You’ve probably noticed that your average cost per lead (CPL) has been moving upward over the last year or so. Whether your franchise brand focuses on food, wellness, home services or something else, it’s been getting more expensive to move consumers into your marketing funnel. From Google, Meta and TikTok to radio and TV, chances are that you’re paying more to connect with your prospects.
What’s that all about, anyway?
More and more companies these days are vying for consumers’ attention and dollars, using a finite amount of ad space. And as the law of supply and demand tells us, the result is higher prices.
Some advertisers have deep pockets, too. Marketplace Business News reports that after an initial decrease in spending at the outset of the COVID-19 pandemic, large companies quickly began overcompensating, spending big bucks to gain dominance. Digital marketing is auction-based, so it’s no surprise that ramped-up spending drove prices higher.
2) The ever-growing appeal of social media.
Social media’s popularity is huge and continues to expand. According to Statista, as of April 2023, 4.8 billion people were using social media worldwide. And that number is projected to reach almost 6 billion by 2027.
Where there are consumers, there are advertisers trying to court them. Worldwide spending on social media ads will increase 9.3% in 2023 and reach $207.1 billion, says Statista.
Despite social media’s popularity, it still costs less than traditional media for lead acquisition. So, advertisers continue to gravitate toward social media, pushing up its prices.
3) Inflation and other economic factors.
Though there’s now talk about the Federal Reserve potentially pulling off a “soft landing” for the U.S. economy, our long stretch of inflation and stratospheric interest rates has caused consumers to exercise more caution with their dollars. In July 2023, McKinsey reported that although U.S. consumers felt relatively optimistic about the economy, real year-over-year spending had declined for the third month in a row.
4) Political campaign season. 🇺🇸
You’ve doubtless noticed that we’re heading toward an election cycle. That means political advertisers are gobbling up much of the available ad space, and they’re willing to pay top dollar.
But wait — there may be a silver lining here! Your target audience will likely be more receptive to nonpolitical advertising. In a sea of political posturing and propaganda, consumers will probably appreciate seeing ads featuring delicious food or a pleasant retail experience.
5) Annual buying seasons.
During certain times of the year, the competition for digital ad space becomes even tougher. Anyone in the children’s services and education space, or in the world of retail generally, knows about “BTS” ¾ back to school. And of course, the wintertime holidays, Valentine’s Day, Halloween and other special occasions can make it costlier to capture leads.
What can you do about the rising cost per lead?
In addition to acknowledging reality and allocating your media dollars carefully, here are four other approaches to consider:
Effective guerilla and experiential marketing campaigns can capture remarkable attention, press and brand recognition without your having to actually pay for media placement.
You can also get creative with your media buys. For example, if you find that traditional 30-second broadcast spots have become too expensive, you might want to opt for shorter commercials. A well-done 15-second spot might go a long way toward earning you new leads.
Remember the value of awareness.
Awareness advertising doesn’t directly convert people into leads. Instead, it makes them familiar with your brand so that when they are ready to buy your product or service, they’ll remember you. Despite marketers’ focus on cost per click, cost per action and cost per acquisition, it’s awareness that will ultimately help reduce all those costs.
Zero in on your ideal customer.
All leads are not created equal. You only want those leads that are going to convert to sales. Make sure every dollar of your ad spend is aimed in precisely the right direction.
Curious Jane is a big believer in the power of persona marketing. By understanding your ideal consumer well, you can ensure that all your advertising efforts (and expenditures) are strategically pointed at them.
Make the most of every lead you get.
Too often, once leads get captured, they’ll receive nothing but a quick, generic series of emails. Sometimes, those hard-won leads get abandoned altogether.
But every lead is an opportunity to forge a relationship by using informed, targeted lead nurturing. Customer lifecycle marketing is a journey, and lead capture is only the first step.