3 Benefits of Using a Cost Per Lead (CPL) Calculator

When you run a pay-per-click (PPC) campaign, it is important to look at all the factors that affect your business’s ability to earn a profit. One of the most important factors is the cost per lead (CPL). By using a CPL calculator, you can figure out how to lower the cost of your leads.

On this page, we’ll discuss how to utilize PPC, the benefits of using a cost per lead (CPL) calculator for your PPC.

What is PPC?

PPC is a paid advertising method. When you conduct searches, you’ll see a list of paid ads at the top of the search results. These are tagged with the word “Ad” to indicate they are paid content.

PPC ad example plumbers

To start using PPC, you need to select keywords. Keyword selection plays a significant role in PPC because they help trigger your ad to appear in the search results when someone uses your selected keywords. It is important that you pick keywords that will generate the best traffic.

If you want to find the best keywords for your campaign, you need to conduct keyword research. This will help you find keywords that are right for your campaign. There are numerous keyword research tools you can use to find keywords for your campaign.

It is important that you focus on long-tail keywords for your campaign. Long-tail keywords are keywords that contain three or more words. An example of this is “barbershops near Harrisburg, PA.”

Long-tail keywords are specific, so you know that only qualified leads are using your keywords. If someone just searched for “barber,” they could be looking for a barbershop, the definition of the word, or how to become a barber. You don’t know the user’s search intent, so it is best to rely on long-tail keywords to generate better traffic.

Once you have your keywords selected, you’ll bid for your ad’s placement. You’ll need to set your maximum bid, which is the amount you are willing to pay each time someone clicks on your ad. This amount is flexible and can be changed at any time.

Your maximum bid and quality score will determine your ad’s placement. Once you have your placement, you will be able to launch your PPC campaign.

Once you launch your campaign, people will click on your ad. Many of these visitors will become leads. Leads are generated by the number of visitors multiplied by the conversion rate.

Let’s say that you attract 100 visitors to your ad and end up with a conversion rate of 40%. If you take 100 times .4, you’ll get a total of 40 leads that are attributed to that ad campaign.

So, how do you figure out your CPL?

CPL Calculator Formula

Your CPL is the cost for your Google Ads spent divided by the total attributed leads. Let’s say you spent $1,000 on this campaign. If you take $1,000 divided by 40 attributed leads, you’ll get a CPL of $25.

This means you’re paying $25 per lead to get them to convert. It also means that you need them to purchase more than $25 worth of goods or services to make a profit. This presents a challenge for your business because you want to maximize your profit.

3 benefits of using a CPL calculator

A CPL calculator is a great way for you to figure out how to run your campaign. There are numerous benefits to using this tool.

1. It helps you maximize your budget

Your budget is an important part of your campaign. You want to stretch every dollar to get the maximum return on your campaign. A CPL calculator can help you see different angles of your campaign.

This calculator helps you see the different campaign outcomes as well. You have the choice to enter two of three fields into the calculator: Your Google Ads budget, the number of leads, or the CPL. Your ability to play around with this calculator helps you produce a better campaign.

cpl calculator example

You can enter different numbers into the calculator to see how they will affect your campaign, whether you’d like to see how many leads will result from a budget or how much of your budget will reach a campaign goal.

When you use a CPL calculator, you get a better sense of what you need to achieve with your campaign. You will create a campaign that will help you maximize your budget.

2. It helps you set a goal for your campaign

When you create your PPC campaign, you may not know what you want to achieve. A CPL calculator can help you figure out what campaign results you want to reach.

For instance, you may only know your budget. You have a set amount, but what should you try to achieve with that amount? A CPL calculator helps you discern what you’re able to achieve with your budget.

You can figure out how many leads you want to obtain or how much you want to spend on each lead. It helps you shape your campaign and create a campaign that drives results for your business. You can create a goal that is feasible for your business.

3. It helps you produce a more effective ad

A CPL calculator tells you what you can expect to achieve and how to set up your campaign. So, a better campaign will help you create a more effective ad.

You can incorporate elements that will attract more leads and get them to click on your ad. For instance, you can include ad extensions that incorporate contact information, additional links, or additional information into your ad.

When you know what results to expect from your ad, you can develop a better campaign for your business.

3 tips for reducing CPL

When you use your CPL calculator, you may find that your CPL is high. There are numerous ways you can reduce your CPL to help your business earn more leads for your budget.

1. Choose more specific keywords

As stated previously, you need to focus on long-tail keywords. These keywords will produce the best results for your campaign. Short-tail keywords have a high CPL and generate less credible leads.

This means that you will waste money on visitors that don’t convert. To maximize your budget, you need to invest in choosing more specific keywords. Long-tail keywords will help you create a campaign that lowers your CPL.

Long-tail keywords are specific, so they cost less. You can earn more leads with your budget, which enables you to lower your CPL. Using longer keywords in your campaign is an effective way to reduce your CPL.

2. Integrate negative keywords

When you select your keywords, you want to appear in relevant search results. If you appear in irrelevant search results, you’ll obtain less credible leads and increase your CPL. To ensure your ad ends up in the most relevant results, you will want to identify negative keywords.

Negative keywords help eliminate your potential to appear in irrelevant search results. It reduces costs by eliminating keywords that aren’t relevant to your ad. This helps you eliminate avenues that cost you money but don’t bring you a return.

If you owned a business that sold only ice cream, you wouldn’t want to appear in search results for “ice cream cake.” In this case, “cake” would be a negative keyword that you could add to your list.

Adding negative words will help Google Ads or other tools know not to show your ad in results containing that word. It will help you eliminate irrelevant search results for your business.

3. Improve your quality score

Your quality score greatly affects your PPC campaign. It determines where your ad placement falls. A high quality score is critical for your ad so that it ranks higher.

Your quality score is composed of your clickthrough rate (CTR), ad relevance, and landing page relevance. If you have a high CTR and your ad is very relevant to your keywords, you will have a higher quality score.

Let’s say Competitor A has a maximum bid of $6.00 and a quality score of 2, while Competitor B has a maximum bid of $1.00 and a quality score of 10. You may think that the higher bid would get the top position because they are willing to pay more, but that is not true. Competitor B has a more relevant ad (a higher quality score), so Google will rank their site higher than Competitor A.

This means that if you improve your quality score, you can have a lower maximum bid. When your ad is the most relevant and has the highest Google Ads score, you set the tone for the amount your competitors pay. That means you can set lower bids, which will lead to a lower CPL.

You can improve your ad by ensuring that you are using relevant keywords and ranking for them. This will help you produce a better PPC campaign for your business.

WebFX will help you generate more valuable leads

When you run your PPC campaign, you want to generate valuable leads that will convert. By using a CPL calculator, you will help your business lower your CPL cost and obtain more leads. At WebFX, we have years of experience creating PPC campaigns that generate better leads for your business.

We’re a full-service digital marketing company that specializes in customized PPC campaigns. We have a team of 500+ experts that are dedicated to your campaign. Our award-winning team of experts are Google Ads Certified and can help you create a campaign that works for your business.

If you’re looking for results, we know how to drive them. To date, we’ve driven over $3 billion in sales and over 7.8 million leads for our clients. We focus on driving success for our clients first.

Our clients love the work we do, too. In fact, we have over 1020 client testimonials from a variety of industries. Check them out to see what its like to partner with a top PPC company like WebFX!

Get started today

If you’re ready to start driving in better leads for your budget, contact us online or call us today at 888-601-5359 to speak with a strategist.

We look forward to helping your business grow!