The 4 Biggest Google Ads Mistakes Small SaaS Companies Make (And How to Fix Them)

When you try to compete on their terms, you’re essentially bringing a knife to a gunfight. Your ads will get minimal visibility, your cost-per-click will be astronomical, and the traffic you do get will be incredibly broad and unlikely to convert.

The Right Approach

Instead of trying to boil the ocean, focus on specific, high-intent keywords where you can actually win. Start with 10-15 highly targeted keywords that align perfectly with your ideal customer profile.

For example, instead of targeting “project management software,” target:

• “construction project management software”
• “project management for general contractors”
• “construction scheduling software”
• “project tracking for builders”

These keywords have several advantages:

1. Lower competition: Fewer companies are bidding on these specific terms
2. Higher intent: Someone searching for “construction project management software” knows exactly what they want
3. Better fit: These searchers are more likely to be your ideal customers
4. Lower cost: Less competition means lower cost-per-click
5. Higher conversion rates: Specific searches convert better than generic ones

Implementation Strategy

Here’s how to identify and implement the right keyword strategy:

Step 1: Define Your Niche Get specific about who you serve. Don’t just say “small businesses”—identify the exact industry, company size, and use case your software solves.

Step 2: Research Long-Tail Keywords Use tools like Google Keyword Planner, Ahrefs, or SEMrush to find longer, more specific keyword variations. Look for keywords with:

• Clear commercial intent (include words like “software,” “tool,” “platform”)
• Moderate search volume (100-1,000 searches per month is perfect for small budgets)
• Lower competition scores

Step 3: Analyze Search Intent Look at the search results for your target keywords. Are the results showing SaaS companies like yours, or are they showing blog posts and informational content? You want keywords where the search results are dominated by software companies.

Step 4: Start Small and Expand Launch with your 10-15 best keywords, then gradually expand based on performance data. It’s better to dominate a small set of keywords than to get minimal visibility on hundreds.

Mistake #2: Using the Wrong Campaign Type

Google loves to push its newest campaign types, especially Performance Max. When small SaaS companies set up their first Google Ads account, they often see Google’s recommendation to use Performance Max and assume it’s the best option.

What They Do Wrong

They launch Performance Max campaigns because:

• Google recommends it as the “default” option
• It promises to show ads across all Google properties
• It claims to use “advanced machine learning” to optimize performance
• It seems easier than setting up multiple campaign types

Why Performance Max Fails for New SaaS Companies

Performance Max can be incredibly effective—for companies with extensive conversion data and larger budgets. But for new SaaS companies, it’s often a money pit for several reasons:

Lack of Historical Data: Performance Max relies heavily on Google’s machine learning algorithms to optimize your campaigns. These algorithms need substantial conversion data to work effectively. When you’re just starting out, you don’t have this data, so Google is essentially guessing about what works.

Budget Dilution: Performance Max spreads your budget across Search, Display, YouTube, Gmail, and other Google properties. With a limited budget, this dilution means you’re not getting enough volume in any single channel to generate meaningful data.

Branded Search Dominance: A significant portion of your Performance Max spend will go toward branded searches (people searching for your company name). While branded searches are important, you’re likely already ranking organically for these terms, making the paid spend less efficient.

The Right Approach

For your first 60 days, focus 100% of your budget on Search campaigns. Here’s why this approach works better:

Complete Transparency: You can see exactly which keywords trigger your ads, which search terms people use, and which queries convert.

Full Control: You can adjust bids, pause underperforming keywords, and optimize based on actual performance data.

Faster Learning: Concentrating your budget on Search campaigns generates more data faster, allowing you to optimize more effectively.

Better ROI: Search campaigns typically have the highest intent and conversion rates, making them the best use of limited budgets.

Setting Up Your First Search Campaign

Here’s the step-by-step process:

Campaign Structure:

• Create one Search campaign focused on your core product/service
• Use “Search Network only” (not Search Partners initially)
• Set your daily budget to roughly 1/30th of your monthly budget
• Choose “Maximize Conversions” bidding if you have conversion data, or “Manual CPC” if you don’t

Ad Group Organization: Create tightly themed ad groups with 3-5 closely related keywords each. For example:

• Ad Group 1: Construction project management (3-4 keyword variations)
• Ad Group 2: Real estate CRM (3-4 keyword variations)
• Ad Group 3: Team collaboration tools (3-4 keyword variations)

Keyword Match Types: Start with exact match and phrase match keywords only. Avoid broad match until you have more data and experience.

Mistake #3: Tracking & Optimizing Around the Wrong Conversions

Conversion tracking might be the most important aspect of your Google Ads setup, and it’s also where I see the most confusion. Small SaaS companies often track too many actions as conversions, which confuses Google’s machine learning and leads to poor optimization.

What They Do Wrong

They set up multiple conversion actions and mark them all as “primary”:

• Newsletter signups
• Demo requests
• Free trial signups
• Whitepaper downloads
• Webinar registrations
• Contact form submissions

The thinking is “more data is better,” but this approach backfires spectacularly.

Why This Fails

When you have multiple primary conversion actions, Google’s algorithm doesn’t know what to optimize for. If you’re optimizing for both demo requests and trial signups, Google might deliver people who are likely to request demos but unlikely to start trials.

This creates a fundamental misalignment between what Google thinks success looks like and what actually drives revenue for your business.

