SEO glossary: Cost per lead

 

What does cost per lead (CPA) mean?

While many advertisers pay according to KLICKS or sales, cost per lead (CPL) is also a well-known method. This model translates as contact remuneration and is charged whenever a user logs into a newsletter, for example.

 

Depending on the industry, product and target group, this billing model is very interesting and economical for advertisers. It is mainly used when a user's visit is not expected to result in an immediate sale. This is the case with the sale of insurance policies, for example, when questions are still open.

 

The following calculation example helps to explain the cost per lead model in more detail:

 

(total expenditure for all leads generated) / (number of leads) = CPL in euros

 

(1,000 euros) / (100) = 10 euros

 

In this example, the total expenditure for 100 generated leads amounted to EUR 1,000. This resulted in a CPL of 10 euros.

 

 

How does cost per lead work?

If an advertising client is looking for interested parties and therefore potential customers, the CPL model is definitely interesting. This is because contacts are established that are then forwarded to a company's sales team, for example.

 

A deal is made between the advertiser and the traffic supplier regarding the price for a fully completed lead. If both sides agree, the advertising partner can start sending visitors to the target page. If a user signs up for a contact list and shows interest, the lead is completed and the advertising partner receives their payment.

 

Where is cost per lead applied?

The cost-per-lead billing model is always used when no direct purchase is expected following interaction with a potential customer. The primary aim is therefore to obtain customer data first. All the data collected is then passed on for evaluation and the relevant interested parties are contacted by sales consultants, for example. Consequently, the CPL method is often used for the sale of vehicles, insurance or real estate, for example.