Cost Per Lead Definition & Meaning
In digital marketing, cost per lead (CPL) refers to a paid advertising model based on a prospective customer’s likelihood to advance through a sales pipeline. Similar to cost per action (CPA) models, a user becomes a lead when they have submitted their contact information to learn more about a product, service, or promotion. This is why CPL, pay-per-lead, and lead-generation are often used interchangeably.
Typically, publishers that offer CPL campaigns will deliver leads at a higher rate than cost per impression (CPM) or cost per click (CPC) models because emphasis is placed on quality over quantity. Whereas any user of a publisher’s site may constitute an impression or even a click, a lead is one that has actively indicated their interest in an advertiser’s offering and therefore more likely to return the investment.
CPL campaigns have grown in popularity because it is much easier to measure the return on investment (ROI) and make adjustments to improve their effectiveness. Additionally, advertisers have more control over their brand, their audience, and how their advertising budget is spent with CPL campaigns than with CPC or CPM campaigns.
Calculating cost per lead
A CPL campaign starts with identifying an advertiser’s buyer persona and the most compelling value proposition—typically a discount, free resource, or another exclusive opportunity. Then the advertiser decides which publisher or affiliate is most appropriate based on factors like audience demographics, campaign cost, and targeting options.
In general, CPL is calculated by dividing the total cost of the campaign by the number of leads it generates; typically the advertiser will set a fixed campaign budget and then optimize the targeting specifications and content over time to reduce the average cost per lead. Once the campaign is active, users who act on the call to action are sent to the advertiser either automatically using an API or manually using a lead generation form and exportable spreadsheet.
Stay up to date on the latest developments in Internet terminology with a free newsletter from Webopedia. Join to subscribe now.
From A3 to ZZZ we list 1,559 text message and online chat abbreviations to help you translate and understand today's texting lingo. Includes Top... Read More »Huge List of Computer Certifications
Have you heard about a computer certification program but can't figure out if it's right for you? Use this handy list to help you decide. Read More »
Computer architecture provides an introduction to system design basics for most computer science students. Read More »Network Fundamentals Study Guide
Networking fundamentals teaches the building blocks of modern network design. Learn different types of networks, concepts, architecture and... Read More »The Five Generations of Computers
Learn about each of the five generations of computers and major technology developments that have led to the computing devices that we use... Read More »