Definition:
Cost per lead, often abbreviated as CPL, is a valuation model of online advertising,where the advertiser explicitly pays for the registration of a potential consumer interested in the advertiser’s offer. It is also commonly called lead generation. A lead can consist of filling out a form, subscribing to the newsletters on the page or requesting more information about a certain product.
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How much does a CPL cost?
Cost per lead is a very interesting metric for advertisers, as it allows them to accurately calculate the effectiveness of their campaigns. However, it is not easy to calculate what is the maximum that should be paid for a lead. To calculate what a CPL depends on, three main factors must be taken into account:
- The budget of the advertising company.
- Your concrete goals with a campaign. The advertiser must calculate the return on investment generated by each lead and if they are really effective. Thousands of registrations to get a free tutorial, for example, are useless if you do not hire a course or buy some other service.
- The sector in which it carries out the activity. In this sense, there are economic sectors, such as insurance or urgent services, for example, that have high competition and generate higher costs.
Differences between CPL and CPM/CPC
Unlike cost per thousand (CPM) and cost per click (CPC), where advertisers pay for impressions (also known as “views”) and clicks, respectively, when CPL pricing is performed advertisers of this model only pay for enrollment, regardless of the number of impressions or the number of clicks their ad receives.
Frequently asked questions about CPL
What is CPL?
CPL, or cost per lead, measures how much it costs to generate a lead or commercial contact through a campaign. A lead can be a form, a request, a download, a call or any qualified registration.
What is CPL used for?
It is used to evaluate the efficiency of contact acquisition campaigns and compare channels according to generation cost. It is especially useful in B2B businesses, services, education, software or sales with a long cycle.
What is the difference between CPL and CPA?
CPL measures the cost of obtaining a lead, which may still need qualification and commercial follow-up. CPA measures the cost of a defined acquisition, which may be closer to a sale or customer.
How can CPL be reduced without losing quality?
It can be reduced by improving segmentation, value proposition, forms, creative, landing pages, speed and tracking. To avoid losing quality, subsequent conversion, lead origin and fit with sales must also be measured.