SaaS Launch: The Real Cost of Paid Advertising

One of the first questions I get from SaaS founders is always some variation of "what's a realistic budget for our launch?" or "how much do paid ads cost?". And my answer is always the same: you're asking the wrong question entirely. It's a bit like asking "how much does a car cost?". A battered Ford Fiesta is a few hundred quid, a brand new Bugatti is millions. Both get you from A to B. The real question isn't about the cost, it's about the value and what you're trying to achieve.

Asking about the 'cost' of an ad implies you see it as an expense line on a spreadsheet. This is the mindset that leads to burning cash with nothing to show for it. You need to see advertising as an investment in acquiring customers. The proper question is: "How much can I profitably afford to spend to acquire a new customer?". Get that number right, and everything else falls into place. This guide will walk you through how to figure that out, how to structure your launch spend, and how to avoid the common pitfalls that sink most SaaS ad campaigns before they even start.

So, how do I figure out what I can afford to spend?

Before you spend a single penny on an ad, you need to understand two numbers: Customer Lifetime Value (LTV) and Customer Acquisition Cost (CAC). LTV is the total profit you expect to make from a single customer over the entire time they use your product. CAC is what you pay to get that customer. The golden rule is your LTV should be at least 3 times your CAC. An LTV:CAC ratio of 3:1 is healthy. 4:1 is great. 5:1 is exceptional.

Most founders skip this step. They pull a budget out of thin air, throw it at some ads, see a high cost per lead, panic, and turn everything off, concluding "paid ads don't work for us". That's nonsense. What they mean is "we didn't do the maths to understand if our campaigns were actually profitable in the long run".

Let's calculate it. It's not that complicated.

Average Revenue Per Account (ARPA): How much does a customer pay you per month on average?
Gross Margin %: What's your profit margin on that revenue after accounting for costs like servers, support, etc.?
Monthly Churn Rate: What percentage of customers cancel their subscription each month?

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

For example, if your ARPA is £100, your gross margin is 80%, and your monthly churn is 5%:

LTV = (£100 * 0.80) / 0.05
LTV = £80 / 0.05 = £1,600

With an LTV of £1,600, and aiming for a 3:1 ratio, you can afford to spend up to £533 to acquire a single new customer. Suddenly that £50 lead from LinkedIn doesn't seem so expensive if you know your sales team can close 1 in 10 of them. This is the math that unlocks growth. Without it, you're flying blind.

To make this easier, I've built a simple calculator for you below. Play around with your own numbers and see what your LTV and target CAC are. This is your north star for any paid advertising you do.

Where should you actually spend your launch budget?

Okay, so you've done the maths and you know your target CAC. Now, where do you find these customers? For a SaaS launch, there are really three main battlegrounds: Google Ads, Meta (Facebook/Instagram) Ads, and LinkedIn Ads. Each has a very different role to play and comes with very different costs.

Google Ads: The Intent Catcher. This is where you find people who are already looking for a solution to a problem your SaaS solves. They're typing things like "best project management tool for agencies" or "how to automate invoicing" into Google. This is 'high-intent' traffic, and it's often the best place to start because the audience is pre-qualified. They have a pain, and they're actively looking for a painkiller. The downside? It can be competitive and expensive, espescially for popular keywords. We've managed campaigns for SaaS clients where a click costs upwards of £10-£15 for very specific B2B terms.

Meta Ads: The Demand Creator. On Facebook and Instagram, nobody is looking for your software. They're looking at pictures of their mate's holiday in Spain. Your job here is to interrupt them with a message so compelling it makes them stop scrolling. This is about creating demand, not capturing it. It's brilliant for reaching niche audiences based on their interests (e.g., people who follow certain industry leaders, use competitor software, or have job titles like 'small business owner'). It's generally cheaper per click than Google, but the leads are colder. You need a really strong offer to make it work. For instance, one B2B SaaS campaign we ran generated over 4,622 registrations at just $2.38 each, proving it can be incredibly cost-effective if done right.

LinkedIn Ads: The B2B Sniper Rifle. This is the most expensive platform by a mile, but its targeting is unparalleled for B2B. You can target people by exact job title, company size, industry, seniority, and more. If you need to get your message in front of 'VPs of Engineering at Fintech companies with 50-200 employees in London', LinkedIn is the only place to do it reliably. But you'll pay for the privilege. Clicks can easily be £5-£10, and leads can range from £20 to over £100. I remember one campaign we ran that generated leads from B2B decision makers at about $22 CPL, which was a fantastic result for that specific software client.

To help you decide, here's a simple flowchart. Be honest with yourself about your product and market when you go through it.

Your biggest cost lever isn't your bid, it's your offer

This is probably the most important point in this entire guide. You can have the most perfectly targeted campaign in the world, but if your offer is rubbish, you'll burn through cash and get nowhere. The number one mistake I see B2B SaaS companies make is making their primary call to action "Request a Demo".

Let's be brutally honest. Nobody wants to request a demo. It's a high-friction, low-value proposition for the user. It means they have to schedule a time, sit through a 30-minute sales pitch, and get chased by a sales rep for the next six weeks. It's an arrogant CTA that assumes your prospect has nothing better to do. And it positions you as just another vendor trying to sell something.

