Cost Per Lead

What is Cost Per Lead or CPL?

Cost Per lead (CPL) is a revenue metric representing the cost of acquiring each lead for a business. As advertisers are the ones who pay the CPL, they always want low CPL campaigns. This metric helps businesses understand their marketing efforts' effectiveness and determine the return on investment (ROI) on the advertising spend.

Why are CPL campaigns important?

Cost per lead campaigns are important because it allows a business to acquire quality leads that easily convert. Advertisers have the freedom to set budgets for CPL campaigns. Additionally, they can choose publishers based on their audience demographics, traffic quality, and Daily Active Users (DAU).

How to calculate cost per lead?

Below is the formula to calculate CPL.

CPL = Total expenses on CPL campaign / Leads acquired

Factors affecting CPL

Conversion rate

A high conversion rate means that many visitors who see your ad are getting converted. Hence, higher conversion is directly proportional to lower cost per lead. In contrast, low conversion increases the cost per lead.

Competition

Getting leads during robust competition is a challenging goal to accomplish. Your ads need to be more precise and unique than your competing brands. Under the influence of these factors, CPL becomes high when the competition is high.

Brand prominence

How well people know your brand has a direct impact on CPL. Prominence brings you leads easily, thereby lowering the cost per lead. For that, businesses must do effective promotion before focusing on lead generation.