be trying to beat your winning ad.
-> Expand to New Platforms: If you've maxed out Google Search, it's time to build a proper engine on Meta. If you've saturated Meta, maybe it's time to test LinkedIn for those high-value customers. This is where a proper global SaaS growth strategy comes into play, expanding your reach methodically instead of just cranking up the budget on one platform until it breaks.

Scaling isn't just about spending more money. It's about getting smarter with your money and building a system that can sustain growth without your costs spiralling out of control.

So, what should I do right now to manage my ad costs?

This has been a lot of information, so let's boil it down to a clear action plan. Don't try to do everything at once. Work through these steps in order. This is the main advice I have for you:

When does it make sense to get expert help?

You can absolutely do all of this yourself. But as you can see, managing paid ad costs for a SaaS company isn't just about launching a campaign and hoping for the best. It's a complex process of financial modeling, strategic channel selection, constant testing, and deep analysis. It's a full-time job.

The learning curve is steep, and mistakes are expensive. Every pound you spend on an ad that doesn't work is a pound you could have invested in your product or your team. Working with an expert isn't about outsourcing the work; it's about buying speed and avoiding costly errors. It's for when you're ready to stop tinkering and start building a predictable, scalable customer acquisition engine.

If you're at that point and want a second pair of eyes on your strategy, we offer a free, no-obligation 20-minute consultation. We'll have a look at your current campaigns, your offer, and your numbers, and give you some honest, actionable advice you can implement right away.