The Ultimate Guide to Vertical B2B/SaaS Advertising
Jason Lemkin on Twitter
What is Vertical SaaS?
SaaS/B2B is the fastest growing category of venture backed start-up, and vertical specific companies are the next frontier in growth.
The definition of Vertical SaaS is pretty straightforward. Instead of making a product any business can buy, Vertical SaaS products are specialized for a specific industry, like construction, child care, real estate, etc.
What we know about Vertical SaaS Advertising
We’re Right Percent, a direct response B2B ad agency. All we do is B2B, and Vertical SaaS is a sub-specialty of ours. We’ve helped vertical B2B start-ups acquire customers from industries like:
Childcare
Beauty
Restaurants
Property Managers
Grocery
Pets
Flowers
Trucking & Transportation
Corporate VC
And more. We’ve lived and learned the playbook for ad strategies that help scale these companies.
What makes advertising for B2B verticals different from regular B2B advertising?
B2B marketing on its own is already targeting a much smaller audience than B2C. Targeting a specific industry vertical narrows that audience even further.
To reach your specific customer, you need even more precise targeting and messaging. Otherwise you’ll generate a large percentage of unqualified leads.
On the plus side, your offering is more differentiated in the marketplace, so your audience should be more interested in your product.
What channels are best for Vertical B2B targeting?
First, check out our ad channels chart.
Taken a look? Great!
Generally, the channels on the right of the chart work best for Vertical B2B.
What about industry specific publications? Vertical focused magazines, newsletters, etc. - The problem with industry specific publications is always scale. Your industry reads these things once a week or month at most, compared to spending hours a week on other ad platforms which are time sucks. Plus, they tend to read industry news on Facebook and LinkedIn groups anyway. Its consistently hard to find scalable direct response advertising opportunities in industry publications.
For digital advertising, which is the focus of this article, there’s three channels that we find work at scale:
Facebook - Facebook works when you have a broad target audience of at least 200,000 decision makers. The best use case is B2SMB companies, where Facebook is especially scalable. The 2nd best use case is bottoms-up B2B, where anyone can try your product. Lastly is traditional B2B targeting large companies - it can work but its harder. The bigger the company you’re going after, the more important content ads become, as opposed to direct to lead or demo ads.
See our full guide to testing Facebook for B2B ads here.
Google - Google works best for B2B companies in a market where customers have intent already and are searching for a product like yours. Google is the most competitive ad channel. It’s often hard for challenger companies to get a good ROI in a well established business niche. The more value you can capture per click, the more likely you are to do well on search. In addition, the better your business holds up against direct comparison to your competitors, the better you’ll do.
See our full guide to testing Google for B2B ads here.
LinkedIn - LinkedIn is best for targeting employees of larger B2B companies with specific attributes. Content ads work best most of the time, as opposed to direct to demo ads. It is generally not good for B2SMB - small business owners don’t use the platform much, comparably.
See our full guide to testing LinkedIn Ads here.
Other Ad Channels - This can be Youtube, TikTok, Quora, Snapchat, Pinterest, Reddit, etc. We’ve tested these extensively and can work, but just don’t find as much scale as direct response B2B advertising. We don’t recommend testing them unless you’ve exhausted the main three ad options.
How do you target niche verticals on each channel?
There’s three ways to target qualified B2B customers from specific verticals:
Manual targeting.
With manual targeting, platforms let you pick and choose pre-made audience buckets.
What does manual targeting mean on each platform?
On LinkedIn, this is selecting industry, seniority, company size, etc.
On Search, this is mostly keyword selection, with a bit of interest group layering.
On Facebook, this is selecting interest groups like “small business owner”. It’s generally ineffective on Facebook compared to algorithmic targeting.
Manual targeting already exists on each platform - you just have to dig in and find it.
Third party targeting.
With third party targeting, you use a third party data source to target users you want to see your ads.
What’s important to know about third party targeting for Vertical SaaS?
This is possible on all three major platforms.
You can upload data to target yourself with CSVs or APIs.
You can use flexible third party tools like 6Sense or LiveRamp.
You can also retarget users off pixel events from your website.
The trick is you have to gather clean, voluminous data yourself - the platforms don’t provide them for you natively with this option.
Algorithmic targeting.
Algorithmic targeting means teaching ad platforms which prospects you want to see more of using conversion signals.
All major ad platforms use powerful AIs to decide who to serve ads to.
How do conversion signals affect lead quality from the ad platforms?
The conversion signal you send will dramatically affect the average ROI of leads that come in.
You optimize on leads, which have higher volume but lower correlation to revenue, or optimize to something further down the funnel, creating a more powerful signal at the cost of conversion event volume.
With algorithmic targeting, you’re relying on your ad creative and copy in combination with the conversion signals to reach even the most obscure audiences.
While algorithmic targeting often produces skepticism, we’ve seen it work well at scale to reach niche vertical audiences.
Here’s a quick summary of which targeting type works best for each platform:
Differentiated B2B ad creative is key
For all B2B targeting methods, you need strongly differentiated creative.
In B2B, the Visual Headline is what makes creative stand out to a target audience. You have to get the attention of your target decision maker in a second as they’re scrolling their feeds, and not get the attention of non-qualified clickers.
In Vertical B2B, this is even more stark. You have to be very specific with your Visual Headline to appeal only to your targeted industry.
What happens if you don’t make sure you appeal only to your target industry?
Your best target leads are less likely to click your ads.
Non-qualified leads are more likely to click, which both wastes you money and throws off the platform targeting algorithms, a double whammy.
This may seem straightforward, but it’s a mistake we very commonly see when businesses get too clever with ad copy.
The Takeaways on B2B/SaaS Advertising
Focus on Google, LinkedIn or Facebook, depending on your business’s target audience.
Use the targeting best practice for that channel.
Make ad creative that appeals to your target vertical, and only them.
Spend more than $30k a month on ads, and want a free audit of your Vertical B2B ad accounts? Fill out the form on our homepage.