Performance Advertising for SaaS Businesses – Pros, Cons, and Alternatives

What are the advantages of performance advertising?

So we’ve seen what performance-based advertising is, but is it something you should use to promote your SaaS business? Let’s take a look.

• It’s cost-effective. With performance-based advertising, you only pay when a prospective customer carries out an action. This means you’re more likely to get the results you want.

• It’s simple to measure. Clicks, lead generation, and sales are straightforward to track and monitor. This means it’s easy to see how your ad campaigns are doing, calculate return on ad spend (ROAS), and make changes that deliver the best results.

• It’s highly targeted. Most PPC platforms let you target prospective customers with laser precision – from location and age to hobbies and interests. This means your ads are more relevant and more likely to drive conversions.

• It’s flexible. PPC platforms offer a range of different ad types and placements. As a result, you can create ads that represent your brand and appeal to viewers.

• It’s scalable. You can quickly scale performance-based advertising campaigns up and down, meaning these ad campaigns can grow with your business requirements.

What are the disadvantages of performance advertising?

While performance advertising is a fantastic option, it’s not for everyone. Here are some of the reasons why this might be the case.

• It can be competitive. As performance-based advertising is easy to use and accessible, many businesses use it. As a result, this type of advertising can be competitive, making it harder to be seen and stand out.

• It’s not ideal for brand awareness. Performance-based advertising is generally best at targeting customers who have heard of your brand and are ready to buy. It can be less effective for brand awareness as competition is high, and it’s harder to capture people’s attention.

• It can be susceptible to click fraud. Click fraud is when people (or bots) click on PPC ads without the intention of buying, meaning you pay more. While click fraud is rare and performance-based advertising platforms are taking steps to mitigate against it, it can still be frustrating.

What alternatives to performance-based advertising are there?

So, if performance-based advertising isn’t an option, what other ad formats can you use? Here are some of our thoughts.

• Brand advertising. This is the opposite of performance-based advertising. This is when you focus on building brand awareness and nurturing prospective customers until they’re ready to buy. For example, if you’re running display ads with brand awareness in mind, they would fall under this category.

• Native advertising. This is when you create non-intrusive paid-for content, for example, an editorial or sponsored article on a website or news platform.

• Influencer marketing. This is when you work with a content creator, paying them to promote your SaaS product to their audience.

Is performance advertising the right choice?

Choosing the correct type of ads to promote your SaaS business is challenging. You want to make sure you target the right customers, drive traffic to your website, and ensure a healthy ROAS.

Is performance-based advertising right for you? This type of advertising is generally best if you’re aiming for customers at the bottom of the sales funnel, ones that are ready (or nearly ready) to convert.

If you’re aiming to raise brand awareness with customers at the top of the sales funnel, online advertising can work, but other types of marketing might be better.

The answer ultimately depends on what you sell, your target audience, your budget, and your overall marketing goals.