• Drive more leads and revenue from Adwords with Landing Pages
  • The Cost Per Lead Calculator – Better Allocate Your PPC Spend

    The pay-per-click landscape has become so saturated that only the most analytical marketers are able to continuously turn a profit from their paid search, display and social campaigns.

    Data-driven marketers who are able to effectively manage PPC campaigns to a target cost per conversion (a.k.a. cost per lead) will continue to see campaigns with a predictable, repeatable profit margin.

    Everybody else is most likely paying too much to acquire customers.

    As it stands, this means that more sophisticated and aggressive PPC marketers will eventually find the “ceiling” price for a click and will be forced to find operational efficiencies and higher conversion rates to improve their margins. Less savvy PPC marketers will be forced to find cheaper, less qualified traffic sources or get out of the PPC game altogether.

    The most important metrics for PPC marketers

    The PPC equation
    Cost per click (CPC) and conversion rate (CR) are the two most important factors for improving the cost per conversion. The problem is, they are independent variables and don’t always move in unison.

    As costs per click rise, cost per conversion will also rise assuming conversion rate stays constant. Therefore,
    marketers that focus on optimizing for lower CPCs and/or higher conversion rates will consistently achieve better results and remain competitive.

    Should you focus on improving cost per click or conversion rate?

    Ideally, both! But knowing how to set the right expectations and manage your time is a bit trickier. Our clients typically understand the relationships between these three variables but sometimes the details get a little murky when combined with all the other PPC metrics that matter to campaign performance.

    At Workshop Digital, we built this simple but powerful calculator to help our teams understand and explain the relationship between cost per click, conversion rate and cost per conversion:

    CPL Calculator
    Click to view the calculator (and read on to learn how to use it).

    Our clients love it and we’re offering it up today to help you prioritize your time to achieve a target cost per lead for your PPC campaigns. As I mention in the video below, the calculator is a great way to determine where to focus your optimization efforts (whether that be in improving your ads or the conversion rate on your landing pages).

    Video: See how to use the cost per lead calculator

    Focus on the right metrics to beat the competition

    PPC marketers often become enamored with surface-level metrics like click-through rate, average position or Quality Score. These data points are helpful in the right contexts but they don’t directly impact cost per conversion.

    If you don’t focus on improving your cost per conversion with smart bidding and conversion rate optimization, ultimately you risk losing customers to your more efficient, conversion-focused competitors. Grab the calculator and run your ideal vs. current numbers today.

    About Andrew Miller
    Andrew is the Co-Founder and Director of Operations at Workshop Digital in Richmond, VA. He loves PPC, SEO and CRO but despises acronyms. His favorite part of the job is building teams, tools and systems that empower people to work smarter, not harder.
    » More blog posts by Andrew Miller
    • Joe Savitch

      Awesome as always! Given that most agencies charge a fee for PPC management it would be a nice v2 to have the ability to add in some kind of margin either a % or fixed number. That is a math problem I’m trying to solve for many clients recently.

      • Andrew

        Thanks! I can send you an unlocked copy if you want it. Or you could increase the CPC by the markup amount. We don’t charge a % markup but it’s pretty common so I see the use case there.

    • John Redfield

      Very cool table. But I really don’t see why one wouldn’t just use Adwords “cost per conversion” metric?

      Also a small point, conversion rate is definitely key and should be the main focus, but CTR, avg position and QS do factor into keyword CPC, so they do have some impact on CPL/CPA.

      • Andrew

        CPC and Conversion Rate are more easily measured and manipulated than QS, which is really an input for CPC. Average Position and CTR don’t directly impact CPA but are indicators of where to start improving PPC campaigns.

    • NG

      Very nice and well explained!

    • Interesting and very useful. Thank you

    • Priya Gupta

      Very informative post.

    • ZakkasSt

      Great stuff. Kudos

    • thank you