An analysis of $20 million in paid search ad spend yields interesting results for practitioners of product-led strategies.
The customer journey for B2B software is long and complex for everything but the most basic, inexpensive products.
Regardless of the complexity of the product or process, it’s safe to say most B2B SaaS buyers want to see the product in action before they invest. In response, vendors have several strategies to get the product in front of prospects.
- Free trials: Users try the software for a limited number of days.
- Freemium: A free version is available, but more advanced features require a license.
- Demos: See the software in action, usually with a product specialist and a seller present.
Each puts the product at the forefront of the experience but in slightly different ways. Demos, for example, are typically the gateway to a traditional sales-led GTM strategy.
However, an increasing number of small and mid-market B2B SaaS vendors are trying product-led growth (PLG) and product-led marketing (PLM). There are two business drivers for taking a product-led approach to sales and marketing.
- Sales teams are expensive. Hiring, training, paying and inevitably replacing an experienced sales team is resource-intensive. The best performers consume more resources because they make more money. The worst need to be replaced often, which also incurs costs.
- Buyers will avoid sales if you give them an opportunity. Salespeople make everything sound great, which makes buyers skeptical. They put pressure on buyers to act. It’s not an enjoyable experience for many.
Mike Nierengarten is the founder of Obility, an agency that serves mid-market B2B SaaS vendors with SEO, paid search and paid social services. He’s seen the movement to PLG and PLM firsthand. For now, most of Obility’s clients remain focused on demos and sales-focused strategies.
“We’re starting to see the transition,” he said. “We’re now making that transition internally as well.”
Vendors aren’t the only ones driving the transition to PLG. Resistance from prospects to lead generation and sales-led strategies is not uncommon today.
“People want to buy directly on their own,” Nierengarten said, “especially if you’re targeting developers. Additionally, people are pushing back on filling out forms.”
Show me the data
It’s no surprise demos and free trials are performing well for Obility’s clients. But which message is more effective? Nierengarten brought the data in a recent LinkedIn post.
The experiment
The Obility team looked at 11,286 responsive paid search ads that ran between January 2023 and August 2024.
- The ads offered either a free trial or a demo.
- The vendors included both Obility clients and non-clients.
- The total spend on the ads was more than $ 20 million.
The results
Among the findings:
- A demo CTA generally drew a higher conversion rate, but the free trial call to action drove a higher click-through rate (CTR).
- For non-branded campaigns, a free trial CTA showed nearly twice the CTR of a demo call to action.
- Calculating conversions by 1,000 impressions shows free trials nearly double demos.
- For non-branded campaigns, demos drove fewer conversions than trials per 1,000 impressions.
- For branded campaigns, free trials drove 167% more conversions per impression.
Obility’s analysis of paid search ads for demos and free trials. Source: Mike Nierengarten.
As with any analysis of campaign performance, your results may vary, of course. But I asked Nierengarten about the secrets to success when running paid campaigns, whether for demos, free trials or another approach.
“Run profitable campaigns and re-invest in the profitable campaigns to really get that flywheel going,” he said.
Sounds like common sense? It’s more difficult than it initially appears.
Too many B2B SaaS vendors are trying to run the same campaign over and over. For large vendors, Nierengarten said, the problem is too often they aren’t running profitable campaigns. Smaller vendors, on the other hand, often lack the resources to re-invest, he said.
The post Free trial vs. demo: What’s more effective in B2B SaaS ads? appeared first on MarTech.
About the author
Mike Pastore has spent nearly three decades in B2B marketing, as an editor, writer, and marketer. He first wrote about marketing in 1998 for internet.com (later Jupitermedia). He then worked with marketers at some of the best-known brands in B2B tech creating content for marketing campaigns at both Jupitermedia and QuinStreet. Prior to joining Third Door Media as the Editorial Director of the MarTech website, he led demand generation at B2B media company TechnologyAdvice.
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