Which advertising pricing model involves paying for leads generated?

The advertising pricing model that involves paying for leads generated is known as Cost Per Lead (CPL). In this model, advertisers pay specifically for each lead that is generated through their marketing efforts. A lead typically refers to a potential customer who has expressed interest in the advertiser's product or service, often through actions such as filling out a form, signing up for a newsletter, or requesting more information.

This model emphasizes the quality of leads over mere impressions or clicks, making it a valuable option for businesses looking to optimize their advertising spend based on the actual interest demonstrated by potential customers. Unlike Cost Per Click (CPC), where advertisers pay for each click regardless of whether it leads to a conversion, or Cost Per Action (CPA), which requires a specific action beyond expressing interest, CPL directly focuses on lead generation, aligning the cost incurred with tangible outcomes in terms of potential customers.

Understanding this model is crucial for businesses aiming to refine their marketing strategies and ensure they are effectively capturing potential customers while managing their advertising budget efficiently.