💸 B2B Paid Media: When paying $300 for a lead is better than paying $50
When you’re measuring paid performance, it’s easy to fall into the trap of obsessing over Cost Per Lead (CPL).
John Short (Founder at Compound Growth Marketing) manages over $50m in paid spend and sees it happen all the time. Teams get fixated on bringing CPL down to some arbitrary number (“We can’t pay more than $100 per lead!”), assuming it translates to better efficiency.
But if a $50 lead never converts, it’s not actually cheaper than a $300 lead that closes.
Instead of chasing a lower CPL, use John’s funnel-driven approach to determine your ideal cost per lead.
Step 1: Optimize for Revenue, Not Just Lead Volume
Instead of focusing on how to lower CPL, start by asking:
- Are we targeting the right people? If your paid strategy isn’t aligned with how your company sells, you’re throwing money away. Enterprise deals need an account-based approach. Lower-ticket SaaS might thrive on high-volume inbound. The strategy has to match the sales motion.
- Which channels drive conversions, not just clicks? A LinkedIn lead might cost more than a Google lead, but if LinkedIn leads convert at twice the rate, it’s a smarter investment. Instead of cutting costs at the top of the funnel, measure success based on what turns into pipeline.
- Is marketing and sales aligned on what a good lead looks like? If marketing optimizes for volume but sales only finds a fraction of leads viable, something is broken. Instead of debating CPL, build a shared definition of lead quality with sales.
Step 2: Give Ad Platforms Better Data
One of the easiest ways to improve lead quality is to feed down-funnel data back into ad platforms. Most companies stop at optimizing for form fills. But you can push actual sales data (SQLs, pipeline, closed-won deals) back into Google, LinkedIn, and Meta so their algorithms prioritize the right kind of leads.
Here’s why this works:
- Today’s ad platforms rely on machine learning. If you only tell them to generate more leads, they’ll find the easiest, cheapest ones.
- But if you give them conversion data from your CRM, they can adjust in real time to prioritize leads that are more likely to close.
This doesn’t require a huge tech lift. Most CRMs (HubSpot, Salesforce) can sync conversion data back into ad platforms. If that’s not an option, you can use a simple Google Sheet export to manually update campaign data on a regular basis.
Even small adjustments here can make a huge difference.
Step 3: Rethink How You Measure Success in 2025
The best marketing teams aren’t optimizing for the lowest CPL. They’re measuring cost per SQL, cost per opportunity, and ultimately, cost per customer.
If you shift your paid strategy to focus on lead quality over lead volume, you’ll not only drive better results—you’ll also make the case for a bigger budget. Because when marketing can show a direct impact on revenue, it’s a lot easier to get leadership buy-in.
So as you plan your paid spend this year, ask yourself: Are we optimizing for what’s easiest to measure, or for what actually drives business?
P.S. Last year we had a whole session with John on this topic and it was a hit.
Linking the recording for you here so you can check it out.