What is the difference between CPL and CPA?

Cost-Per-Lead (CPL) and Cost-Per-Acquisition (CPA) are both performance-based pricing models used in online advertising, but they differ in terms of the specific actions or conversions they measure and the associated costs for advertisers. Here's how CPL and CPA differ:

1. Definition:
   - Cost-Per-Lead (CPL): CPL refers to the cost incurred by advertisers for each qualified lead generated through their advertising campaigns. A lead typically represents a potential customer who has expressed interest in a product or service by providing their contact information or taking a specific action, such as filling out a lead form, requesting a quote, or signing up for a trial.
   - Cost-Per-Acquisition (CPA): CPA, on the other hand, refers to the cost incurred by advertisers for each desired action or conversion acquired through their campaigns. An acquisition can encompass various predefined actions, such as making a purchase, completing a transaction, downloading an app, subscribing to a service, or other measurable conversions that contribute to the advertiser's business goals.

2. Action or Conversion:
   - CPL: CPL focuses specifically on lead generation and measures the cost of acquiring qualified leads or prospects who have expressed interest in a product or service but may not have completed a purchase or transaction yet.
   - CPA: CPA encompasses a broader range of actions or conversions beyond just lead generation and can include sales, app installs, website registrations, form submissions, trial sign-ups, or other predefined acquisition metrics that represent valuable customer actions.

3. Cost Calculation:
   - CPL: The cost of CPL campaigns is calculated based on the total advertising spend divided by the number of qualified leads generated. Advertisers pay a fixed cost for each lead acquired, regardless of whether the lead results in a subsequent sale or conversion.
   - CPA: The cost of CPA campaigns is calculated based on the total advertising spend divided by the number of desired actions or conversions acquired. Advertisers pay a fixed cost for each completed conversion, whether it's a sale, app install, registration, or other predefined action.

4. Focus and Objective:
   - CPL: CPL campaigns are typically focused on lead generation and customer acquisition at the top of the sales funnel. The primary objective is to capture potential prospects and nurture them through the sales process, with the ultimate goal of converting leads into paying customers.
   - CPA: CPA campaigns can target various stages of the customer journey and align with specific business objectives, such as driving sales revenue, increasing app installs, expanding user base, or achieving other predefined conversion goals.

In summary, while both CPL and CPA are performance-based pricing models used in online advertising, CPL specifically focuses on lead generation and measures the cost of acquiring qualified leads, whereas CPA encompasses a broader range of actions or conversions and measures the cost of acquiring customers or achieving predefined business goals.