What is the cost of a lead on Google?

Let's take a look on the true cost of leads on Google and how the rising cost of clicks will make it hard for any business to make a profit.

If you are a business, there is a good chance you advertise on Google. If you are a consumer there is definitely a good chance you clicked on an ad on Google.

This is how the world works in the multi-billion dollar online ad industry. Click, Click, Click. Ka-ching.

We all know how it works, but very few people understand the economics. So let’s break it down, and see what we find out.

The average Cost Per Click for ads on Google is $2.69.

The average conversion rate from an ad click is 3.75%.

So let’s do the math. How much does it cost the average business to get a lead.

$2.69 / 3.75% = $71.70.

Remember, that’s just a lead. This doesn’t mean the consumer will buy your product. It just means they were willing to fill out a form to learn more about your product. So depending on your industry - you are paying somewhere between $50 and $133 per lead.

Who makes the money?

It doesn’t take long to realize who is making all the money. The centralized search engines, social media websites and other ad-based platforms are making the money. Whether you are able to convert a click into a customer is your problem, they get paid either way.

And guess what. The cost per click continues to rise. Partially because more and more businesses are bidding for top placement in search results which essentially means we are screwing over each other by raising the price while the “Googles” of the world laugh all the way to the bank.

Click vs. Opt-In

It comes down to what is a better lead? Someone searching the web and clicking an ad - or someone who has opted in to receive information about a specific product or service. Certainly both are showing intent, and to some degree are very similar in nature. However, the Opt-in lead is definitely beyond the “kicking tires” stage of their buying decision. They are looking for the advertiser/business to contact them so they can make a decision to buy.

DOOR is leveraging a reward system using DOOR Token to incentivize consumers to opt-in to products and services they are looking to purchase. This allows advertisers to market directly to the consumer without having to overpay for clicks.

The good news is both parties win. The consumer is paid for their data and time. The business skips the over-priced middleman and pays a more reasonable and competitive price for the lead.

If a lead costs $71.70 and it keeps getting more expensive - at some point the advertiser will have to find another way to generate business - in order to stay in business.