What is the difference between cost per lead and cost per click?
Cost per click (CPC) is what an advertiser pays for each click on an ad. Cost per lead (CPL) is what the advertiser pays for each potential customer who calls, books, or submits a form.
A click is a visit. A lead is a person who asked for a quote. For a moving company, the second one is what turns into booked jobs.
| Cost per click | Cost per lead | |
|---|---|---|
| Measures | Cost of each ad click | Cost of each call, form, or booking |
| Formula | Total click cost ÷ clicks | Total cost ÷ leads |
| Where Google Ads shows it | "Avg. CPC" column | "Cost / conv." column, when conversions are leads |
| Needs conversion tracking | No | Yes |
How is cost per click calculated?
Google defines average CPC as "the average amount that you've been charged for a click on your ad," calculated "by dividing the total cost of your clicks by the total number of clicks."
What you actually pay per click is set in the auction. Google says advertisers are often charged less than their maximum bid, because "you only pay what's minimally required to clear the Ad Rank thresholds and beat the Ad Rank of the competitor immediately below you." See what is Quality Score.
How is cost per lead calculated?
Divide total ad cost by the number of leads. Google Ads reports this as cost per conversion, which it says "tells you how much, on average, each of your conversions cost," calculated by "dividing your total cost by the number in your 'Conversions' column."
That number only means cost per lead if the conversions being counted are leads, such as phone calls, quote forms, and bookings. If page views or button clicks are also counted as conversions, the figure isn't a true cost per lead.
How do the two compare in practice?
An example with made-up numbers:
- A campaign spends $2,000 and gets 500 clicks: CPC is $4.
- Those clicks produce 40 calls and quote requests: CPL is $50.
- If 10 of those leads book a move, the cost per booked job is $200.
A campaign with a higher CPC can still have a lower CPL if more of its visitors become leads. That's why CPC alone can mislead: it measures traffic cost, not customer cost.
Which metric should a moving company use?
Use cost per lead, and go one step further where possible: cost per booked job. Leads vary in quality, and a cheap lead that never books costs more than it looks.
Getting there takes tracking:
- Track calls, not only forms. See what is call tracking.
- Import booked jobs from the CRM. See offline conversion tracking.
CPC is still useful as a diagnostic, for example to spot rising competition in an area.
How does pay-per-lead pricing fit in?
Some ad products charge by the lead instead of the click. With Local Services Ads, Google says "you pay for valid leads," and leads "determined to be invalid or low quality are not charged." Performance Max campaigns with pay-per-lead goals work the same way: "Instead of paying for website clicks, your business pays only when a customer contacts you directly through your ad, such as through a phone call or message."
In those cases, cost per lead is the price itself. For more, see pay-per-lead vs. pay-per-call.