Let’s face it – figuring out how much money to throw at Google Ads keeps many SaaS founders up at night. I’ve been there myself, staring at spreadsheets at 2 AM, wondering if I’m flushing cash down the digital drain or missing out on growth opportunities.
After working with SaaS companies for over a decade (and making plenty of expensive mistakes along the way), I’ve learned that setting your SaaS Google Ads budget isn’t about following some industry-standard percentage. It’s way messier than that – and surprisingly personal to your business.
The Weird World of SaaS Marketing in 2025
Before I share specific numbers, we need to acknowledge something: SaaS marketing is just… different. Here’s why that matters when you’re figuring out how much to spend on Google Ads:
- The never-ending dating phase: Most SaaS sales cycles feel like extended courtships. One of my clients spent 8 months nurturing a lead before signing a $120K contract. Your Google Ads spending for SaaS needs patience baked into it.
- The beautiful math of recurring revenue: Unlike selling one-off products, each customer keeps paying you (hopefully for years). This completely changes the calculus of what you can afford to spend on acquisition.
- Nobody impulse-buys enterprise software: Your prospects need education, reassurance, and sometimes therapy before committing to your solution. Your SaaS Google Ads budget needs to feed this educational journey.
I remember chatting with the CMO of a mid-sized SaaS company at a conference last year. She told me, “We spent six months thinking our Google Ads were failing because we were measuring against e-commerce benchmarks. Once we adjusted our timeframe expectations, everything changed.” Turns out they weren’t failing – they just needed to wait for the longer sales cycle to play out.
According to what I’ve seen and the conversations I’ve had with other SaaS marketers, most companies end up dedicating about 30-40% of their marketing budget to paid acquisition, with Google Ads usually eating the biggest slice of that pie.
The Numbers That Should Actually Drive Your Budget
Let’s cut through the BS and talk about the metrics that really matter for your SaaS Google Ads budget:
Customer Acquisition Cost (CAC): The Number You Can’t Hide From
Your CAC is like your cholesterol level – ignore it at your peril. I learned this lesson the hard way when I worked at a startup that was spending $5,000 to acquire customers worth $3,000 in lifetime value. You can guess how that story ended.
Most healthy SaaS businesses try to recover their CAC within a year. I worked with a company selling email marketing software at $200/month where customers typically stuck around for 25 months. With an LTV of $5,000, they set their maximum CAC at $1,650 using a 3:1 LTV:CAC ratio. This directly informed how much they could spend on Google Ads per new customer.
Conversion Rates: The Frustrating Funnel Math
I hate to break it to you, but you need to understand your conversion rates at each stage of your funnel:
- What percentage of ad clicks become leads?
- What percentage of leads start trials?
- What percentage of trials become paying customers?
Here’s a real example from a client I worked with last year:
- They were paying about $4.50 per click
- About 8% of clicks converted to leads (so $56 per lead)
- About 18% of leads started a trial ($311 per trial)
- About 22% of trials converted to customers ($1,414 per customer)
When we realized their target CAC was $1,200, we knew we had a problem. We either needed to improve conversion rates or adjust expectations about Google Ads spending for SaaS.
Lifetime Value: The Number That Changes Everything
I can’t tell you how many SaaS founders I’ve met who have no idea what their customers are actually worth over their lifetime. Without this number, you’re just guessing at what you can afford to spend.
One of my clients discovered their average customer stuck around for 3.5 years, not the 2 years they had estimated. This single realization allowed them to increase their SaaS Google Ads budget by almost 40% while maintaining profitability.
Getting Started: Back-of-the-Napkin Budget Math
Alright, let’s get practical. Here’s how to figure out your initial Google Ads spending for SaaS:
Start With Your Growth Target
What’s your revenue goal? I was working with a SaaS startup targeting $300,000 in new ARR. With an average customer value of $6,000/year, they needed 50 new customers.
Apply Your Conversion Rates (or Educated Guesses)
If you don’t have your own data yet, you’ll need to make some educated guesses. I typically see SaaS companies with numbers roughly like these:
- Click-through rates around 2-3%
- Landing page conversion rates of 3-5%
- Trial-to-paid conversion rates of 20-30%
But honestly, I’ve seen enormous variation here. One company I advised had a mind-blowing 12% landing page conversion rate because their offer was just that compelling, while another struggled to get above 1.5% despite endless A/B testing.
