Pay per lead marketing (PPL) – also known as the cost per lead model – is an online advertising method in which payment is based solely on leads. In a pay per lead agreement, the advertiser pays only for visitors who “convert” or sign up. In essence, pay per lead is a type of affiliate marketing where the advertiser pays the affiliate based on the number of leads they drive to your page or site.

What is a lead?

In pay per lead marketing, a converted lead is akin to a paying customer or potential customer. However, a lead can mean different things to different businesses. A qualifying lead for one business might be a customer who completes an online purchase. For another, it might be a site visitor who signs up or leaves an email address.

What is an affiliate?

In the marketing world, an affiliate is an individual or organisation that is officially attached or connected to your business. The definition of an affiliate relationship in this context is one where one person or company affiliates with another to sell products. A pay per click affiliate might be a blogger, social influencer or celebrity who is paid to endorse your products or services online.

Why is pay per lead marketing used?

Pay per lead (PPL) is used by many businesses today as an alternative to the traditional agency model known as retainer marketing. A marketing retainer is essentially an agreement between a business and a full-service marketing agency. In this case, the agency works from a monthly or quarterly budget to provide a wide range of advertising services.

Why PPL is simply better for businesses

Pay per lead marketing is simply better for businesses than traditional retainer agreements. Retainers tend to be non-specific and held over long periods of time. The benefits of a retainer agreement are that the marketers become very familiar with the brand, so can help them better execute their long-term business goals. However, the retainer model also has many disadvantages for businesses, including:

  • Greater risk: Despite having a retainer agreement with your marketing agency, there is no guarantee that retainer marketing efforts will produce results. This means all of the risks are attached to you – the business – rather than the advertiser.
  • Not cost effective: Although a retainer is usually cheaper than ad hoc services, it’s not consistently good value. During quieter months, you might struggle to find enough advertising work to cover the cost of your retainer agreement – leading to unused retainer time and potentially wasted money.
  • Lack of transparency: With a retainer agreement, there’s no way of knowing how your time and retainer money is spent. While most agencies should be transparent regarding the breakdown of the retainer time and costs, there is no guarantee you’re getting the best services for your money. This comes down to one simple fact: the cost of a retainer is fixed, regardless of the results.
  • Not specialist: While an experienced marketing agency is likely to be familiar with all forms of digital advertising, each one will specialise in different areas. By using an agency that specialises in SEO for all of your advertising, you have the advantage of working with one vendor and having fixed costs, but you might not be getting the best overall service for your money.

Advantages of pay per lead marketing

The pay per lead model comes with many advantages – the obvious benefit being that you pay for results, not promises. Other benefits of PPL include:

  • Higher quality traffic: Leads mean nothing if they don’t convert to sales, which is why the quality of your traffic matters more than the quantity. With targeted pay per lead marketing, affiliates already have an established audience – whether they are successful bloggers, influencers or celebrities. An experienced affiliate advertiser should be able to give you a profile of their audience so you know whether they’re likely to become customers of your business.
  • Budget savings: The PPL model is more cost-effective than other advertising methods because you only pay for leads. Just be aware of the difference between pay per lead and pay per click, as these can mean different things for your business. A website or page click could be a mistake, and it doesn’t always guarantee custom, for example.
  • Scalable results: With PPL, it’s easier to record and monitor your return on investment (ROI). For best results, set up an ad campaign with a fixed price per lead so you can see how each conversion affects your bottom line.
  • Longevity: A PPL advert will sit on your publisher’s platform for a long time. Consider how many times a successful blog post can be shared, retweeted and reposted on social media over the course of months or years. Each time someone interacts with the post, Google’s algorithm responds by ranking the page higher in its SERPS, meaning it generates new interest and more leads for your business.
  • Better brand awareness: With more clicks comes better brand awareness. While a social media campaign or blog post may drive leads to your website, an affiliate ad will bring people back to your page time and time again. This means you’ll enjoy more exposure over a prolonged period rather than putting all your eggs in one marketing team’s basket.

The bottom line: retainer marketing vs PPL

Retainer marketing may seem like a budget-friendly advertising method, but it can be incredibly risky for your business. With PPL, you only pay for actual results. This means it’s easier to track leads and conversions and scale your marketing efforts accordingly.

How to integrate PPL into your business

If you want to avoid high set up costs and no guarantee of a return on investment, PPL is an excellent advertising choice for your business. At Simply Media, we are driven by performance, offering a number of B2B and B2C services. We work strategically with our clients to drive scalable results. That means we prioritise growth for your business in everything we do. We are an outsourced marketing team who specialise in PPC that leads to real conversions. For more information, call us on 0161 818 8342 today.