CPL advertising is the most cost-effective way of getting leads to grow your customer database, newsletter list or community site. You may be in wonder, the fact is, that with 71% year-to-year growth, online lead generation is the fastest growing segment in internet advertising.
Pay per lead scheme is a marketing program when an advertiser pays only for a lead (a user’s signup), who leaves any kind of contact information behind. This could be an email address, phone number or just a name.
How to calculate your cost per lead
It’s actually a very straightforward formula. Simply divide what you spend on a campaign or channel by the number of leads that came in from that channel.
For example: consider your company spent AED 7,500 on a pay-per-click (PPC) campaign and 50 users converted to leads: Cost per lead = AEd 7,500/50 = AED 150 per lead.
The cost per lead will be different depending on your industry, channel or the quality of a lead. If you want quality, a higher cost per lead might mean a higher quality lead, and a lower overall customer acquisition cost. If you want quantity, you might want to lower cost per lead, even if the leads aren’t as qualified.
The cost per lead will be different for every kind of business, depending on your industry, channel or the quality of a lead.
Pay per lead Marketing’s 5 main advantages
Greater quality of Traffic generating
Using such payment scheme as CPL ( cost per lead ) advertisers can be aware of building a quality user base. Since the CPL ( cost per lead ) model implies pricing for a lead generated or for a consumer that is interested in the product, there is a great opportunity for mobile app promotion. The number of owners of various mobile devices increases constantly. Any app developer or a marketer wants to get as much traffic as possible.
PPC (pay per click) vs PPL (pay per lead) in Budget savings
CPL ad model proves to be more cost-effective. Even if an advertisement works poorly, a merchant is not charged. He pays only for a lead. Cost per lead or Pay per lead involves the interest that a potential customer has shown to a mobile app by signing up to a newsletter or performing some other action.
CPA advertising or cost per acquisition pattern has similar characteristics, but it suggests charging for finished sales, in case a user/a subscriber installs an app/becomes a customer.
Cost per Click pattern in mobile advertising also aims to pile up sales. However, paying for clicks may result in the waste of money. Clicks do not imply guaranteed app installs. People may be just curious or click accidentally, whereas lead generation means better chances for gaining a quality audience.
Better targeting opportunities
Lead generation serves to more accurate targeting. Those visitors who are ready to perform an action, e.g. fill in the form, write necessary information about themselves, are more likely to become customers. This provides an app owner with better chances of building a solid user base.
Setting an ad campaign with a fixed price for a lead makes easier the ROI estimation. This term means return on investment (a measure of the effectiveness of your ad investment).
CPL advertising is intended for prolonged placement of an ad on a publisher’s resource. More impressions come together with the longer visibility. Thus it gives an advertiser more opportunities for brand awareness.
Pay per lead, often abbreviated as PPL, is an online advertising pricing model, where the advertiser pays for an explicit sign-up from a consumer interested in the advertiser’s offer. It is also commonly called online lead generation.
Contrary to cost per mille (CPM) and cost per click (CPC) pricing models, where advertisers are charged for impressions (a.k.a. “views”) and clicks, respectively, in a CPL pricing model advertisers pay only for a qualified sign-up regardless of how many impressions or clicks their advertisement receives. CPL advertising enables advertisers to generate guaranteed returns on their online advertising money.
Sales leads and marketing leads
There are two types of leads that advertisers can buy in the lead generation market: Sales leads and marketing leads.
Sales leads are generated on the basis of demographic criteria such as FICO score, income, age, HHI, etc. These leads may be exclusive (sold only to one advertiser) or non-exclusive (sold to multiple advertisers). Sales leads are typically followed-up through phone calls by the sales force and are commonly available for a wide range of verticals including mortgage, insurance and home services.
Marketing leads are brand-specific leads generated for a unique advertiser offer. In direct contrast to sales leads, marketing leads are sold only once. Because transparency is a necessary requisite for generating marketing leads, marketing lead campaigns can be optimized by mapping leads to their sources.
In recent times, due to the growth of transparency in the online lead generation market, the marketing leads segment of online lead generation segment has grown rapidly. Fortune 500 marketers, non-profit organizations and political candidates such as the 2008 Obama campaign are using CPL advertising to build e-newsletter databases, community sites, and other acquisition programs with consumers that are passionate about their brands/causes.
Difference between CPL and CPA advertising
In CPL campaigns, advertisers pay for an interested lead – i.e. the contact information of a person interested in the advertiser’s product or service. CPL campaigns are suitable for brand marketers and direct response marketers looking to engage consumers at multiple touchpoints – by building a newsletter list, community site, reward program or member acquisition program.
In Cost per action campaigns (CPA), the advertiser typically pays for a completed sale involving a credit card transaction. CPA is all about ‘now’ – it focuses on driving consumers to buy at that exact moment. If a visitor to the website doesn’t buy anything, there’s no easy way to remarket to them.
There are other important differentiators :
- CPL campaigns are advertiser-centric. The advertiser remains in control of their brand, selecting trusted and contextually relevant publishers to run their offers. On the other hand, CPA and affiliate marketing campaigns are publisher-centric. Advertisers cede control over where their brand will appear, as publishers browse offers and pick which to run on their websites. Advertisers generally do not know where their offer is running.
- CPL campaigns are usually high volume and light-weight. In CPL campaigns, consumers submit only basic contact information. The transaction can be as simple as an email address. On the other hand, CPA campaigns are usually low volume and complex. Typically, consumer has to submit credit card and other detailed information.
CPL advertising is more appropriate for advertisers looking to deploy acquisition campaigns by re-marketing to end consumers through e-newsletters, community sites, reward programs, loyalty programs and other engagement vehicles.
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