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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).
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How to calculate cost per lead?
Below is the formula to calculate CPL.
CPL = Total expenses on CPL campaign / Leads acquired
Factors affecting CPL
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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.
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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.
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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 app promotion before focusing on lead generation.
Related Terms
Cost Per Action
Cost Per Action or CPA is a pricing model in the advertising industry used in performance campaigns. It indicates the cost advertisers pay for every action users complete on a digital advert. An action could be installing, registering, clicking on a link, etc.
Cost Per Click
In the CPC or Cost Per Click model, advertisers pay publishers a certain amount for every click the ad receives. CPC is sometimes referred to as PPC or Pay Per Click.
Cost Per Download
Cost Per Download (CPD) is a revenue model in which the advertisers only pay when users download their app or a specific file. For example, if CPD is decided at $10 for a particular app and there are 100 downloads, then the advertiser is entitled to pay $1000 to the publisher.
Cost Per Mille
In the CPM or Cost Per Mille model, advertisers pay publishers/app developers a fixed amount for every 1000 impressions on the ad shown on the publisher’s app.
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