Definition

Online advertising payment model in which payment is based on the number of qualifying leads generated.


Information

Cost per lead (CPL) is one form of performance-based adverting. In some ways, it’s a middle ground between online advertising models like cost per impression (CPM) where a publisher is not directly rewarded or punished tied to how that traffic performs, and cost per sale where the publisher bears complete responsibility for how that traffic converts… even though they can’t control everything that happens on the advertiser’s site.

Unlike cost per sale, the company generating the leads doesn’t have their compensated directly to the sales conversion of those leads. However, for an advertiser to keep paying for leads from the same source, the leads ultimately must produce an acceptable conversion rate.

The cost per lead model helps share the responsibility for performance between publishers and advertisers. Publishers are responsible for putting their ads in from of the right audiences in the right ways to generate response. Advertisers are responsible for maximizing the conversion of those leads into sales.

see also: Digital Marketing Tools

Related Terms

CPM, eCPMCPCconversion ratecustomer acquisition cost

view all terms in the Online Advertising glossary or all terms in the Digital Marketing glossary