Cost Per Lead (CPL) Optimization

The cost per lead (CPL) is what you pay to get new leads. These expenses are a result of any advertising activities you perform to generate leads and encourage conversions.

To determine your CPL, you have to use the CPL formula. This formula makes it simpler for you to estimate your cost per lead. To calculate your CPL, divide the cost of your advertising campaign cost by the total attributed leads.

For example, if you spent $100 on a PPC campaign and obtained 10 leads, your CPL would be $10, meaning you spent $10 for each lead you converted.

chalk board with cpl written

Is Your CPL Good or Bad?

Whether or not you have a good or bad CPL depends on how much your leads spend when they convert. If your CPL is $10 and your leads typically spend around $50-$100, this is a good CPL rate. If they spend less than your CPL, you will definitely want to change some things around.

The CPL formula can help determine different aspects of your campaign. You can use it to determine how many leads you need to get or how much you should spend on the campaign. Having your CPL in mind when making advertising decisions can be very beneficial.

Tracking CPL

Here are a couple of different marketing strategies you can use to track CPL:

PPC Advertising

PPC advertising offers a great way to track CPL. These are the ads that appear at the top of search results right above organic listings and attract the leads that are most ready to convert.

When you run a PPC campaign, you can easily track your CPL. PPC allows you to set the budget that works for your business, so you have more control over your CPL. Setting a budget that keeps your CPL low will help you turn a better profit.

PPC advertising is also effective in getting valuable leads from people who are ready to convert.

Social Media Ads

You can easily target those who are interested in your products using social media marketing. Social media marketing increases conversions for your company, which benefits your CPL.

Impressions and conversions are the two major objectives of social media ad campaigns. When you concentrate on impressions, you don’t necessarily worry about who clicks on your advertisement, you just want it to be seen by as many people as possible. Because you aren’t focused on developing ad content that encourages your audience to click on it, this may result in a higher CPL.

You could also focus on increasing conversions. Social media ads are placed in front of leads who are more likely to convert since they are targeted to the criteria you set.

Similar to PPC, you choose the budget for your social media advertising campaign. Your campaign’s success and your CPL will be impacted by the amount you choose.

The use of social media ads to track your CPL is highly recommended. Since you control the budget, you have more influence over your CPL.

Reducing Your CPL

Your advertising strategy might not be generating as many leads as you would like, and in turn, your company is experiencing high CPL. So, how can you increase the effectiveness of your campaign to reduce CPL?

Narrow Down Your Target Audience

Focusing more closely on your target market is a top solution. If your target market is relatively large, it’s possible that your lack of targeting within your advertising strategy is keeping you from seeing the results you want. You should focus on your target audience more closely to achieve the desired outcomes.

Let’s say, for example, that you own a shoe store for women, men, and children’s shoes; in this case, you would want to concentrate on one specific subgroup and create subgroups with similar characteristics. This information can be based on factors like demographics, marital status, socioeconomic status, and more.

Creating these subgroups will then help you create ads that appeal more precisely to those groups, so you aren’t wasting money reaching out to leads that aren’t interested.

Any campaign can greatly benefit from audience segmentation. It helps you deliver the perfect message at the perfect time, and because your audience will find your ad content more enticing, you’ll be able to produce a more successful campaign for your company.

Create Relevant Content

For generating conversions, relevant content is essential. Delivering content that is in line with your audience’s interests is necessary if you want to increase conversions.

This is a situation where audience segmentation helps your business. You can determine what content your audience responds to the most when you segment your audience to provide them with the content they care about.

Not every member of your target market has the same expectations for your brand. A shoe store serves a variety of customers in addition to men, women, and children. They appeal to a variety of people, including parents, grandparents, young adults, teenagers, and more.

The store wouldn’t get the best results if they decided to send one message to all women interested. Instead, grouping those women according to their marital status, family situation, or work status would make it easier to communicate with each of those groups in a way that is more pertinent to their needs.

Ads for children’s shoes wouldn’t attract a young, single professional woman, but a married mother of two kids would definitely be interested in such ads. Despite the fact that they are both women, they have different relationships with the shoe brand. In order to give more pertinent material, it’s crucial to divide your audience based on these distinctions.

Increased engagement results from relevant content. If your content meets their wants, your audience is more inclined to interact with it.

A/B Testing

If you don’t get it right the first time, it’s okay. The best strategy for running paid advertisements is to always have at least two of them active at once so that you can run A/B tests. You won’t be able to compare, evaluate, and learn from the outcomes if you’re only running one advertisement at a time.

Use one advertisement as the control and one as the variable, using the scientific method. A conclusion may be difficult to reach if there are too many factors. Ensure that each advertisement is shown an equal number of times, and rotate them continuously. To learn what connects most with your audience, only make one change at a time.

The winning ad is the one that generates more leads more effectively, lowering your CPL in the process. The ads that people click on but don’t convert from are not your winners.


Remarketing is a fantastic strategy for converting leads. People will occasionally view your advertisements and show curiosity, but they often won’t act on them. With a remarketed advertisement, you may be able to push them into becoming a customer.

These advertisements are relatively inexpensive to run and are incredibly powerful. Remarkable advertisements make consumers consider making another purchase or employing your services once more. It frequently serves as their final prod toward conversion.

Remarketed advertising can help increase conversions for your company, lowering your CPL and generating revenue.

New Target Knows Leads

Knowing your CPL and implementing strategies to keep your CPL low is essential to effective lead conversion and revenue generation. At New Target, we are experienced in lowering advertising costs to optimize profitability; contact us today!

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