What does CPL mean?
The CPL price means that every time the advertiser gets a lead (a potential customer’s contact details), the CPL price is paid.
For example, if you ran a CPL campaign paying $4 to gather a list of 1,000 people who were interested in buying a Playstation, you would pay $4,000 dollars once you had 1,000 contact details.
CPL means Cost Per Lead, and is a variation of a CPA campaign. A lead is a person who is likely to make a purchase or complete an action. So instead of advertising on a CPA basis and paying for everyone who completes the action, a list of contact details is gathered for use in future marketing.
The CPL equation is:
Click to enlarge
CPL = Cost / Leads
Having a list of leads can be more useful than just getting the sales through, as the list can be used time and again for multiple purposes, and even sold onto other companies. A list of customers could of course be generated from sales via a CPA campaign (at the advertisers end the data would be anonymised in the ad server so only the website would have this list), however leads can in fact be more valuable.
Customers who purchase are signalling their interest in the product in quite a simple way. However finding people who might buy if they are coaxed a bit more is much more difficult as they won’t necessarily ever signal their interest. That is where CPL campaigns come in.
A CPL campaign generally takes the form of an ad taking a user to landing page where some sort of action collects their details for the advertiser. This can be in the form of a free sample or trial of a product (if they enter an email address), encouraging signing up to a service for free, or even just asking for their contact details to find out more later.
CPL campaigns used to often ask for email addresses in the actual ad itself, however this is much rarer now as people are more suspicious of advertising.
Note: CPL can also occasionally mean Cost Per Land. Cost Per Land is basically the same as Cost Per Click – it just means that publishers only get paid when a user fully loads up the landing page after clicking on an ad, as opposed to just having to click on it (there can be some discrepancy between these two figures due to loading times).
This is difficult to quantity as it depends what the lead is for. High value leads for high value sales will be worth a lot, but that doesn’t mean the CPL rate will be high as the conversion rate might be low.
It also depends on who wants who is booking the campaign – if it’s the company who is going to use the lead then a reasonable amount might be paid. If it’s a lead generation company, then they will need to sell the leads on, so will pay as little as possible.
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Author: Justin Driskill
Justin is the founder of The Online Advertising Guide and a freelance Digital Projects Manager.