SaaS Ads: The Complete Guide to Paid Advertising Costs

So you’re asking about the cost of paid advertising for a SaaS company. It's the first question everyone asks, and honestly, it’s the wrong one. Asking "how much will it cost?" is like asking "how long is a piece of string?". It shows you’re thinking about advertising as an expense to be minimised, not an investment to be maximised. The real question isn't "how low can my cost per lead go?", but "how high a cost can I afford to acquire a customer who's going to stick around and make me a profit?".

If you get this bit wrong, nothing else matters. You can have the best ads in the world, but if you don't know your numbers, you're just gambling. You'll either be too timid and miss out on growth, or too aggressive and burn through your cash before you know what's hit you. We need to shift your thinking from cost-cutting to value-creation. Before you spend a single pound on an ad, you need to understand the fundamental economics of your own business. It's not the sexy part of marketing, but it's the only part that actually matters.

The Real Question: What's a Customer Actually Worth to You?

Forget cost per click for a minute. Let’s talk about Customer Lifetime Value, or LTV. This is the total amount of profit you can expect to make from a single customer over the entire time they use your software. If you don't know this number, you are flying blind. It's the bedrock of any successful ad campaign.

Calculating it isn't black magic, it's just a bit of simple maths. You need three bits of information:

• -> Average Revenue Per Account (ARPA): How much does a typical customer pay you each month?
• -> Gross Margin %: What's your profit margin on that revenue? Be honest here.
• -> Monthly Churn Rate: What percentage of your customers cancel their subscription each month?

The calcluation is straightforward. It looks like this:

In this example, every customer you sign up is worth £4,800 in gross margin to your business over their lifetime. Now we have a number to work with. A healthy business model often aims for an LTV to Customer Acquisition Cost (CAC) ratio of at least 3:1. This means for our example customer, you can afford to spend up to £1,600 (£4,800 / 3) to acquire them and still have a very healthy business.

Suddenly, worrying about a £1.50 click seems a bit silly, doesn't it? If your sales process converts 1 in 20 trial signups into a paying customer, you can afford to pay up to £80 (£1,600 / 20) for a single trial signup. This is the maths that unlocks intelligent, aggressive growth. Without it, you're just guessing.

Alright, But What Should I Actually Expect to Pay Per Conversion?

Now that we’ve got the proper context, we can talk about the numbers you might see on the ad platforms. Tbh, the cost per conversion – whether that’s a trial, a demo request, or a signup – varies massively. It's influenced by your industry, your targeting, your offer, your ad creative, and the country you're targetting.

Let's break it down into some rough ballpark figures. I’ve seen this play out across dozens of SaaS campaigns. For something simple like a newsletter signup or a free tool registration, the costs are lower. For a proper B2B software trial, they're higher.

Here’s a look at what we typically see. Remember, these are just averages. We've had clients blow these numbers out of the water, both in good ways and bad. I remember one B2B software client where we got them 4,622 registrations at just $2.38 each on Meta, which is exceptional. On the other hand, a highly specific medical SaaS we worked with started at a £100 cost per user before we got it down to £7. It all depends.

Why the huge ranges? Developed countries like the UK, US, and Australia are more competitive. Clicks cost more. But the lead quality is often higher and LTV is greater. Developing countries can give you cheap clicks and signups, but you have to be careful about the quality. We often run seperate campaigns for different country tiers to control the budget and qualify the traffic properly.

Which Ad Platform Should You Even Be On?

Chucking money at the wrong platform is the fastest way to burn it. The right choice depends completly on one thing: how does your ideal customer look for a solution like yours?

Are they actively searching for a solution? -> If someone wakes up and thinks "I need a new project management tool", they go to Google. This is high-intent traffic. You're not trying to create demand; you're capturing it.

• -> Google Search Ads: This should probably be your first port of call. You bid on keywords that your ideal customer is typing in right now. Think "best crm for small business" or "alternatives to salesforce". It's direct, it's measurable, and it targets people who already have the problem you solve. You need to do proper keyword research, but this is often the most reliable channel for B2B SaaS.

Are they NOT actively searching for a solution? -> This is harder. You need to interrupt their day and convince them they have a problem they might not even be aware of. This is where social media comes in.

• -> LinkedIn Ads: This is the go-to for targeting specific B2B decision-makers. You can target by job title, company size, industry, specific company names... it's incredibly powerful. You can get right in front of the Head of Sales at a 100-person tech company. The downside? It's expensive. Really expensive. We ran a campaign targeting B2B decision makers and got a $22 Cost Per Lead, which was great for that client, but you need the budget and the LTV to support it. It's not for the faint-hearted.
• -> Meta (Facebook/Instagram) Ads: People will tell you this is just for B2C, but they're wrong. We've had massive success for B2B SaaS on Meta. I remember one campaign where we got 1,535 trials for a B2B client. The key is that the targeting is less direct. You can't target by 'CEO', but you can target interests like 'SaaS', followers of industry publications, or people who have job titles like 'small business owner'. The real power comes from building lookalike audiences from your existing customers or website visitors. Meta's algorithm is scarily good at finding people similar to your best customers. It's often much cheaper than LinkedIn, but you need to be smarter with your audience building.

Why Your Targeting is Probably Rubbish

Let's be brutally honest. Most SaaS companies have terrible ad targeting. They use demographic profiles that are completely useless. "Companies in the IT sector with 100-500 employees" tells you nothing. It leads to generic ads that speak to no one and gets you ignored.

