Cost-Per-Lead

Cost per Lead by Ad Campaign: Metric of the Week

Welcome to the Metric of the Week. This week we’ll be discussing ‘Cost per Lead by Ad Campaign.’

What is the metric?

Cost per Lead (CPL) and/or Cost per Conversion (CPC) are just what their names imply: they are the cost for acquiring a lead or the cost of generating a conversion. A “lead” is generally an email address, while a “conversion” is generally an additional action taken by the prospect (e.g., purchasing your product/service, scheduling a phone consultation, etc.).

Because your CPL and CPC will vary by your ad campaign or lead source, it is important to view these metrics for each ad campaign/lead source.

Why should you care?

John Wanamaker famously said, “I know half of my advertising is wasted. I just don’t know which half.” The fact is that some of your advertising will be much more effective. When you figure out which ad campaigns are working (and expand them) and which ones aren’t (pause, stop or modify them), your advertising becomes much more profitable.

What does it look like?

The chart below shows two Adwords campaigns. Initially, Campaign 1 was most effective, generating leads at only $7.33 per lead. But within a few months, the price per lead for this campaign rose to over $10, while Campaign 2 was consistently generating leads at just below $7.40. Armed with this knowledge, you can consider pausing Campaign 1 and dramatically improving the ROI of your advertising.

AdCampaignConversionCost

How can you positively affect this metric?

Modifying the pages of your website, as discussed above, can improve your CPL and/or CPC. Another way to improve is to modify your ad campaigns. This can be done in numerous ways such as excluding non-performing keywords, modifying the interests you’re targeting, selecting different demographic profiles to target, targeting select geographic regions, etc.

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