Your ad costs are a direct reflection of how compelling your offer is. A bad offer means a low click-through rate and an even lower conversion rate, which tells the ad platform algorithms that your ads are irrelevant. They then punish you with higher costs.

A great offer, on the other hand, provides immediate value and removes friction. It makes the prospect sell themselves on your solution. What does a great offer look like for a SaaS launch?

• A truly free trial (no credit card). This is the gold standard. Let them use the product. Let them experience the "aha!" moment where they see how it solves their problem. A user who has seen value for themselves is a Product Qualified Lead (PQL), and they are infinitely more valuable than a Marketing Qualified Lead (MQL) who just filled out a form.
• A freemium plan. Similar to a free trial, but it's free forever for a limited set of features. This is a fantastic way to build a user base and create a pipeline of future paying customers.
• A valuable tool or resource. If you can't offer a free trial, can you bottle up a piece of your expertise into something useful? A free, automated website audit tool. A calculator. A template. A data-driven report. Something that solves a small, real problem for them for free to earn you the right to talk about solving their bigger problems.

We've worked with SaaS clients where simply switching the call to action from "Request a Demo" to "Start Your Free Trial" has cut their Cost Per Acquisition in half. I recall one memorable case with a medical job matching platform where we helped overhaul their funnel and offer, which was a key part of reducing their CPA from a staggering £100 down to just £7. That's the power of a good offer. Fix your offer before you even think about your ad copy or targeting.

How should I structure my launch budget?

Okay, let's get down to brass tacks. You know your target CAC, you've chosen your starting platform, and you've got a compelling offer. How much should you actually spend?

For a launch, you need to think in phases. The first 90 days are all about learning. You're not aiming for a 5:1 ROAS out of the gate. You're buying data. You're figuring out which messages resonate, which audiences convert, and which parts of your funnel are leaky. I usually recommend a minimum ad spend of £1,500-£2,000 per month for the first three months. Anything less than that and you won't get data back fast enough to make smart decisions. You'll be stuck in a cycle of guessing.

Here's how I'd structure it:

This phased approach prevents you from blowing your entire budget on unproven ideas. You invest in learning first, then methodically build on what works. This is how you build a sustainable growth engine, not just run a one-off campaign. Getting this right is often the difference between a successful launch and a failed one, which is why many founders look for help with a clear roadmap for scaling their paid media effectively from the start.

Okay, but what are some real-world costs?

Theory and frameworks are great, but sometimes you just want to see some real numbers. The truth is, costs vary massively by niche, platform, and offer. But from some of the campaigns we've run for various SaaS clients, here's a taste of what's possible:

• 5,082 Software Trials at $7 per trial. We achieved this on Meta Ads for a software tool with broad appeal. The offer was a simple, no-card free trial, which helped drive the low cost.
• 1,535 trials for a B2B SaaS. This was also on Meta. The cost per trial was higher than the above example, but still well within the client's target CAC because their LTV was in the thousands.
• 4,622 Registrations at $2.38 per registration. As I mentioned earlier, this result was for a B2B software tool with a freemium model. Again on Meta, this shows how a frictionless offer can lead to extremely low costs, even in a B2B context.
• B2B decision-makers at $22 Cost Per Lead (CPL). If you recall the campaign I talked about, this was on LinkedIn Ads targeting a very specific, senior audience. The CPL was much higher, but the quality of the leads was exceptional, and the deal size made it highly profitable.

The key takeaway isn't the specific number, but the pattern. Lower friction offers on broader platforms like Meta can get you volume at a lower cost. Higher friction offers (even just a lead form) on specific platforms like LinkedIn will cost more, but the leads can be of higher quality. Your job is to find the blend that works for your LTV and sales process. You need to understand the real costs of advertising in the UK market to set realistic expectations.

Final Thoughts: Agency vs. In-House

The final "cost" to consider is who is actually going to do all this work. You have two main options: hire someone in-house or partner with an agency. A junior in-house marketer might cost you £30k-£40k a year, but they'll likely lack the strategic experience to navigate a launch effectively. A senior, experienced paid ads manager will cost £60k+ and will be hard to find and recruit.

An agency gives you access to a team of specialists for a monthly retainer, which can often be less than the cost of a single junior hire. You get strategists, copywriters, and ad managers who have done this dozens of times before. They already know the benchmarks, they know which mistakes to avoid, and they can get you to profitability much faster. The crucial thing is to find the right partner. Don't just look for someone who can "run ads". Look for a partner who understands SaaS, who starts the conversation with LTV and CAC, and who has case studies to back up their claims.

Ultimately, the cost of paid advertising for your SaaS launch isn't a simple number. It's a function of your business model, your offer, your audience, and your strategy. Get the foundations right, and it will be the most powerful growth lever you have. Get them wrong, and it'll be a very expensive lesson.

Navigating this can be a lot for a founder to handle on top of everything else. If you'd like an expert pair of eyes on your launch plan, we offer a completely free, no-obligation strategy session. We can look at your numbers, your offer, and help you build a realistic roadmap to acquire your first 100 customers with paid ads. Feel free to get in touch if you think that would be helpful.