What is the CPL, how is it calculated and in which cases to apply it?

by Moises Hamui March 20, 2024

CPL, also known as cost per lead or PPL (pay per lead) , is a fundamental metric in digital marketing that allows us to know the profitability of our investments in attracting potential customers.

In this article, we will go into depth about what CPL is, how it is calculated, and when it is useful to apply it.

What is CPL?

CPL is a metric that measures the cost invested in acquiring a lead . A lead is defined as a contact who has shown interest in our product or service, but has not yet made a purchase.

CPL helps us determine if our marketing strategies are effective and if we are generating leads at a reasonable cost.

How is CPL calculated?

Calculating CPL is relatively simple. Just follow the formula below:

CPL = Total cost of the campaign / Total number of leads

The total cost of the campaign includes all expenses related to it, such as investment in advertising, landing page design, payment to digital marketing platforms, etc.

The total number of leads is the number of people who have shown interest in our product or service and have left their contact information.

In which cases is it useful to apply CPL?

CPL is a useful metric in a variety of situations, such as:

Evaluate the profitability of marketing campaigns: CPL allows us to compare the cost of lead acquisition between different campaigns and determine which one is most effective.
Optimize marketing strategies: By analyzing CPL, we can identify the channels and strategies that generate leads at a lower cost and optimize our investments accordingly.
Set marketing goals: CPL can be used to set realistic and measurable marketing goals for lead generation.

How to improve CPL?

There are different strategies that we can implement to improve CPL, such as:

Create high-quality content: Offering relevant and attractive content to our target audience will help increase the number of leads generated.
Optimize landing pages: Landing pages should be designed to convert visitors into leads, so it's important to optimize them to be clear, concise, and persuasive.
Use the right tools: There are various digital marketing tools that can help us improve CPL, such as email marketing platforms, CRM , etc.

Examples of cases where the CPL is applied

A software company offers a free ebook in exchange for users' contact information. The total cost of the campaign is $1000 and 100 leads are generated. The CPL would be $10 per lead.
An online store launches a Facebook advertising campaign to promote its products. The investment in the campaign is $500 and 50 leads are generated. The CPL would be $10 per lead.

What should be taken into account when analyzing CPL?

It is important to note that CPL is not the only metric we should consider when evaluating the success of a marketing campaign .

It is also important to analyze other indicators such as CTR (click-through rate), lead conversion rate and ROI (return on investment).

In final words

CPL is a key metric for companies looking to optimize their digital marketing strategies and increase the return on their investments in lead generation.

By understanding what CPL is, how it is calculated, and when it is useful to apply it, businesses can make more informed decisions and improve their marketing results.

Frequently Asked Questions (FAQ)

Which is better, a high CPL or a low CPL?

In general, a low CPL is better than a high CPL, as it means you are generating leads at a lower cost. However, it is important to consider other factors such as the quality of the leads and the ROI of the campaign.

How can I compare the CPL of different companies?

It is important to compare the CPL of companies operating in the same industry and with similar marketing goals. It is also important to consider the size of the company, as larger companies typically have a lower CPL due to economies of scale.

What tools can I use to calculate CPL?

There are various digital marketing tools that can help you calculate CPL, such as Google Analytics, HubSpot, etc.

Written by Moises Hamui Abadi : I am an entrepreneur, founding partner of Viceversa and SoyMacho. After leading several digital businesses and advising several other businesses, I decided to form MHA Consulting, a digital marketing consultancy dedicated to growing and empowering digital businesses in more than 7 countries and generating more than 1,500 million pesos.