Dear SaaStr: How Much Does a Typical B2B SaaS Company Spend on Digital Marketing per Year?
It’s tough to spend even $1m a year effectively on most digital spend for most categories of B2B software:
- Putting aside Unicorns and folks that have raised monster rounds, in my experience, most enterprise SaaS companies struggle to deploy more than $40k-$50k a month on Adwords effectively. Maybe $100k if they are really, really good at it (which most aren’t).
- They may also be able to deploy a similar amount on G2, Capterra and other lead-gen solutions. Do those, too.
- And retargeting almost always works. Upload your list of prospects, and at least retarget them on X, LinkedIn, Facebook, Google etc. This is cheap and while it’s more a “second touch” than new lead generation, it almost always works at least a little bit. A little bit.
- And marketing, done well, on platforms almost always works. It’s hard to do well, but getting top placement on the Shopify ecosystem seems to work, for example. To a point.
- SMB-focused SaaS companies often have better performance with Facebook in particular, and can often deploy more there. And LinkedIn always has reach, it’s expensive but worth trying. But paid social for SaaS is generally poor and limited.
But overall, most B2B SaaS companies struggle to find enough “digital” places to deploy capital than have even mediocre (1x) returns.
The B2C playbook here just doesn’t work as well in B2B. The volume just isn’t there. Facebook Ads for most B2B? Doesn’t really work at all, unless they approach a consumer-like buyer. But in B2C and e-commerce? It remains a Top 3 channel for many.
The markets are often too nichey for B2C techniques to work as well, and there is too much competition for these tiny niches.
This is one reason you see so many B2B $$$ into field marketing (events, trade shows, etc.), paid webinars, funnel management, ABM, podcasts, newsletters, etc.
Those are more work than Adwords and Facebook ads. But they also are channels where seasoned marketers can deploy more capital in B2B than they can in most traditional “digital” channels.
My advice: try everything. And keep doing anything in digital that makes you back even $1 for each $1 spent. It’s a customer you probably wouldn’t already get. But don’t expect it to be much more than 10%-20% of your total customer acquisition.
There are some magicians that can do better, but they really are … magiciains.
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