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Pay-Per-Click Leads:
WhatShouldYouPay?
PPC
Pay-per-click advertising is 

the fastest way to generate leads
for highly competitive keywords
2
What should you pay for a PPC lead?
QuestionAnd there are no easy answers
Good,
Common
and Tough
3
No benchmark exists for the cost of a lead
• No standard cost per action conversion rate

• Baseline conversion rates are different for 

every industry and their products
• Cost per actions differ between verticals 

and across products
• Advertisers can measure a variety of actions
4
What do your competitors pay?

• Ad networks don’t divulge 

competitor data
• You cannot know what 

keywords your competitors 

bid on 



(Despite what shady tool vendors may say)
5
What actions do we want to measure?


• Request for a demo
• Lead form completion
• Download
• Online chat
• Video view
• And so on…
CPAs vary…
6
CPAs vary…
7
Factors
for calculating CPA
7
1
Keyword mix
• May or may not include your brand name

(Brand keywords are generally inexpensive) 

• Short tail vs. long tail keywords

8
2
Ad networks
9
• Search
• Display networks
• Retargeting
Conversion costs differ by media platform
3
Geographic
locations
10
Costs differ by country
4
Offer types
11
Your campaign may feature a variety of offers
• For example, a product demo vs. a white
paper download = much different values
• Consider propensity to buy in assigning
values to actions
• Weigh CPA against the value of the lead

5
Competitive
campaigs
12
• A common strategy is to bid on searches
for the names of your competitors and/or
their products



A costly CPA strategy, but could deliver very
valuable results
6
Quality score
13
• A measurement of how relevant an ad 

is to the keyword and landing page
• Maintaining good quality scores allows 

for full ad delivery and lower CPCs
• Measured based on the likelihood 

of a click-through

A good quality score = lower CPC + higher position
7
Timing
14
• CPAs fluctuate by seasons
• Periods of heavy ad testing
• Holidays
CPAs vary…
3Additional
considerations
1
2
3
15
Length of sales cycle
• Numerous people may be 

involved in the decision
• Leads can take a long time to 

surface and qualify
• A lead may initially see an ad 

on a mobile device and convert 

on the desktop 

(Difficult to attribute to the PPC campaign)
16
Product cost
• A $10K product vs. a $100K product
• Expect lower CPAs for lower priced products

17
Lead actions
• Campaigns may 

have multiple CPAs
• Values differ 

by action

18
Technique for formulating lead costs
What you need to know to make this calculation:
• Leads from paid media in the prior year
• Sales from paid media in the prior year
• Revenue generated in the prior year
• Total cost of paid media
19
Example formula
How may sales came from paid media last year?
How much revenue did those sales generate?
How many leads came from paid media last year?
How much was the total paid media cost?
420 Sales
$270,000 ($99/sale)
1,000 leads
$240,000
CPA = $143
20
PPC platforms
21
We work with B2B companies with lead generation challenges.
Our search engine programs drive visitors to your site.
But we don't stop there — we make sure your visitors convert into leads.

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Pay-Per-Click Leads: What Should You Pay?

  • 2. Pay-per-click advertising is 
 the fastest way to generate leads for highly competitive keywords 2
  • 3. What should you pay for a PPC lead? QuestionAnd there are no easy answers Good, Common and Tough 3
  • 4. No benchmark exists for the cost of a lead • No standard cost per action conversion rate
 • Baseline conversion rates are different for 
 every industry and their products • Cost per actions differ between verticals 
 and across products • Advertisers can measure a variety of actions 4
  • 5. What do your competitors pay?
 • Ad networks don’t divulge 
 competitor data • You cannot know what 
 keywords your competitors 
 bid on 
 
 (Despite what shady tool vendors may say) 5
  • 6. What actions do we want to measure? 
 • Request for a demo • Lead form completion • Download • Online chat • Video view • And so on… CPAs vary… 6
  • 8. 1 Keyword mix • May or may not include your brand name
 (Brand keywords are generally inexpensive) 
 • Short tail vs. long tail keywords
 8
  • 9. 2 Ad networks 9 • Search • Display networks • Retargeting Conversion costs differ by media platform
  • 11. 4 Offer types 11 Your campaign may feature a variety of offers • For example, a product demo vs. a white paper download = much different values • Consider propensity to buy in assigning values to actions • Weigh CPA against the value of the lead

  • 12. 5 Competitive campaigs 12 • A common strategy is to bid on searches for the names of your competitors and/or their products
 
 A costly CPA strategy, but could deliver very valuable results
  • 13. 6 Quality score 13 • A measurement of how relevant an ad 
 is to the keyword and landing page • Maintaining good quality scores allows 
 for full ad delivery and lower CPCs • Measured based on the likelihood 
 of a click-through
 A good quality score = lower CPC + higher position
  • 14. 7 Timing 14 • CPAs fluctuate by seasons • Periods of heavy ad testing • Holidays
  • 16. Length of sales cycle • Numerous people may be 
 involved in the decision • Leads can take a long time to 
 surface and qualify • A lead may initially see an ad 
 on a mobile device and convert 
 on the desktop 
 (Difficult to attribute to the PPC campaign) 16
  • 17. Product cost • A $10K product vs. a $100K product • Expect lower CPAs for lower priced products
 17
  • 18. Lead actions • Campaigns may 
 have multiple CPAs • Values differ 
 by action
 18
  • 19. Technique for formulating lead costs What you need to know to make this calculation: • Leads from paid media in the prior year • Sales from paid media in the prior year • Revenue generated in the prior year • Total cost of paid media 19
  • 20. Example formula How may sales came from paid media last year? How much revenue did those sales generate? How many leads came from paid media last year? How much was the total paid media cost? 420 Sales $270,000 ($99/sale) 1,000 leads $240,000 CPA = $143 20
  • 22. We work with B2B companies with lead generation challenges. Our search engine programs drive visitors to your site. But we don't stop there — we make sure your visitors convert into leads.