Cost per lead (CPL)
Also called CPL.
What the ads cost divided by the number of leads they brought. The number most lead-gen reports lead with.
Why it matters
It measures the price of a lead and says nothing about what the lead is worth. A campaign can halve its cost per lead by buying leads that never close, and look twice as good while bringing in less business.
What goes wrong
Expect it to rise after switching to value-based bidding. That is often the strategy working: it pays more for leads likely to close and passes on cheap ones that would not. Judged on cost per lead alone, the switch looks like a failure in exactly the cases where it is succeeding.
Read it next to what the leads became: cost per sale, and the revenue that closed.
How to check it on your own account
Put cost per lead next to cost per won deal for each campaign over the last year. Where the two rank campaigns differently, cost per lead has been misleading you.
Next to this
- Customer acquisition cost (CAC)What it costs to win one customer: ad spend divided by the deals it produced.
- Maximize conversionsGoogle AdsThe Smart Bidding strategy that gets as many conversions as it can within your budget.
- Mix shiftThe change in what kind of lead a platform buys after the bidding changes.
How it applies in your trade
The same method, worked through for each kind of business: what a lead is worth, what is known on arrival and what to prepare.
The rest of this step
Measure this on your own data
The diagnostic reads a CRM export in your browser and reports your volume, your match rate and the spread between your leads against the thresholds in this glossary. Nothing is uploaded and no account is needed.