Work Backward From Your Customer Goal
Let’s say you need 40 new customers:
- At a 25% trial-to-customer rate, that’s 160 trials
- At a 15% lead-to-trial rate, that’s about 1,070 leads
- At a 7% click-to-lead rate, you need roughly 15,285 clicks
- At $4 per click, that’s about $61,140 in total, or $5,095 monthly
This gives you a starting point for your SaaS Google Ads budget. Is it perfect? Not even close. But it’s a rational beginning.
Where Should Your Budget Actually Go?
Here’s where most articles give you clean percentage breakdowns. But in real life, it’s messier. Still, here’s a framework I’ve found helpful:
Brand Campaigns: The No-Brainer Investment
I’ve never understood companies that don’t bid on their own brand terms. It’s literally your highest-converting, lowest-cost traffic. I had a client who stopped bidding on their brand name as an experiment, and their competitor swooped in immediately.
Allocate 15-20% of your budget here, but track it separately since it can make your overall campaign metrics look artificially amazing.
High-Intent, Bottom-of-Funnel Campaigns
These campaigns target people who are ready to buy – searches like “best project management software” or “CRM comparison.”
These keywords are expensive ($8-20 per click in competitive niches), but they convert well. I usually recommend allocating 40-50% of your SaaS Google Ads budget here, especially when you’re starting out.
Mid-Funnel Education Campaigns
These target prospects who know they have a problem but aren’t searching for specific solutions yet. Keywords like “how to improve sales pipeline visibility” or “customer support efficiency tips.”
They’re less expensive but also convert more slowly. I typically suggest 20-30% of budget here once you’ve got your bottom-funnel campaigns performing well.
Top-of-Funnel Awareness Campaigns
I’m going to be honest – I rarely recommend that early-stage SaaS companies start here. I’ve seen too many burn through cash with nothing to show for it. Once you’ve got a solid foundation with your other campaigns, then you can experiment with 10-15% of your budget here.
Real SaaS Companies, Real Budgets
Let me share some actual examples of how companies approach their SaaS Google Ads budgets:
The Bootstrapped Startup
My friend Jamie runs a small customer feedback tool with about $40K in MRR. His average customer pays $1,100/year, and he’s determined his acceptable CAC is $550.
Jamie spends about $4,500 monthly on Google Ads (roughly 11% of MRR), focusing almost exclusively on bottom-funnel keywords and retargeting. He’s obsessive about tracking and has cut his CAC from $780 to $490 over six months by continuously refining his campaigns.
Jamie told me, “I don’t care what percentage of revenue I’m spending. I care that I’m buying customers for less than they’re worth.”
The VC-Backed Growth Machine
I consulted for a Series B company selling marketing automation software. They were at about $400K MRR with an average customer value of $9,000/year.
They were spending $65,000 monthly on Google Ads (around 16% of MRR) and maintaining a CAC of $2,700, well within their target. Their approach was much more diversified, with campaigns across all funnel stages and heavy investment in content assets to improve Quality Scores.
Their CMO told me, “We’re not trying to be profitable on first-year value. We know our customers stick around for years, so we’re playing a longer game.”
The Established Enterprise Player
A large security software company I worked with ($2.5M+ MRR) took a completely different approach. With an average contract value of over $100K, they were spending about $200K monthly on Google Ads – but that represented just 8% of their MRR.
They focused heavily on thought leadership content and competitive terms, knowing their sales team needed just a few qualified leads each month to hit their targets. They were comfortable with a $22,000 CAC because their customers typically stayed for 5+ years.
Making Your Budget Work Harder Over Time
Your initial SaaS Google Ads budget is just a starting point. The real magic happens when you optimize:
Fix Your Damn Tracking First
Sorry for the bluntness, but I can’t tell you how many companies I’ve worked with who were making budget decisions based on garbage data. Before you do anything else, make sure your tracking is solid.
Implement Google Analytics 4 properly, set up conversion tracking, and consider tools like HotJar to understand user behavior. One client discovered they were getting plenty of trial signups that weren’t being tracked correctly, completely changing their perception of campaign performance.
Obsess Over Quality Scores
This is the secret weapon most SaaS companies ignore. I’ve seen clients cut their CPC by 30-40% just by improving Quality Scores from 5/10 to 8/10. This means:
- Creating super relevant landing pages (not just sending everyone to your homepage)
- Writing ads that directly address the search query
- Keeping your account structure tight and focused
Test Different Bidding Strategies (But Don’t Get Fancy Too Soon)
I usually recommend starting with manual CPC until you have enough conversion data, then experimenting with Target CPA or Target ROAS. One marketing analytics SaaS I worked with saw their cost per lead drop by 23% after switching to Target CPA, but they needed about three months of data before Google’s algorithms got smart.