The Right Approach

Pick ONE primary conversion action that’s closest to revenue and stick with it. This gives Google a clear optimization target and ensures your campaigns drive the results that actually matter for your business.

Choosing Your Primary Conversion

Here’s how to identify the right conversion action:

For Free Trial SaaS Companies: Track trial signups as your primary conversion. Even if you also care about demo requests, trial signups are typically closer to purchase intent.

For Demo-Driven SaaS Companies: Track demo requests or “qualified demo requests” if you can identify them. Don’t muddy the waters by also tracking contact form fills or brochure downloads.

For Product-Led Growth: Track account activations or “aha moments” rather than just signups. Someone who signs up but never uses your product isn’t a real conversion.

Advanced Conversion Setup

Once you’ve identified your primary conversion, here’s how to set it up properly:

Conversion Values: If possible, assign different values to conversions based on their likelihood to convert to paying customers. For example, if trial users from organic search convert to paid at 15% and trial users from Google Ads convert at 25%, assign a higher value to the Google Ads conversions.

Attribution Windows: Use a 30-day click attribution window for most SaaS businesses. This accounts for the typical consideration period without attributing conversions to clicks that happened too long ago.

Secondary Conversions: You can still track other actions (like demo requests or content downloads) as secondary conversions for reporting purposes. Just don’t mark them as primary conversions that Google should optimize for.

Mistake #4: Copying Enterprise SaaS Strategies

This mistake ties everything together. Small SaaS companies look at what Salesforce, HubSpot, or Monday.com are doing and try to replicate those strategies with a fraction of the budget and resources.

What They Do Wrong

They try to be everywhere at once:

• Search campaigns
• Display campaigns
• YouTube advertising
• Shopping campaigns (if applicable)
• Gmail promotions
• Discovery campaigns

The thinking is that enterprise companies must know what they’re doing, so copying their approach should work.

Why This Fails

Enterprise SaaS companies can afford to be everywhere because they have:

• Massive budgets: They can spend $100K+ per month across multiple channels
• Dedicated teams: They have specialists for each channel and campaign type
• Extensive data: Years of conversion data to inform their strategies
• Brand recognition: People already know their brands, making upper-funnel marketing more effective

When you spread a $5K budget across multiple channels, you don’t generate enough volume in any single channel to create meaningful optimization opportunities.

The Right Approach

Master one channel before expanding to others. For most SaaS companies, that should be Google Search campaigns.

Here’s the expansion strategy I recommend:

Phase 1 (Months 1-3): Search Campaigns Only Focus 100% of your budget on Search campaigns until you’re consistently profitable. This means:

• Cost per acquisition is below your target
• You’re generating enough conversions to make data-driven optimizations
• You’ve identified your best-performing keywords and ad copy

Phase 2 (Months 4-6): Add Display Retargeting Once Search campaigns are profitable, add display retargeting to re-engage people who visited your website but didn’t convert. Start with just 10-20% of your total budget allocated to retargeting.

Phase 3 (Months 7-12): Expand Based on Data Look at your Google Analytics data to see where else your customers are coming from. If you see significant organic traffic from YouTube, consider YouTube advertising. If LinkedIn is driving quality traffic, test LinkedIn ads.

Channel Selection Criteria

When choosing your second channel, consider:

• Audience overlap: Does your target audience spend time on this channel?
• Content requirements: Do you have the resources to create the content this channel requires?
• Learning curve: How much time will it take to become proficient on this channel?
• Minimum viable budget: Can you allocate enough budget to generate meaningful data?

Putting It All Together: Your 30-Day Recovery Plan

If you’re currently making these mistakes, here’s how to fix them:

Week 1: Audit and Pause

• Review your conversion tracking setup
• Pause any Performance Max campaigns
• Pause broad keyword campaigns that aren’t profitable
• Identify your one primary conversion action

Week 2: Restructure Your Account

• Create new Search campaigns with tightly themed ad groups
• Add your researched long-tail keywords
• Write new ad copy that matches search intent
• Set up proper conversion tracking

Week 3: Optimize and Test

• Review search term reports and add negative keywords
• Test new ad copy variations
• Adjust bids based on performance data
• Expand successful keyword themes

Week 4: Scale What Works

• Increase budgets for profitable campaigns
• Add more keyword variations around successful themes
• Begin planning your second channel (but don’t launch yet)

The Bottom Line

Your first 30 days with Google Ads set the foundation for everything that follows. Get these basics right before you worry about advanced tactics, audience targeting, or additional channels.

Most “Google Ads isn’t working” problems are actually “Google Ads setup isn’t working” problems.

The difference between success and failure often comes down to these fundamental strategic decisions. When you focus on the right keywords, use the right campaign types, track the right conversions, and avoid spreading your budget too thin, Google Ads becomes a predictable, scalable growth engine.

Remember: you don’t need to be everywhere to be successful. You just need to be excellent in the places that matter most to your ideal customers. Start small, master the basics, and expand from a position of strength.

The small SaaS companies that succeed with Google Ads are the ones that resist the temptation to copy enterprise strategies and instead build approaches that work with their constraints and advantages. Your size is actually an advantage—you can move faster, test more aggressively, and optimize more quickly than larger competitors.

Use that to your advantage, avoid these common mistakes, and you’ll be well on your way to building a profitable Google Ads program that scales with your business.