Google Ads Optimization with MRR and Dynamic CLTV for a Subscription Business

Type of company
Subscription-based SaaS company

My role
Performance Marketing Specialist

Context and challenge

In subscription-based business models, optimizing campaigns solely based on initial conversions or static values often leads to an incomplete view of actual performance. This project started with a key challenge: Not all countries or campaigns generated the same ARPU or the same long-term value, This led to inefficient investment decisions when optimized using only generic CPA or ROAS.

The objective was Align Google Ads with the true value of the customer, incorporating financial metrics specific to the SaaS business directly into the advertising platform.

Project objective

Combining dynamic subscription data with Google Ads to:

• Get a ROAS realistic, based on recurring revenue (MRR) and customer lifetime value (CLTV).

• Differentiate performance by country and campaign, considering significant variations in ARPU.

• Allow a Value-based automatic optimization, instead of conversion volume.

Strategy and implementation

1. Integrating business data into Google Ads
   New key metrics were added directly to the platform:

   • ARPU by country

   • CLTV dynamic

   • MRR generated by subscriptions

   • ROAS calculated based on actual revenue, not estimates

2. Transition to target ROAS optimization
   In a second phase, the campaigns began to automatically optimize towards a desired ROAS, contrasting it with the actual ROAS obtained from the business database.

3. Focus on value, not just conversion
   This allowed for prioritizing campaigns and markets with lower volume, but higher long-term profitability, and reduce investment in those with low ARPU even if they generate many new sign-ups.

Key results

• Clear and actionable vision of real impact of Google Ads on recurring revenue.

• Significant improvement in the budget efficiency, redistributing it to countries and campaigns with higher CLTV.

• Total alignment between marketing and revenue, facilitating strategic decisions based on real financial data.

• A solid foundation for scaling campaigns without compromising business profitability.

Applied skills

• Google Ads

• Paid Media

• Performance Marketing

• Search Engine Marketing (SEM)

• SaaS strategy focused on recurring revenue