Audit Ruthlessly and Regularly
Every month, look at:
- Which keywords are eating budget without converting
- Which ads have the highest conversion rates
- Which landing pages perform best
One client found that 72% of their budget was going to keywords generating only 18% of their conversions. By cutting those keywords and reallocating the budget, they increased conversions by 40% overnight without spending an extra dime on their SaaS Google Ads budget.
Mistakes I’ve Made (So You Don’t Have To)
Learn from my expensive failures:
Focusing Only on the Bottom of the Funnel
Early in my career, I pushed a client to focus entirely on high-intent keywords. Results came quickly, but we plateaued after three months. We’d captured all the ready-to-buy prospects and hadn’t built any pipeline. We had to scramble to build mid-funnel campaigns to feed the beast.
Nobody wakes up suddenly deciding they need your software. The decision process starts way earlier, and your Google Ads spending for SaaS should acknowledge that.
Getting Too Granular Too Soon
I once created a campaign structure so detailed it had 230+ ad groups for a relatively simple SaaS product. It was a management nightmare, and we didn’t have enough data in each ad group to make good decisions.
Start simpler than you think you should. You can always add complexity later.
Ignoring the Human Element
I worked with a company that was hitting all their SaaS PPC budget allocation targets on paper but wasn’t seeing sales. Turns out, their landing page was converting tire-kickers who weren’t qualified for their enterprise solution. The leads looked good numerically but were wasting the sales team’s time.
Remember that behind every click is a person making a decision, not just a conversion metric.
Not Setting Aside Budget for Retargeting
This is such a basic mistake, but I’ve made it myself. For most SaaS companies, only 2-5% of website visitors convert on their first visit. Without retargeting, you’re leaving money on the table.
I recommend allocating at least 10-15% of your Google Ads budget for software companies to retargeting campaigns.
Building a SaaS Google Ads Budget That Grows With You
The most successful SaaS companies I’ve worked with take a phased approach:
Phase 1: Get Your Feet Wet (Months 1-3)
Start with a limited budget (I usually recommend 5-8% of your target) focused on:
- Your brand terms
- Your closest competitors’ brand terms (controversial but effective)
- High-intent bottom-funnel keywords
Use this time to:
- Test different ad messaging
- Build your conversion baseline
- Find your initial winning keywords
One client started with just $3,000 monthly, focusing entirely on bottom-funnel terms. By month three, they had enough data to know exactly which keywords and ads were driving trials at an acceptable cost.
Phase 2: Expand What Works (Months 4-6)
Once you have reliable data, it’s time to:
- Increase budget for your proven winners
- Expand keyword lists methodically
- Test new ad formats (responsive search ads, call extensions, etc.)
A B2B SaaS client doubled their spend in month four after finding a set of keywords that consistently delivered leads at 30% below their target cost. They scaled gradually, adding 20% more budget each month as long as their CAC remained stable.
Phase 3: Build for the Long Term (Months 7-12)
Now you can get more sophisticated:
- Implement automated bidding strategies
- Expand to mid-funnel keyword sets
- Test audience targeting to improve efficiency
By month 12, your SaaS Google Ads budget should be a finely-tuned machine delivering predictable results.
The Bottom Line on SaaS Google Ads Budgets
After all my years working with SaaS companies on their Google Ads, here’s what I know for sure:
The “right” budget isn’t about hitting some magic percentage of revenue. It’s about understanding your unit economics and being willing to spend as much as makes financial sense based on customer value.
I’ve seen companies spending 5% of revenue absolutely crushing it because their campaigns were hyper-efficient. I’ve seen others spending 25% struggling because their fundamentals were off.
The companies that win at Google Ads don’t think of it as a cost center but as a predictable revenue machine. They know that if they put $1 in and get $3 out reliably, they should keep feeding the machine as much as it can handle.
So rather than obsessing over whether your SaaS Google Ads budget is the “right” percentage, focus on building campaigns that deliver customers at an acceptable CAC. The budget will take care of itself.
What’s been your experience with Google Ads for your SaaS business? Have you found certain approaches that work particularly well? Drop a comment below – I’d love to hear your thoughts.
This article draws on my personal experience working with dozens of SaaS companies on their ad strategies. Your mileage may vary, and you should adapt these principles to your specific business situation.