CPL (Cost Per Lead, cost per lead) — a metric that shows how much it costs on average to acquire one potential customer.
A lead here is a person who has shown interest and provided their details: for example, completed a form, submitted an application, or provided a phone number. However, they have not yet become a customer.
CPL is especially important where advertising first generates applications that are then processed further: calling customers, checking forms, confirming orders, or converting them into purchases.
How to calculate CPL
Formula:
CPL = Advertising expenses / Number of leads generated
For example, $1 000 was spent on advertising and 100 applications were generated:
$1 000 / 100 = $10
The CPL was $10. This is exactly how much it cost on average to generate one application.
How CPL differs from CPA
CPL can be considered a specific case of CPA: here, generating a lead is the target action. CPA — is a broader metric that can be used to calculate the cost of any selected action, such as a purchase, registration, or deposit.
Let us take the same example. $1 000 was spent on advertising and 100 applications were generated, so the CPL is $10. If only 20 of these 100 leads made a purchase, the CPA for a purchase would be $50.
This means that CPL shows how much it costs to generate a lead, while CPA — shows how much the selected target action costs.
Important: CPL across different campaigns should not be compared based only on the lead price. Ten leads at $5 may be worse than ten leads at $10 if the first ones do not pass verification, do not confirm the order, or do not reach the next stage of the funnel.
