Why Cheap Leads Can Be Expensive

A low cost per lead is one of the easiest metrics in performance marketing to celebrate. It is also one of the easiest to misunderstand.

If Campaign A generates leads at R80 and Campaign B generates leads at R160, the first campaign looks twice as efficient. That conclusion only holds if the leads have roughly the same probability of becoming customers.

The metric stops too early

Cost per lead answers a useful question: how much did it cost to generate a response? It does not answer the more important commercial question: what did that response become?

A campaign can lower CPL by broadening targeting or attracting low-intent users. The dashboard improves while the sales team gets busier with weaker prospects. That is not efficiency. It is moving the cost somewhere else in the business.

Compare the full funnel

Imagine Campaign A produces 100 leads at R80 each. Ten become customers. Media cost per customer is R800. Campaign B produces 50 leads at R160 each. Fifteen become customers. Media cost per customer is roughly R533.

The “expensive” campaign is actually the cheaper acquisition channel.

The optimisation target matters

Advertising platforms optimise toward the signals we give them. If the only signal is “form submitted”, the system learns to find more people likely to submit forms. Offline conversions, CRM integrations and value-based signals move optimisation closer to commercial outcomes.

The goal is not to abandon CPL. The mistake is treating it as the finish line. The better question is: cheap compared with what?