Attracting the right leads, prospects who actually want to buy something from you, is one of the biggest challenges for the B2B marketer. You can pay for clicks or for impressions, and while both options are efficient, neither can guarantee you a high volume of truly interested people. Because of this, here comes the Pay-Per-Lead principle is used, which ensures the acquisition of real prospects and makes the acquisition easy to calculate.
What is Pay-Per-Lead advertising?
Unlike pay-per-click (PPC) or pay-per-Impression-models is Pay-per-lead-advertising is a form of cost-per-acquisition advertising. Basically, you don't pay for impressions or clicks on a web or landing page, but for the delivery of a prospect who has expressed specific interest in your product or service.
In other words, you pay to acquire a qualified lead through a sale, subscription, or other transaction you specify.
How does payment per lead work?
The structure of a Pay-per-lead-campaign is not too different from the structure of a pay-per-click campaign. The difference is that you work with a referral partner (the advertiser of the campaign). The referral partner is then paid to generate a predetermined number of leads for you each month.
In addition to a set number of leads (typically based on volume or budget), you can determine which leads are high quality for you. Accordingly, you need to know what your ideal leads should look like before you launch your campaign. To do this, go back to your CRM or sales numbers and identify any trends that your most successful customers have in common.
For example, the following factors can be determined:
- Minimum annual turnover (of your successful customers)
- Total number of employees or locations
- the most profitable industries
- Number of users (which may be important if you are in a SaaS model company).
- How much you are willing to pay for a lead
When should I think about Pay Per Lead?
If you are struggling to generate sales-ready leads with the search campaigns you are running, is Pay-per-lead-advertising is a possible option. It is ideal for hard-to-reach industries (so are most B2B markets). Some areas that are particularly important for Pay-per-lead-advertising include:
- CRM, IT or SaaS company
- Professional services and advice
- Business Customers, Credit Unions and Financial Services
- Industry and manufacturing
- Legal services
- Real Estate
- Medicine and healthcare
What are you willing to invest?
Typically based Pay-per-lead-advertising on a fixed fee, which allows you to keep track of your acquisition costs. Moreover, you pay only for the desired result, i.e. as many potential customers as possible, instead of junk clicks, which are not converted into real leads.
In short, you only pay for qualified leads that are delivered to you based on the criteria you set.
PPL is a popular choice for companies looking for a fast and cost-effective method of lead generation. It saves companies the cost of developing and maintaining their own lead generation system and allows them to reach potential customers without having to make a prior investment. Thanks to the precision offered by this model, lead generation costs can be optimized.
10 Advantages of Pay Per Lead Advertising
- Targeted advertising: you can choose who sees your ads, so you don't waste money on people who aren't interested.
- Cost effective: you only pay when someone becomes a lead, so you're not throwing money out the window for clicks or impressions that don't matter.
- Measurable results: You can track how many leads you get and see if it's worth spending the money.
- Flexibility: You can adjust your budget and targeting as needed to get the best results.
- High-quality leads: You're paying for leads that meet your criteria, so they should be pretty good.
- Increased brand awareness: people see your ads and learn about your brand.
- Improved reputation: by generating leads who are interested in what you offer, you make a good impression.
- Simplified sales process: you're paying for leads who are already interested in your stuff, so the sales process should be smoother.
- Increased efficiency: by focusing on leads that are more likely to convert, you can save time and effort.
- Greater control: you have more control over your marketing budget and efforts because you only pay for leads that meet your criteria.
One disadvantage of the PPL model is that it is often difficult to determine the quality of the leads. Since companies only pay for lead generation, it is important that the leads are relevant and of high quality to ensure that the investment is profitable. Another drawback is that since most PPL programs are based on a Pay-Per-Lead-If the leads are not generated on a per lead basis, some partners tend to increase the number of leads generated rather than maximize the quality.
9 Disadvantages of Pay Per Lead Advertising:
- High cost per lead: If you have to pay a lot to generate a lead, costs could quickly get out of hand.
- Contingencies: You may end up paying more than you planned if the leads aren't as good as you hoped.
- No guarantee of conversions: Although you'll get quality leads, there's no guarantee they'll actually buy.
- Keine Kontrolle über den Traffic: You have no control over how many leads you get because you take full risk.
- Slow growth: Pay-per-lead-Advertising can be slower than other methods when it comes to, Traffic build up.
- Poor quality of leads: You might get leads that aren't really qualified or aren't really interested in what you're offering.
- Difficult tracking: It can be difficult to measure the performance of Pay-per-lead-campaigns and to measure them.
- High dependence on the target group: If you have a niche that is hard to reach, it might be difficult to generate enough leads.
- Difficulties with integration: Pay-per-lead-Advertising can be difficult to integrate if you already have other ad campaigns running.
PPL is a very useful model that is especially useful for companies that are in the early stages of lead generation. It is a cost-effective and efficient way to generate leads that can be useful for a wide range of businesses. It is also a good solution for companies that specialize in lead generation.
9 Examples of Pay Per Lead Advertising
- A company, could have a Landing Page where interested parties can sign up for a newsletter. The company would then pay for each person who signs up for the newsletter.
- A real estate agent could solicit prospects for submitting information on available properties. The broker would pay for each form filled out by a prospect.
- A company, could have a Landing Page where users can sign up for a free trial membership. The company would pay for each person who signs up for the trial membership.
- A company, could have a Landing Page create a website where users could sign up for a free consultation or estimate. The company would pay for each person who signs up for the consultation or estimate.
- A travel company to solicit prospective customers for submitting information on available trips. The travel company would pay for each form completed by a prospect.
- An online store could attract prospects to submit information about specific products or services. The online store would pay for each form filled out by a prospect.
- A company, could have a Landing Page where users could sign up for a free trial of a software product. The company would pay for each person who signs up for the trial.
- An educational institution could solicit prospective students for submitting information about available courses or programs. The educational institution would pay for each form completed by a prospect.
- A company a Landing Page create a site where users could sign up for free membership in a loyalty program. The company would pay for each person who signs up for membership.
Pay-Per-Lead is a very useful model that allows companies to pay for generating leads and potential customers. It is a cost-effective and accurate way to generate leads and is a useful solution for many businesses, whether they are at an early or advanced stage of lead generation.« Back to Glossary Index