We're cranking along with organic customer acquisition nicely at RescueTime and have decided to do some experimentation with AdWords (both search and the slightly scary "content network"). We have a pretty good understanding of the lifetime value of a customer, so ideally we could spend X in AdWords and acquire enough customers to justify the expense. Has anyone personally experienced a successful AdWords campaign for a SaaS offering (or heard of one)?
As you can probably tell from the domain name, I have good things to say about AdWords. (My version of the same story, with the fiddly bits not filed down by marketing, is here:
and elsewhere on that blog. Anything you'd like to bring up in particular?
(Incidentally: I mainly use AdWords to drive trial downloads, and of they some percentage convert to purchase. This is subtly different from the SAAS use to get signups to the free plan and then hope to upsell them later, but it isn't exactly an unconnected use case. Your main issue, similar to one of mine, is if someone is out-monetizing you on a related use of your keywords you can sometimes get priced out of existence unless you get tricky.)
Adwords works ($5 mill rev per year), but it's about what you put in the ad and where the prospect lands.
Put yourself in that person's seat.
Are they trying to track employee's time consumption?
Are they trying to increase employee productivity?
How fast do they need the service?
What is their intelligence level (will they click the big shiny blue button)?
What about their budget (did they search "cheap time tracking software" or "best time tracking software")?
Will they sign up using a boring form that does not seem to have something of value on the other side of it?
Take this all into consideration when choosing keywords (as well as negative keywords). Writing ad copy (which also should be "relevant" to your keyword) and designing the landing page.
I highly recommend A-B testing.
A GREAT example of this is: http://rushmypassport.com (search "expedited passports", look at the ad copy, plus organic placement, landing page with actions + trust inducing images, the click through to a form that seems like it's the SECOND step in a 3 step process and product specific info)
Certainly it works (for both Google and the many people who advertise). But that doesn't mean it works for EVERYONE. I'm sure there are things you could sell/offer that adwords would be a total bust for. I was/am concerned about SaaS/SMB software like RescueTime underperforming compared to, say, lamps or Wiis.
I used to have some with a business I ran. It seemed the key was to constantly experiment with keywords and ad text. Try to think of a lot of smaller keywords where you'll have less competition.
For instance with Draftmix, we've been running ads against the names of some athletes who every fantasy player might be Googling for injury reports but who no normal sports fan would ever care about.
It's been my experience that image ads on the content network are a favorable way to raise awareness about services that people may not actively search for on Google. The search network, on the other hand, is best for advertising those products and services people know about (e.g. pittsburgh pizza, online productivity software).
Of course Google will say (and I agree) the optimized campaign will include components of both content and search, but it might be useful to consider the different types of traffic you'll get from each, and where you should place the bulk of your effort. I've preferred the content network which gets me more traffic with only a slight compromise in conversions (measured by form sign-ups).
Also, bear in mind that you should create separate, manageable ad campaigns for both networks because Google uses different targeting information for placement in each.
Aside: I'm working on my online advertising chops and should have my Google Advertising Professional certification in a few weeks. If you want to talk to me drop me a line (brian [at] firstblogmedia.com). I'm happy to chat with you guys if it means I'll get some early experience dealing with client questions.
I have run some more or less successful Adwords Campaigns.
It is absolutely possible to make money with them, but it requires a lot of testing. You need to run different ads, at different prices, on different keywords.
After 2-3 Weeks you can find out that while certain keywords generate more clicks, people who clicked on those keywords stay on the site much less long than those who clicked other, less popular keywords, etc.
As with Rescuetime I think it could be tough to make it worth while. The product is so great I believe you'll get much more bang for the buck with mouth 2 mouth recommendation. I've already told a couple about it ;)
Think about how much a (non paying) user is worth. (Multiply the conversion rate times the worth of a paying user). That number will tell you how much you should be paying per conversion from Adword Click to free user.
I just checked, you pay an average of 10$ for the keywords rescuetime would be interested in.
If you achieve a conversion rate of 10% for somebody who clicks your ad and then signs up to the service (which is pretty good in general), you're paying 100$ for a free user.
You'd have to have extremely good conversion rates for this to be worth it.
We've experimented with AdWords several times at HubSpot (a B2B SaaS business).
Although they "worked" (in terms of generating some traffic), this particular channel for lead generation was one of our most effective.
We do much better with leads generated organically through inbound marketing. These include leads through our blog, free web tools and social media sites.
We stopped our AdWords campaigns because they were essentially, just too expensive for us compared to other vehicles for getting leads and customers.
As many have posted below there is more to Adwords than just the auction - creativity in forming the ad, landing page, keyword list (yes get innovative, target tail etc) matters.
But when you mention of success stories I would assume there are 3 main aspects to measure your spend against:
1. direct revenue: actual money
2. quality of users: conversions, usage stat, repeat users/loyalty
3. scale: traffic volumes
Most startups when they launch do it for #3 traffic, mid way focus #2 tune conversions, if they are still signed up #1 happens.
It is hard to represent or measure #2 and #3 in monetary terms. Yet every campaign value should be weighed taking into account of usage and traffic generated along with direct revenue. If you can figure out your formula - and see if adwords cost is less than value generated - it is a success. Good thing with adwords is it is a knob, once the wheel is set to operate at positive levels its easy to scale in terms of volumes by increasing spend.
In terms of when to start doing PPC I would suggest work backwards look at your conversion rates -
lets say for a random set of y number of users 2% sign up and generate x amount of revenue. So effectively you are fine spending x * 2 amount to get this set of y users.
Cost of acquisition = y/x with given conv rate.
If you can set up your adwords campaign to get a click at this rate it is promising. Of course there are complexities as conv rate would be different (mostly better) with adwords campaign than organic users. Revenue generate x is tough to measure with indirect revenue aspects - loyalty, usage, traffic etc and has to be dealt individually.
With Adwords long tail keywords seem to be an ok bet. I hope you are using different landing page for small business, enterprise and personal with an incentive and a lead capture form (just in case someone wants to leave).
Buying cheap traffic can convert better than Adwords sometimes, specially if you have a free product.
Affiliate networks are great as well. Although they are not sexy, sexy companies such as Apple use them all the time.
Asking the bloggers to use the proper anchor text will help as well. Most of these blogs have a high PR and they will use your company name as an anchor text which is pointless. The anchor text should be those keywords that you target.
We have experimented with it a bit at www.nextproof.com. I wouldn't call it a "success", mainly because we've always had better conversions from (a) ads purchased on industry forums/blogs and (b) organic search referrals (we have decent serp placement and are getting better).
All in all, I just don't know if it's worth it. I will admit, however, that we didn't create a solid landing page. That definitely could have had an effect.
http://www.google.com/adwords/conversionoptimizer/bingocard....
As you can probably tell from the domain name, I have good things to say about AdWords. (My version of the same story, with the fiddly bits not filed down by marketing, is here:
http://kalzumeus.com/2007/11/10/conversion-optimizer-adwords...
and elsewhere on that blog. Anything you'd like to bring up in particular?
(Incidentally: I mainly use AdWords to drive trial downloads, and of they some percentage convert to purchase. This is subtly different from the SAAS use to get signups to the free plan and then hope to upsell them later, but it isn't exactly an unconnected use case. Your main issue, similar to one of mine, is if someone is out-monetizing you on a related use of your keywords you can sometimes get priced out of existence unless you get tricky.)