Tag Archives: variables

Determining your Max Cost per Lead

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For most business Sales, not Leads, are most important; however, there are often both Lead and Sales goals. If Sales are having a good month, but Leads are off, it would be foolish to cut back on Spend or attempt to switch tactics to try to fix the Lead shortfall, as you would be giving up Revenue. But what if Sales happen over time? That is, what if a Lead today might not make a purchase until days / weeks / months later. In that case, you may want to make some adjustments, as there is an opportunity cost in the Lead shortfall.

In this article and in the attached Excel spreadsheet, Max CPL Worksheet, I’ll attempt to show you how to account for a shortfall in Leads or in the Revenue per Sale (RPS) as you optimize your campaigns during the month.

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Paid Search Math

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I’d like to show you how metrics are interrelated in Paid Search and how that can influence the tactics you take to meet your goals and the perception of your campaign’s performance.

For all of the different variables used in Paid Search (Impressions, Clicks, CPC, Cost, Leads, CPL, ROAS, etc.) each can be a Dependent (Result), Independent (Input) or Antecedent (Influence) variable. In addition, each variable can be used as a Goal in and of itself, as a Result or as an Input in optimization.

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