Cost per Lead (CPL) is a payment method in online marketing.
Within this payment method advertisers do not pay for clicks or installs but for user sign ups. In this context, the term “lead” includes personal data that users voluntarily enter into a certain form. So, the advertiser has to pay every time a user clicks on the corresponding display ad and fills out the form. This way, advertisers only pay for users that are likely to become their customers in the future.
In lead management, we usually differentiate between two types of leads:
- Marketing Qualified Leads (MQL): Simply put, these are leads, who likely are not ready to buy yet, but will respond to being nurtured in the future. Usually, this kind of lead might not be ready to purchase a product or service right now. However, this person takes interest in the company’s product and thus is likely to become a customer later.
- Sales Qualified Leads (SQL): These are leads who are further along in their buying journey. They have specific questions and are ready for some one-on-one time with your sales department. Often this is the result of being nurtured by marketing, but they may also have entered your sales funnel of their own volition.
The big advantage of the cost-per-lead model is that it enables advertisers to receive a guaranteed return on their online advertising money.
You can find a detailed overview of all pricing models available in this article.