Cost per lead is a flat rate paid by advertisers to publishers for each lead generated through an online ad. It differs from pay per click and cost per purchase ads and can include a tiered scale or commission on sales. It is used to generate quality leads without purchasing cold lead lists.
Cost per lead is the amount a text link, banner or button ad advertiser receives for each lead. For example, if a wedding planning website runs a banner ad for a florist, there is a pre-arranged agreement between the publisher of the ad and the advertising company. Cost per lead is an advertising term associated with online advertising.
A cost-per-lead deal means that the florist agrees to pay the ad publisher each time someone who clicks on the ad submits their name, email address, and phone number for the advertiser to follow up on as a lead .
It is a different form of advertising than a pay per click deal. Pay per click deals pay the publisher each time someone clicks on the ad which redirects them to the advertiser’s website. A cost-per-purchase ad pays the publisher each time the ad drives a sale. The cost per lead arrangement requires that the advertiser be provided with tangible contact information which they can then use to convert the lead into a sale.
Each content publisher receives a special code. This special code indicates how the advertiser tracks where the lead comes from. This is how the advertiser knows who has to pay for the new lead.
The cost per lead is usually a flat rate. For example, the agreement between the publisher and the advertiser might be that for each lead the advertiser pays the publisher $1 US Dollar (USD). The flat fee can be $200 USD per cable. Lead amount typically refers to the potential value of the product or service the advertiser is selling.
For example, if the lead is for financial services, the fee is typically higher than selling a lead for buying a book. Some advertisers use a multi-level scale. With tiered scale, the more leads a publisher sends, the more the advertiser pays for leads from the publisher.
Some advertisers combine a cost per lead strategy with a cost per sale. In these situations, the publisher earns money by generating the lead for the advertiser. If the advertiser is able to sell the financial product or book to the lead, then the publisher receives a commission on the sale. Advertisers generally use the cost-per-lead strategy as a way to generate quality leads without having to purchase lead lists that may be cold and inferior in quality.
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