Pay Per Lead (PPL) : Digital advertising payment model in which payment is based solely on qualifying leads.
What is Pay Per Lead (PPL)?
A pay per lead is a type of cost-per-acquisition (CPA) program that compensates an affiliate for getting prospects.
Pay Per Lead or PPL is pretty simple, an advertiser may pay for each visitor who clicks on an advertisement or website and then fills out a form or downloads an document in exchange for supplying his/her details.
With pay-per-lead, the leads come to you first, then you pay!
When is a PPL model used?
These may be sign-ups on forms, free trials, software downloads and many others.
Pay per lead is a great choice for the vast majority of software companies.
PPL programs are a great way for both advertisers and publishers to benefit from cost-effective affiliate marketing.
Small marketers, ideal affiliates and even newbies can generate lucrative monthly revenues by using these programs.
How is calculated?
Affiliate marketing is a lucrative business with the lowest barriers to entry.
One general rule of thumb to determine your average cost per lead is to consider the amount you’d be willing to spend to acquire a customer.
As a model, imagine that the lifetime value of your customer is around $1,000.
To gain another $1,000 customer, you might be willing to spend around 10% of the total lifetime value ($100).
That $100 is the cost per acquisition.
The next part of this formula is dependent on your sales team.
If they typically close 10% of all incoming leads (close rate), multiply that by your CPA (10% x $100).
The resulting $10 is an average cost per lead estimate.
Average = CPA / Close Rate
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