Glossary · Cost per Lead
What is CPL (cost per lead)?
CPL (cost per lead) is how much a developer pays for one contact from advertising. You get it by dividing the ad budget by the number of leads for the period. CPL shows the price of entering the funnel and says nothing about how many of those leads will reply, qualify and buy.
A CPL calculation for a project
A project spends MX$300,000 a month and gets 1,500 leads: CPL is MX$200. Of those leads, 135 are qualified, and each qualified lead costs about MX$2,222, 11 times more than a lead.
Now a hypothetical comparison. Say another campaign on the same budget brings in 3,000 leads at MX$100, but only 60 of them qualify. The cost per qualified lead climbs to MX$5,000, even though CPL dropped by half. On a CPL report, the second campaign looks better.
Why a low CPL can cost you more
The ad platform looks for the people most likely to submit a form. If the campaign optimizes for lead volume, it brings in people who click on anything, and CPL drops. The sales team spends its time calling people with no budget, while CPQL and CAC go up.
In our experience, the share of qualified leads grew from 5% to 25% when campaigns switched from optimizing for CPL to optimizing for qualified leads.
When CPL is still worth watching
- To compare creatives within one channel, if their lead quality is the same.
- To catch a sudden jump: if CPL doubles in a week, something broke in the campaign or the form.
- As the first line of a report, always followed by CPQL, cost per meeting and CAC.