You need to stop thinking about demographics and start thinking about nightmares. What is the specific, urgent, expensive problem that keeps your ideal customer up at night? Your ICP isn't a job title; it's a problem state. The Head of HR isn't just a persona; she's terrified of losing her best talent because their onboarding process is a shambles. The VP of Finance isn't just looking for accounting software; he's worried about a compliance audit revealing a massive mistake that could cost him his job.

Once you've identified that nightmare, you can find them. Where do they hang out online? What podcasts do they listen to on their commute? What newsletters do they actually read? Are they in specific Facebook groups? Do they follow certain influencers on LinkedIn? This is the intelligence that fuels a winning ad campaign. Don't spend a penny until you've done this work.

Then, when you go to build your audiences on a platform like Meta, you need a proper structure. I see so many accounts that are just a chaotic mess of random audiences. You should think about it like a funnel.

Start by testing detailed targeting to feed your pixel with data. As soon as you have enough conversions (at least 100, but more is better), create lookalike audiences. The lookalike of your paying customers is gold dust. Then, systematically retarget people at each stage of the funnel. This structured approach is how you turn cold traffic into paying customers efficiently.

Your Offer is Weak. Delete "Request a Demo".

This might be the most important point in this entire article. The number one reason SaaS ad campaigns fail is a weak offer. And the weakest, most arrogant offer in all of B2B is "Request a Demo".

Think about it. You're asking a busy, important person to book a slot in their calendar just to be sold to. It's high friction and low value. It immediately positions you as just another vendor begging for their time. It's a conversion killer.

Your offer's only job is to provide a moment of undeniable value. An 'aha!' moment that makes the prospect sell themselves on your product. For a SaaS company, you have an unbelievable advantage here: your product.

The gold standard offer is a free trial (no credit card required) or a genuinely useful freemium plan. Let them use the actual software. Let them experience the transformation for themselves. When the product proves its own value, the sale becomes a formality. You're not generating marketing qualified leads (MQLs) for a sales team to chase; you're creating product qualified leads (PQLs) who are already convinced.

I saw this with a B2B accounting software client once. Their website was all about "privacy" and had a "book a demo" button. Ads were failing spectacularly. Why? Because businesses don't want to switch their entire accounting system on a promise. They need to try it. Their competitors were offering free trials and big discounts. We helped them restructure their offer around a free trial, and it changed everything. The offer is everything. If your product is good, let it do the selling.

How to Scale Without Your Costs Spiralling

Okay, so you've got your LTV, you've chosen your platform, your targeting is sharp and your offer is a no-brainer free trial. Your campaigns are working and you're getting signups at a good price. What now? You try to scale up the budget, and your CPA shoots through the roof. This is a normal and very common problem.

You can't just pour more money in and expect the same results. You've likely saturated the core audience that's easiest to convert. Scaling requires a more sophisticated approach. Here's how we tackle it:

1. Improve Your Funnel: Before you even touch the ads, look at your website. Can you improve your landing page conversion rate? A small bump from 5% to 7% means you get almost 50% more signups from the same traffic and ad spend. This is the cheapest way to scale. Get a professional copywriter. A/B test your headlines.

2. Improve Your Ads: Never stop testing. You need a constant stream of new ad creatives and copy angles. What worked last month might not work next month. Test new formats. We've seen some of our SaaS clients have massive success with user-generated style videos. Test different messaging. Keep testing new audiences and lookalikes. There are always more pockets of customers to find.

3. Expand to Other Platforms: If you've maxed out what you can do on Meta, it might be time to take your winnings and build out a proper campaign on Google Search. Or, if you have the LTV to support it, start seriously experimenting with LinkedIn. Tapping into a new platform gives you access to a completely different pool of potential customers.

4. Switch to ROAS Optimisation: Once your campaigns have enough conversion data, you can switch the bidding strategy from optimising for conversions to optimising for Return On Ad Spend (ROAS). You tell the platform "I want to get at least a 3:1 return", and the algorithm will work to maintain that while you increase the budget. It takes discipline and data, but it's how you scale to big numbers.

Scaling isn't a single action, it's a continuous process of optimisation across your entire marketing and sales funnel. It takes expertise and relentless testing. As I mentioned earlier, we worked on a software campaign that started with a £100 CPA. Through this exact process of testing, optimising, and refining, we brought that down to just £7. That's the difference between a failing company and a rapidly growing one.

So, What's the Plan?

Getting paid advertising right for a SaaS business is a complex process. It's not about finding a magic "cost per signup" number. It's about building a predictable, scalable growth engine based on a deep understanding of your own business economics. It requires a strategic approach, not just tactical tweaks. I've detailed my main recommendations for you below:

As you can probably tell, this is a lot more involved than just setting a budget and letting ads run. It's a full-time job that requires a specific skillset, a deep understanding of platform mechanics, and the experience to know which levers to pull and when.

This is where getting expert help can make a huge difference. An experienced consultant or agency has been through this process hundreds of times. We can help you avoid the common, expensive mistakes that most SaaS companies make when they start with paid ads. We can help you build this growth engine faster and more efficiently than you could on your own, letting you focus on what you do best: building a great product.

If you've read this far and feel a bit overwhelmed, or you're already running ads and not seeing the results you want, we offer a free, no-obligation 20-minute strategy session. We'll have a look at your business, your goals, and your current campaigns, and give you some actionable advice on what we'd do to improve things. It's a chance to get an expert pair of eyes on your advertising and see if we might be a good fit to help you grow.