Cost Per Lead

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.

Webopedia Staff
Webopedia Staff
Since 1995, more than 100 tech experts and researchers have kept Webopedia’s definitions, articles, and study guides up to date. For more information on current editorial staff, please visit our About page.

Related Articles

@ Sign

Pronounced at sign or simply as at, this symbol is used in e-mail addressing to separate the user' name from the user's domain name,...

Munging

(MUHN-jing) Munging (address munging), is the act of altering an email address posted on a Web page to make it unreadable to bots and...

How to Create an RSS Feed

In the second installment of RSS how-to, we look at some of the nonrequired (optional) channel and item tags, discuss RSS specifications in-depth and...

Dictionary Attack

(n.) (1) A method used to break security systems, specifically password-based security systems, in which the attacker systematically tests all possible passwords beginning with...

ScalaHosting

ScalaHosting is a leading managed hosting provider that offers secure, scalable, and affordable...

HRIS

Human resources information system (HRIS) solutions help businesses manage multiple facets of their...

Best Managed Service Providers...

In today's business world, managed services are more critical than ever. They can...