Why Cost Per Lead Programs Don't Completely Suck

As the name implies, it's all about acquiring information or feedback about individuals who are actively seeking information about prospective purchases. When I was back in sales school (Methuselah was my sales manager before he retired), they used to call the gradation of qualification: Suspect-Prospect-Client.

The definition of "client" is clear; it's someone who has purchased the product. A "suspect" is someone who you believe might become a client, but has not given you specific information to confirm that. And then 'prospect' or 'lead' falls in between the two. These are people who, by their deed or word, have indicated a greater likelihood to buy something.

If this seems unnecessarily wordy, you are probably right. But the definition of what constitutes a "lead" varies widely and directly affects pay rates for publishers. Some programs define a lead as someone who has completed 10 pages of extremely personal data and has stopped just short of providing a credit card. At the other extreme are email capture programs that require an email address...occasionally a confirmation, and that's all.

When evaluating a per lead program, balance is everything. At first sight, a program that pays $17 per lead may seem like good value. However you must consider erosion of interest. Erosion of interest happens very quickly on the internet. With each successive click or interaction a significant percentage of people simply lose interest. The "physical exertion" of clicking from page to page causes about 70% of people to drop off. This multiplies very quickly, so to do some sample math for a lead program:

3 pages of content -> 1,000 visitors click through. -70% -70% -70% = 27 visitors on the last page. So far so good, but that's just for looking at web pages. Try asking them for a credit card or detailed personal information and the erosion rate increases to 90% or more.

3 pages of intrusive questions -> 1,000 visitors click through. -90% -90% -90% = 1 visitor. Lets face it. Out of 1, 000 visitors someone's going to complete the form. But working backwards, that's a a raw click through payment of $17.00 / 1,000 clicks or 1. 7 cents per click.

The art of evaluating cost per lead programs involves a lot of common sense, really good matching of advertisers and a calculator.